The overall market is weak so far this weak with little buying pressure. The past two days we closed higher on progressively lighter volume = bad sign!! We may be setting up an ABC down pattern. If the SPY tests the last swing high of $85.99 on volume less than 399 million were heading down to between $75-80. I may enter the SDS tomorrow.

Like I said yesterday the TLT (20 year bond) is due for a bounce up which meant the TBT (short TLT) should pullback. I sold my holdings for a nice +17% profit. I am looking to buy back when the TBT gets in the price range of  $41-42 and light volume less than 5.6 million shares.

Gold is strong but is pulling back to $82-85. I will continue to hold my mining stocks but did sell my DGP holding today. 

My caution radar is signalling that I should be getting nervous. The major indexes closed little higher but on lighter volume. I will watch the market and may go short buying the SDS, DXD and FAZ.

The TLT has fallen $10 in 6 straight days. I am short this buying the TBT entered at $38.99 and have a limit sell at $48. I’m currently up +17% in 6 days. This one has worked like a charm with the volume lighting I ready to sell. 

I am in DAG long agriculture. It retraced nicely back down to support at $9.00. I’m looking for this to climb up to $11 first then up to $14.

I have been following the crazy ride of the TLT ( iShares Barclays 20+ Year Treasury Bond) and it’s so way over bought. This article on Bloomberg also talked about  “Time to sell Treasuries“.  I thus entered into the TBT which is an inverse ETF of the TLT. As you can see from this chart of the TLT there is heavy down volume pressure on Jan 5. On Friday we just missed the high of the Jan 5 by $0.07 and closed to the downside. If we move down on more than 4 million shares and can break the $111 price we are fall further to $103 range.

I entered into the TBT on Thursday and have my stop just below the day low of $38.41. This should go to $42.96 first then…..up to $50 if the bond does breakdown.

I am still bullish on gold going higher into February as the US Dollar weakens. I am long AZK, ANR, DGP, AUY, GBG, GG.

Also bought on Friday for a quick play on TNA (Small Cap Bull 3X Shares) it is basically 3x leverage on the Russell 2000 which is use the IWM for the proxy. It was good to see another trader that I follow at Buying on the Dip also call this trade for TNA…….up up up we go to $40.

When rolling over a covered call into a front month Think or Swim has a very handy tool to do this in one transaction instead of the normal two.

Step 1. Find the call option that you sold that is about to expire. Do this at a minimum on the Wednesday before expiration on Friday.Right click on the option and select SELL then roll over this to select Calendar.

Step 2. Two orders will be created instantly. One to buy the current call before it expires (minimum 3 days before expiration) and the other to sell the next month call at the same strike price. You can adjust the limit price to be in the middle of the spread if needed. The beauty is this is just one transaction cost instead of two. Saving money and time. Love it.

What a crazy market we started tanking down after major down markets in Japan and Hong Kong but rallied higher around 10am ET. See the chart of the SPY

At the end of the day we closed higher on strong volume after testing the low bar high volume day of  November 20,  813 million versus 533 million shares.

Gold did even better testing the the high bar on November 21. I went long buying many gold stocks like TRE, GG, DGP, AUY, GFI

I’m still holding on DXO and bought UWM, TNA today.

We are not fully oversold but I stepped into the market and bought SSO (2x SPY) going long the SPY. We are at confluence area and volume dried up hitting the November 24 strong up day. I also like the DXO for a small trade as oil is oversold.

Good interview with Peter Schiff on the future of the world economy.

With all the recession news and the Fed pumping billions of dollars into the economy this can only lead to one thing – the devaluation of the US dollar. This will lead to commodity prices to rise so watch for gold, oil, and agriculture products like corn, wheat, sugar to all get more expensive. Basically as the US dollar falls these hard assets will rise. Eric Bolling wrote a good post today Commodity Opportunities Abound on The Street about this same reasoning.

So in 2009 I will be mostly trading these gold stocks and ETFs: GLD, DGP, AEM, HMY, RGLD, ABX, GOLD, AZK,

For oil related securities I like to trade DXO, USO, XLE

For commodities related securities I like to trade DBA, DBC