Break Out the New Silverware (SLV,C,FAZ)

Break Out the New Silverware (SLV,C,FAZ) There are those who go through life happy to be around people, cajoling and backslapping, but desperately uncomfortable in their own skin.  And then there are those who prefer solitude, but are quite content with who they are.  The former we often refer to as ‘extroverts’.  Some prefer to call them ‘politicians’.  The latter are labeled ‘introverts’.  But a better term might be ‘wise’.   Now, of course, there’s a broad spectrum of people that fall in between these two extremes, and our point in offering all this today is to get you thinking of roughly where you fall in that space.  Why?  Because it’s more than likely that if you’re from the latter, quieter camp, you’re going to fare better at the trading game than your more boisterous comrades.   And that’s because individuals who possess an inner calm, who know themselves better, as well as their abilities and limitations, who aren’t given to an exaggerated sense of self-worth, who don’t need the affirmations of others, who don’t need the latest model or biggest automobile to prove their worth, who get along just fine being an anonymous presence, and needn’t be laughing and…

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Long Legged Copper Trade (FCX,OSX,DIA,C,FAZ)

Long Legged Copper Trade (FCX,OSX,DIA,C,FAZ) We’re going to give you a number of things to think about today, most notably the prospect of rising interest rates and the effect they’ll have on commodities.  We’re going to mix in a discussion of inflation, too, as that up-and-coming star will likely play an outsized role in just how these two items (rates and commodities) interact. Before we get to it, however, we have to review two open trades, both of which require your attention.   We’ll start with our September 1st initiative, from a letter called Oil Services About to Spill, in which we urged you to purchase the OSX March 135 PUT for $9.80 and sell the DIA March 176 PUT for $6.20 for a total debit of $3.60.   The DIA PUTs finished far out-of-the-money, and as you can see from the chart below, OSX is nowhere near the 135 mark, despite selling off dramatically over the last seven weeks. Unfortunately for us, selling what remains of the option’s time value would only net us a few cents, so we have to look for a different means of recovering our initial debit of $3.60.   And this is how we’re…

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Short Sellers Disappeared? Time to Short! (FAZ,C)

We’ve mentioned this a number of times over the last few years, but it bears repeating.  As we move toward the final, bull market, blow-off top, we expect to see price behaviors unlike anything we’ve witnessed historically.   And it will test all our markers, fundamental and technical, and very likely sentiment readings, too, which we fully expect to fly off the charts.   Why?   Because the final stages of a multi-generational bull market are not a rational phenomenon.   By nature, secular bull and bear markets always end with excesses.  But we’re now entering the mother-daddy of all bull market finales.  You will not see another market event like this in your lifetime, and your children and grandchildren may also never know anything like it, either. Prices for financial assets – and very possibly tangibles, as well – will skyrocket in a fashion that confounds even the most carefree analysts.  Needless to say, conservative types, who rely on conventional numbers and traditional measures to signal entry and exit points, will get left behind, folding too early and closing out their best positions, even as those same securities soar stratospherically and deny them an additional 30%, 40% or 50%,…

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