A Summer of Volatility
Expect a summer of volatility. Keep an eye out for OPTION plays as well, these have been by far our biggest winners.Everyone remembers last year when we turned $19,000 in BAC PUT Options into $40,000 in about 3 hours for a gain of 110%, or our Citi Group PUTS that gained 130%, our HD PUTS that we saw an 80% return in 2 days, and who could forget our MS PUTS that gained 230% in less than a week.
Of course last month when we announced we were making a small $5,000 bet on SLV PUTS, many thought we were crazy to bet against silver when it was still trading above $30 an ounce, but for those that joined us, we saw an easy 270% gain in 8 trading days!
It is important to be patient in volatile markets and NEVER feel like you have to do something! If you feel like you just have to be short or long, then that is usually when you lose money.
The second most important thing is to lock in profits for your trades and buy the dips on the ones you love for the long term.
Why the volatility?
Two forces will be colliding for the next few years.
- The Federal Reserve (FED) and other central planners will be attempting to keep the illusion of a recovery going.
- The real situation in the economy is ugly and the recovery stats are nothing more than propaganda.
This morning the FED said that they are ready to act, but just not yet. Basically they would like to see oil fall a little further before printing more currency or better yet, wait until Greece explodes so it looks as if new money printing is just a response to someone else’s crisis, and not the real one we have right here in the U.S.
As pointed out by ZeroHedge.com yesterday, the U.S. labor market is in a full-blown depression if you look at the real numbers.
- The share of long-unemployment is at its highest level since the Great Depression (42%).
- Fully 54% of college degree graduates under the age of 25 are either unemployed or underemployed.
- 25 million Americans are on food stamps -one in seven residents.
- 47% of Americans are on some form of government assistance. The employment-to-population ratio for 25-54 year olds is now 75.7%, lower than it was when the recession supposedly ended in June 2009.
- The number of people not in the labor force has swelled 8 million since the recession ended.
- The ranks of the unemployed who have been looking fruitlessly for work for at least 27 weeks jumped 310k in May, the sharpest increase since May 2011.
- The unemployment rate for males aged 16-19 is 27% and for males between 20 and 24 it is 13%. Draw your own conclusions from a social (in) stability standpoint.
- One in seven Americans is either unemployed or underemployed
- A mere 16% of the 2009-2011 graduating class has found full-time work, while 22% are working part-time. Even those hired from 2006-08, just 23% are working full-time.
Combine all this with massive money printing and borrowing from our government and you have one hell of a manipulated market that will have wild swings, especially this summer.
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