selling FXP +32%, BZQ +45% & buying TBT

A quick update on past entries diarzied here.

FXP is now 32% higher than our 2nd entry in late May. It'll at most go up another couple dollars, we believe, before a material correction, so we're selling that 2nd portion while keeping the original position which is at roughly break-even from our entry in December 2009.

BZQ is up 45% from our entry in late May. It'll probably go much higher in time but for now we'll step aside and book these gains.

We'll go long TBT, an ETF which is double-inverse to the 20-year U.S. Treasury Bond. It closed today at $26.62 and we'd not be surprised to see it as low as $20 but if it gets there we'll possibly buy more. For now we'll just hold this position awhile and if we're blessed with a quick price appreciation we'd book it and update the blog.

Those who shorted Apple on our suggestion were stopped out for a loss of just under 6% and those who hedged it with a market long as we suggested in the link below came out well ahead on the pair trade as BGU was up 22% when the Apple short was stopped.

No other changes, and certainly no surprises with respect to the recent market action per this commentary published just days after the apparent market high for the year : http://ridingthegravytrain.blogspot.com/2011/05/goldman-sachs-share-price-signals.html

A follow-up can be read here : http://ridingthegravytrain.blogspot.com/2011/06/update-fxp-bzq-qid-faz-aapl-hao.html Indeed a market rally began immediately after we predicted it, which turned out to be one of the biggest weekly gains in many years.

Early in the last week of July, subscribers to our paid advisory were given a short-term sell signal which remains in effect today. By the beginning of this month even our conservative readers were signalled to be short or hedging longs, and anyone reading this knows what a lucky call that seems to have been. We refer to these as "signals" because we use a proprietary indicator that does a reliable job of catching market turns in different time frames. Speculators follow the short-term signals, while investors consider the longer-term signals.

At this stage our thinking is that gold and especially silver are marking tops of some duration, as are bonds, while equities are still overvalued but due for a big bounce. We remain very bullish the U.S. dollar, though we'll change our minds on material weakness and if so we'd sell out of our May 5th entry into UUP.



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