Winning Stocks

It is hard to tell these days whether the stock market will go up or down.  One thing that has remained certain over the past year is that volatility has been low.  This plays right into the hands of XIV, the inverse volatility index.  It has gone from around $34 per share to $89.61 during the past year, a gain of 161 percent! 

I'll have to admit that I missed XIV this past year.  However, I did make a lot of money by investing and trading in bitcoin through GBTC.  It actually gained over 200 percent to beat XIV.  Unfortunately, bitcoin will be busted for a while because governments like China and Japan are cracking down on bitcoin.  So, I am out of the bitcoin trade for now, but I will be loading up on XIV for this next year because I am betting on another year of low volatility in the stock market.

Another winner for this past year was PNQI, the internet stocks ETF.  It gained over 29% during the past year.  I held a small position in PNQI during this time, but I am going to buy more of the internet stocks ETF for this next year because I believe that PNQI can be worthwhile along with XIV for two of the best stocks to hold in an uncertain market.

Northern Dynasty Minerals (NAK)

I have owned Northern Dynasty for years in spite of its ups and downs.  It will be one of the biggest mines in the world if it is completed, and it has experienced a tremendously unfair amount of bad news from environmental groups.  The biggest argument is that it will pollute Bristol Bay which is 100 miles away.  Such arguments are pure nonsense.

Here is a great article on Seeking Alpha about the pros and cons of owning NAK.  The bears will eventually be overcome, and bulls for Northern Dynasty will be greatly rewarded.  The majority of the people in Alaska will probably see the great financial benefit of the mine in the next few years, and they will shut up the environmentalists.  Also, Trump and the Republicans are in complete control of the government now, and they are much more reasonable on environmental issues.

Natural Gas 2017

The wide swings for natural gas stocks appears to be over for now because a lot of long and short traders have exited the natural gas trade.  You can read this article at Seeking Alpha to see why natural gas is not attractive this summer.

The price of natural gas is basically uncertain because we have plenty of supply and demand, and the two are balancing out now.  I own a lot of UGAZ because I thought there would be a summer spike due to utilities using natural gas for cooling.  We are also exporting more natural gas.  Currently, I will probably have to wait until the fall season before I will make any noticeable profit.

Buy Raytheon RTN

I am buying Raytheon (RTN) on Monday morning.  This is the company which makes the Tomahawk missiles that were fired at Syria this past week.  According to one article that I read, the 59 missiles cost more than 1.5 million each, and the Department of Defense paid 93 million dollars for the missiles that were used.  There is probably a 100% possibility that the missiles will be replaced sending up the earnings of Raytheon.

Moreover, RTN has steadily risen in price over the past year from $124 to $152.  That is a gain of 22%.  How many other companies do you know gained 22% in the past year?  Trump has also signaled that cruise missiles might be used again in Syria, and we have the problem of North Korea as well.  This is one of the few predictable stocks that I see in the stock market today.  Finally, if you buy on Monday, you will get in before the ex-dividend day of April 10.  And the dividend will most likely pay for your commission cost if you buy 10 shares or more.

Bull or Bear

Around ten days ago, I blogged that stocks were going into a pullback although I did not know the extent of it.  That may still be true, but I want to clarify that we are in a long-term bullish trend.  If a large pullback occurs, it should become a buying opportunity for quality stocks and ETFs.

Chris Ciovacco has written an excellent article here about this bullish situation.  He presented excellent charts to show that 2017 is nowhere near the bearish trend of 2008.  He used 100, 200, and 300 day lines to reveal whether we are in a long term bull or bear market.  By paying attention to information like this, we will not get whip-sawed by stock market volatility.

Bonds Are Not Dead

Eric Parnell has written an outstanding article about why the bond bull market will likely continue.  You can read the article here http://seekingalpha.com/article/4057730-bullish-bond-outlook?li_source=LI&li_medium=liftigniter-widget.  I agree with Eric 100%.  He presented information about how the bond selloff last year has ended.  People and countries are buying bonds again because they don't trust the stock market.

Eric also showed charts where the bond yields are stuck in a downward channel.  I am planning to buy more TMF (the 3x long term bond ETF) on Monday because I believe I will be able to make a profit in long term bonds over the next several weeks as stocks gradually fall.  Then, I will sell most of my TMF when the market correction is finished.

 

Stocks Are Going Down

Eric Parnell has written an excellent article about why stocks are in a correction process right now.  You can read the article here.  He provides outstanding charts to back up this idea along with some possible buy-in points when the market decline is over.

I got on board with this idea during the past week when the Dow suddenly fell over 200 points in a single day.  The love affair with Trump is over for a while.  I immediately bought a position in SQQQ (the 3x short Nasdaq ETF) the day after the market fell.  The stock market decline may indeed be gradual like it has been subtly so in March except for the one big down day.  So, I am looking for a 7-10% pullback over the next several weeks.  Then, I will sell SQQQ for a profit, and I will buy either TQQQ or UDOW for the ride back up.

The Trump Era In Stocks

Now that President Trump has been in office for a while, we can make some plans for investing or trading stocks during his term.  First, the major indexes are up double digits since Trump's election.  This means that the stock market will probably do well if he continues doing okay.  However, we may soon have a market correction since it is overbought now.  I will probably buy more UDOW whenever the market pulls back, and then I will sell part of my UDOW holdings when the market goes back up.  So, I might be able to make money a few times a year during volatility.

Another good idea is to trade natural gas on a seasonal basis.  I made double digit returns on some DGAZ trades in the last two months when the short natural gas ETF was profitable during the warm winter.  Now, I have three bullish natural gas trades going on through UGAZ.  I am planning to hold UGAZ until sometime in July.  More natural gas will be used during the summer when utilities burn it for summer cooling.  The summer is also a time when natural gas is added to storage for the next winter cycle.