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Dallas Salazar
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Former FA with AIG and Merrill Lynch to wealthy clients and institutions. I have 5 years experience in the financial industry and now trade my personal account. I am interested in using volatile small caps, leveraged ETF's, and the occasional option trade to add outsized returns to my portfolio.... More
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  • GEVO: Large Insider Buying As Expected

    As the dust is beginning to settle on the recent GEVO offering it appears that the company insiders and the major players behind the scenes, Khosla Ventures, Virgin Green Fund, and the Malaysian Life Sciences Capital Fund, all had a hand in the placement of the shares and saw value in what should be GEVO's last equity offering. Khosla Ventures buying was by far the largest and those purchases can be found on GEVO's website under SEC Filings. Khosla's purchases put Virgin Green Fund in a situation where they may soon be forced to make tough decisions. They have since the beginning wanted to remain major owners of GEVO and influential partners but are seeing their ownership slowly shrink to the buying of Khosla. This could force their hand into purchasing more shares, especially if they plan to take GEVO the same route that they took DuraTherm, and this is complete speculation, which is detailed in my article "7 Things You Don't Know About GEVO And Why You'll Miss It Becoming A Household Name".

    What I do know is this insider buying can only be viewed as positive as this is the first substantial buying we have seen, including when the plant was initially shut down because of infections and had fallen to then all-time lows. I know that in early 2012 Pavel Malchanov of Raymond James had asked Pat Gruber on a conference call if the insiders planned to purchase shares at the all-time low and Gruber responded with a one word answer, "no". This appears to be a complete change in thinking and in practice. I'm hoping that this will serve to help investors with GEVO's well established confidence problem and signal that they are comfortable having a "skin in the game".

    The below chart lists tonight's disclosed buys:

    CORRECTION: PATRICK GRUBER AND BRETT LUND SOLD THE AMOUNT OF SHARES I HAVE LISTED AS BOUGHT. 12/19/2013

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    I would like to thank Jamison Gaddy for his assistance in research over the last several weeks and for his assistance in building the above chart. He can be followed on twitter at @Jamison_Gaddy.

    Disclosure: I am long GEVO.

    Tags: GEVO
    Dec 18 9:35 PM | Link | 3 Comments
  • Key Market-Moving Events For The Week Of June 24-28

    I would like to borrow a quote from the great civil libertarian Clarence Darrow to describe my thoughts on this weeks market action,"I've never killed a man, but I've read many an obituary with a great deal of satisfaction." Since I starting writing this weekly calendar publication I have talked about how the market was grossly overvalued and how the markets sentiment continued to move the index's higher in the face of worse and worse data. I have talked about how the entire rally was a fragile, policy driven move that was completely dependent on the greater fool theory, simply put, hoping that somebody next in line would chase the market higher. It appears that we received confirmation of that theory this week as Ben Bernanke and his talks of tapering Quantitative Easing forced the S&P 500 and the Dow Jones Industrial Average to have their second worst weeks of the year. Let me clarify that a bit. Both indexes had their second worst weeks of the year in essentially one and a half days after being blatantly pumped on Monday, Tuesday, and Wednesday by those who believed that Bernanke would come out dovish and assure the markets that tapering was nowhere in the immediate future. Unfortunately for those hoping for one last trip to the punchbowl, the refreshments finally ran dry. The selloff was on.

    That's not all that happened once the liquid(ity) courage was threatened. It was an absolute bloodbath for metals, treasuries, oil, and volatility continued its historic rise. Between the end of Bernanke's press conference and the close the following day, Silver lost 9%, Gold lost 6.25% after already being taken to the woodshed by those front running or possibly hedging a QE taper move, the 10 year treasury lost 14% in premiums causing a 30 basis point yield spike to 2.50%, volatility spiked even higher measuring its May 2013 to June 2013 move to 74% (the 5th largest 60 day spike since the Lehman Brothers collapse), and Oil lost 2.2%. The 10 year treasury yield is up over 50% (87 basis points) since the beginning of May and finished its largest weekly yield rally since March 2003. Yields rise when prices fall. This matters. Anybody holding any interest rate sensitive, fixed income, debt derivative with any kind of duration got smoked this week. The losses suffered by companies especially sensitive to interest rates (I'm sure they have some hedging in place but none could have predicted these kind of volatile moves) will be substantial. Which brings me to my final point I'd like to make about the week that was, it would make sense that there is AT LEAST one financial institution, who was either not properly hedged or sold too much insurance on risk, that is not prepared to handle these levels of volatility across the asset classes. This means we could in the next few weeks be seeing a headline about some company's toxic balance sheet. This is completely speculative of course but logical. You can choose to factor that into any risk modeling you do or not. With that said, lets move to the week ahead.

    Monday is data light with the only market moving data coming out of Germany in the form of three business sentiment surveys. I'm expecting the data to be better than forecasted but just barely and as with anything sentiment based, try not to roll your eyes. You will notice the other event I have scheduled Monday is the Fed's Fisher speaking in London. Something VERY important to note for this week is that there are several Fed member speeches scheduled and while most are from non voting members, many of them are hawkish on QE and with the markets being very sensitive to anything taper related, this could move the markets. Pay very close attention to the markets reactions shortly after Fisher gives his thoughts because it may give clues as to whether the market is listening to the non voters.

    Tuesday and Wednesday are data dense. I am negative across the board on all US data and positive on the Japanese business and German consumer confidence. I do not believe the data is getting better in the US and although we had a semi sloppy week last week from a calendar standpoint (one of my worst to date), I still don't think the numbers will be improved. Make sure to watch the reaction to the noted Fed members speaking engagements.

    Thursday is this weeks marquee day. It's a really mixed bag of global data, of which I am bullish on some and flat on some. Mostly I'm bullish on China, Japan, Germany and the UK while I think that the US data will come in very close to forecasts. If I'm right on Tuesday and Wednesdays US data any miss on Thursday could quickly start a selling off of risky assets. Three Fed members are scheduled to speak Thursday.

    Friday is a very light day and that might be exactly what the market needs at that point. I'm bullish on both data points but the one to watch will be the University of Michigan Confidence print.

    I come into this week still holding the same position as last week but I am going to be very conservative with the position as the market moved in my favor a great deal in a very short amount of time and is probably looking at a technically driven, short term bounce Monday before the big data day on Tuesday. I will hold my position regardless of any front running of possible positive data prints on Tuesday but will close my position at the first sign of trouble on Tuesday if I am wrong on the data. I do not want to give back my substantial gains.

    I continue to have no position in the SPY but remain levered NET SHORT the SPY's beta by way of being levered short a basket of Natural Gas E&P companies. The basket that I am currently short tends to do between 3-400% what the SPY does on a daily basis, give or take any wild swings in the underlying commodity of natural gas. With the SPY making a huge downward move last week and Natural Gas flat on the week I was able to end the week +18%, including a +14% day on Thursday. My main goal at this point is gain preservation as mentioned above. I am betting on SPY beta to be NET NEGATIVE this week but will not take unnecessary risk with my gains.

    Good luck to everybody. See you next week.

    The following tables will outline any medium to high importance events, their currency, a previous number, and my take as to whether the number will beat expectations (+), meet expectations (=), or miss expectations (-). Doing due diligence on these events and taking a position based on the opinion derived from that research is a way for traders to play the markets using beta movements from these events. My calendar is in no way entirely inclusive of all data events globally, simply the events I will be watching that I feel will impact my trading strategy of being either beta neutral or beta levered. The events in the tables are events that, in my opinion, will have a significant impact on the S&P 500 Index, which can be most closely be followed by watching the SPDR S&P 500 ETF Trust (SPY), the Dow Jones Industrial Index, which can most closely be followed by watching the SPDR Dow Jones Industrial Average ETF (DIA), and the US Dollar, which can most closely be followed by watching the PowerShares DB US Dollar Index Bullish Fund (UUP).

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    Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in SPY, DIA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Jun 24 2:02 PM | Link | Comment!
  • Key Market Moving Events For The Week Of May 20-24

    The following tables will outline any medium to high importance events, their currency, a forecasted number, a previous reading number, and my take as to whether the number will beat expectations (+), meet expectations (=), or miss expectations (-). Doing due diligence on these events and taking a position based on the opinion derived from that research is a way for traders to play the markets using beta movements from these events. My calendar is in no way entirely inclusive of all data events globally, simply the events I will be watching that I feel will impact my trading strategy of being either beta neutral or beta levered. The events in the tables are events that, in my opinion, will have a significant impact on the S&P 500 Index, which can be most closely be followed by watching the SPDR S&P 500 ETF Trust (SPY), and the Dow Jones Industrial Index, which can most closely be followed by watching the SPDR Dow Jones Industrial Average ETF (DIA).

    It looks like we did a good job, for the most part, with last weeks predictions of data prints as we correctly called the poor Euro GDP's and the at expectation Chinese (made up) data (Key Market Moving Events For The Week Of May 13-18). We also correctly called the much better than expected Japanese data across the board as their efforts to stimulate seem to be off to an incredible start. Where we missed was on the US data. We were expecting better housing starts and better jobs numbers, both failed to meet expectations and caused the markets to actually post a negative close for the day on Thursday.

    Overall I was happy with the week from a standpoint of calling the prints and I was happy that my missed calls were to the downside and that I didn't price in any data points that surprised to the upside. I was not happy with the market action. If you check out last weeks article, I pointed out that it would be interesting to see how the market reacted to any misses (expected) in the EUR GDP's and anything else (US jobs, housing). It appears the market didn't seem to mind much outside of the temporary negative close on Thursday. Friday's buying frenzy showed that sentiment still remains extremely bullish in the face of the poor data. I went net short on Wednesday at the close and am currently underwater on my positions.

    I am expecting more of the same this week from the data as I held my short into the close Friday and will continue to hold as the week progresses. I am expecting all Japanese data to exceed expectations and all Chinese data to meet or exceed. I am expecting bad PMI numbers out of Europe, a continued miss in the jobs data for the US, and continued declines in the new home sales for the US. That being said, following our theme from last week, this week will greatly depend on sentiment and comments we receive from a few of the worlds most important central bankers. Investors will have to decide if the data outweighs the actions from the central banks and the dollars continued rise against other currencies, which can be followed by tracking the PowerShares DB US Dollar Index Bullish Fund (NYSEARCA:UUP). I stand behind my opinion that the higher the dollar goes the better consumption and spending will remain as the increase in the dollar acts as a "tax cut" of sorts by putting downward pressure on commodities. The bad prints in Europe and the downward pressure Japan is putting on their currency should help take the dollar higher this week.

    In conclusion, I go into this week expecting the data to finally matter. Two weeks of poor data should show the markets that this is more than a temporary blip and that the market has come too far too fast. I'll hold my shorts on but will close the positions if we reach Friday net positive from today's close. The risk in the markets is to the downside but the pain trade is most certainly to the upside. Good luck to all.

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    Disclosure: I am short SPY, DIA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    May 20 8:23 AM | Link | Comment!
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