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New member Russell Gold is an investment research analyst. Russell Gold fields of interest include technical analysis, macroeconomics, demographics, financial history and energy policy. His published topics include; stock options, dividend investing, technology, services, finance and search... More
  • Fiscal Cliff Has Bernanke TKO'd 3 comments

    Under current law, on Jan. 1, 2013, there's going to be a massive fiscal cliff of large spending cuts and tax increases," Bernanke told the House.

    The trifecta of disaster; debt limit, sequestration on spending, tax cuts -- if not corrected will surely pin our economy. Bernanke is likely waiting to see commitment or no commitment from Congress before deciding on QE3.

    Congressional Calendar

    With little time after the November 6 election, I wouldn't bet on Congress getting anything passed before January, 1st 2013 Fiscal Cliff deadline. Without Congress Bernanke must fight alone.

    (click to enlarge) November-December Congressional Calendar

    Upcoming Federal Open Market Committee FOMC Meetings

    July 31-August 1 (Tuesday-Wednesday)

    September 12-13 (Wednesday-Thursday)*

    October 23-24 (Tuesday-Wednesday)

    December 11-12 (Tuesday-Wednesday)*

    * Meeting associated with a Summary of Economic Projections and a press conference by the Federal Reserve Chairman Ben Bernanke.

    Bernanke schedule should be taped to your fridge. FOMC meetings have always been very important for market timers. Most market moves take place shortly before or after FOMC meetings. Bernanke will likely use one of these meetings to announce QE3. Markets will gather more volatility as each date is passed by with no formal QE3 announcement.


    Bernanke TKO'd

    Your best bet is to sit tight. Wait and see if the FOMC September 12-13 meeting passes with no QE.

    No QE3 in September, and a dangerous approaching Fiscal Cliff makes for a great opportunity to make money.

    Ultra Volatility

    Investors have many options to explore before markets quickly head south.

    Two of my favorite bearish quick picks are iPath S&P 500 VIX, VXX, and ProShares Ultra Short S&P 500, SDS.

    (click to enlarge) iPath S&P 500 VIX VXX

    (click to enlarge) ProShares Ultra Short S&P 500 SDS

    Insurance (Hedge)

    Bear ETF's can counter a negative market move. Consider insurance versus your three year profitable long, Apple AAPL, Google, GOOG, Sirius SIRI, or Amazon AMZN, positions.

    Financials have a reputation of falling fast with out Fed easing, Direxion Financial Bear 3X Shares, FAZ is a safe hedge against your long positions. FAZ is hovering close to a 52 week low.

    (click to enlarge) Direxion Financial Bear 3X Shares FAZ

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in FXE, FXF over the next 72 hours.

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Comments (3)
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  • Russell Gold
    , contributor
    Comments (244) | Send Message
    Author’s reply » Looks like no new information coming out of this recent FOMC meeting.
    31 Jul 2012, 09:50 AM Reply Like
  • reevenadin
    , contributor
    Comments (132) | Send Message
    If the FED doesn't initiate QE3 which i don't believe they will and also the German's reject the ESM, you could also short GLD,SLV and go long TLT as the dollar will surely strengthen. And as the fiscal cliff looms, judging by the 4 year presidential cycle (the first year is always the worst) i don't believe they will kick the can and if they do, they won't kick it far before we are go into a big recession next year when we go over the cliff. The dollar is only going one way in the medium to long term and any rally against in the short term i am selling into.
    8 Aug 2012, 08:16 AM Reply Like
  • Russell Gold
    , contributor
    Comments (244) | Send Message
    Author’s reply » "If the FED doesn't initiate QE3 which i don't believe they will and also the German's reject the ESM, you could also short GLD,SLV and go long TLT"
    I agree and that is exactly what I'm going to do. Except go long put on all of those you mentioned except TLT and US Dollar


    Apple Stock Dividend, Last Call​article/​787261-apple...
    8 Aug 2012, 08:25 AM Reply Like
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