Update 5:30PM EST

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August 19, 2009 01:34 PM


My model portfolio has been updated.



My trip this past Monday to Atlantic City appeared to have been a most profitable one. I made 12 points, numerous numbers and ended up holding the dice for almost 45 minutes. I also learned at day’s end that my DTO position was sharply up. I had picked a sell/stop early that morning knowing I wouldn’t be looking at a screen throughout the day. Had I been, I likely would’ve sold out my position.

That trip ended up costing me far more than I won on the crap table as I was stopped out of my DTO position today. More in my oil comment.

U.S. Stock Market – Choppy trading through at least Labor Day is expected. While the market has clearly priced in whatever economic rebound we’ve had (if that’s what you can call it), we’re not going straight back down either. Because most retail and low to mid-level so-called professionals use “emotion” as their number one tool, these markets are going to be quite volatile. I find many here are spending far too much time on every single blip up or down and trying to analyze it every which way.

China’s market has broken some key uptrend lines and while a rally back to them is likely, this market bares careful watching. China is not only the engine but the caboose too for the world economy.

U.S. Bonds – Betting against the 10yr. and 30yr. Treasuries has entered a buying zone again (please see model portfolio). I continue to monitor some potential vehicles that bet on the short side of U.S. corporate bonds. Stay tuned.

Gold & Silver – Both have retreated back towards strong support zones. With a few more weeks left to gold’s seasonally weak period, I think any buying of these metals should be limited to periods of further weakness. We’ll take a more in-depth look after we get pass Labor Day.

Base Metals – Hard asset bugs won’t like what I’m about to say but I don’t get all hot and bothered when I read that Chinese farmers are stockpiling copper. It would be far better that China was accumulating copper for future industrial usages. History has shown that when any public-at-large gets heavily into any commodity, it’s closer to the top, not the bottom, of that commodity’s price. Technically, copper has big time resistance around $3 so any rally back towards that price appears to be an opportunity to take profits until further notice. This doesn’t mean sell all your copper stocks. It just means no new buying is wise for most accounts.

U.S. Dollar – Poor Uncle Sam.* Even when he’s thrown a bone (technical buy on deeply oversold condition) he can only manage a feeble rally so far. Now we know what walking dead really looks like.

Oil – Today’s inventory drawdown had some special quirks and IMHO is not the start of a mark increase in demand. People who live and breathe oil all say the same thing – there’s ample supply and then some. The weak dollar and visions of grandeur that are presently running through the equities markets is what’s keeping oil prices together.

I’m not going to put any oil ETF in the model portfolio going forward as far too many people have been getting engross in just one little play. I received constant emails and calls asking what’s my latest assessment of the “hour” on oil. This told me far too many people are speculating/gambling who shouldn’t be. And quite frankly, even close friends were hitting me up regularly and there’s more to life than an oil trade-LOL.

Personally, I believe actual fundamentals win out over time so if we have another $2-3 follow through to the upside, I’m likely to go short again. But that’s me – NOT YOU!

Natural Gas – I’m starting to believe we may be presented with an opportunity to go long. I think getting below $3 could be the ticket so stay tuned.

Special Note – AGORACOM tells me we now have tens of thousands of readers. I’ve accepted that not all of them are going to apply for membership in the Peter Grandich fan club and will in fact, make comments that may be unbecoming to some. But as I stated in the past, there’s no need to defend me. I truly believe by doing so you engage these folks and give them a feeling their motive(s) are achieving their goals.

Please don’t confuse these folks with people who give constructive criticism and/or take an opposing view. That’s part of a blog. What you do need to realize is those with other motives could easily just not come here if they wanted. When you see such people continuing to post despite the fact there’s nothing forcing them to be here and could simply just move on, then you have likely found those who have motives other then differences of opinions.

Again, when you engage them you actually give them a sense of credibility they otherwise would not receive. You must remember we’ve tens of thousands of readers now and 99.9% are clearly not of these folks same opinions or else you would hear so. Trust me when I say they show their support privately and that’s absolutely good enough for me!

Finally, to those who write I should go after these people in some fashion, you need to watch this video. It’s just more great advice from the only true authority in the world.





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