Market Outlook/Potential Opportunities:

Gold is stuck in a pennant formation, torn between two arguments as to which way it will turn. It might be a trap but it appears that the direction will be down. So we bought DZZ. This is an Exchange Traded Ultra short Note on Gold. We did not get the best of fills. We are putting in a stop in case we are wrong.

The stock market is overbought but projections are still for an SP of 1060 maybe even 1160. This is the acceleration phase that could look like a buying panic. Unfortunately we only have one long in Aerospace It is very tough to chase this market, but I can't justify a short at this time. We might do some selling if the market stretches up. China showed some poor relative strength on this last up move. Once the market falters, this could be the first to stumble but longer term the Asian market is bullish

The divergence between oil and natural gas continued this week. We finally threw in the towel on GAZ. We thought Oil might turn down also, so we bought an Ultra-Short DTO. This market turned on a dime so let's keep a tight stop in place.
Once again I will send out some more recommendations during the week if situations warrant it.

Current Long Portfolio:

Buy DTO (Ultra Short Note on Oil) @ 80 It closed at 72.8
Sell stop at 69
Buy DZZ (Ultra Short Note on Gold) @ 21.2 It closed at 20.2
Sell stop at 18

Long ITA ( Aerospace ) @ 41 It closed at 44.4
Sell stop at 42
Long NLR ( Nuclear Energy ) @ 23.4 It closed at 23.7
Sell stop at 21

Current Short Portfolio:

Short RJA ( Agriculture ) @ 7.1 It closed at 7.0
Buy Stop @ 7.5

Recently Closed Positions

Long GAZ Natural Gas @ 45 Sold at 14

Long USO ( Oil ) @ 32 Sold at 37.9

Long GLD ( Gold ) @ 88 Sold at 93

Long GLD ( Gold ) @ 90.1 Sold at 93

By Bill West

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