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  • Running On Empty [View article]
    It is my understanding the Bond market is where the "smart " money resides. This market is larger than the stock indexes, so that being said one would assume there are more "smart" money folks than there are "dummies"

    During the recent run-up of stocks within the indexes over the past 12 months, I noticed the TLT also tagged along directionally. This is not the usual pattern, as the Bonds usually trade inversely with the stock equities.

    I can only conclude the differential between the "smart" investors and the "dumbos" is now less apparent, and I am less smart than I thought, as I now must find a new correlation.
    Oct 19, 2015. 06:08 PM | Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]

    This next week will be less volatile. The expected move in the S&P is a muted $26.97 +/-. That is not to say the market will stay within that range all week, but that number is the expected close on Friday from the open on Monday. The Implied Volatility is also depressed for next week. This is all computed from the CBOE options market.

    I agree with you sentiment in Crude Oil.... not much out there to spike it up. I will be shorting any bounce up from the cat !!!!
    Oct 19, 2015. 01:51 AM | Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]

    Gold is trading off (-11.20) at 1171.9. in early trading. Crude Oil is basically flat. It appears the NY open will be in moderately negative territory. S&P futures now down 5.50 to 2020.25.
    Oct 19, 2015. 12:15 AM | Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    I believe your capital can be much better deployed, copacetic.....

    Although my conviction is Carl Icahn will be very beneficial to FCX, the issues facing this company are quite significant, and much time will pass until it again will enjoy the success it experienced during the commodity boom of five years ago. Your calls are very long dated, and I prefer to structure these type of trades with Theta positive strikes. Properly structured, the results can be awesome, and there is no reason why you have to hold them to expiration. They should turn a profit daily.

    I spent two years with Avi in his trading room, and my trading results were primarily derived from the association of other traders that were focussed on options. I found the timing of option trading was enhanced with inclusion of Elliott Wave and Fibonacci theory, particularly the longer dated option strategies, so I definitely agree with you that Elliott Wave alone is not enough, and I like to include fundamentals, news, price patterns and so much more while trading. Avi, I found is a "purist" when considering his thoughts regarding Elliott Wave and is one of the best, however we all have our reasons for trading various styles., and inclusion is my preference.

    Ben has a style that is close to the one I follow, and I am so thrilled he has created a trading community, and is willing to share his vast knowledge. I personally have been trading options for over a decade, and I have been very pleased with the results, but to combine my trading experience with the knowledge of Ben and the other experienced traders in the "Wolf Den" I believe my results will be exponentially improved while mitigating so much of the risk associated with options. Gold and Silver will be close to a bottom soon, and my plan is to coordinate an options trading strategy with Ben and the others that will take advantage of the moves we will soon see in the metals as the recovery materializes. All of these trades along with the strategies will be shared with the members in the newly created "Portfolio" section.

    Most of us in the "Wolf Den" are "predators for profits" and taking losses are not acceptable, so if you are also with this mind set, come and join the party. If you decide to join, let me know and I will share my option strategies and some of my methodology for structuring trades that have worked well for me in the past.
    Oct 19, 2015. 12:00 AM | Likes Like |Link to Comment
  • The 'Something For Nothing' Society [View article]

    Your comments resonate with my feelings for a need of common sense. Bernie and Donald are unique.... they do not care if you like their positions, but they posses the character to express their feelings in terms of their core beliefs. This I respect.

    On the other hand Hillary will say anything (even lie) to get approvals for the moment. She has changed her positions often to fit the perceived approvals of those in her immediate circle. She will even imitate a phony accent to please those that might be listening. Sincerity is absent.

    I would be devastated to see a candidate that has a complete lack of veracity, such as Hillary, win. I would rather accept a candidate that has character, even though I may not agree with the positions taken.
    Oct 18, 2015. 08:06 PM | 4 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    Hi copacetic...

    I was just checking the premises to make sure that I had not left any open issues, and ran across your comment.... My plan is to join Ben on his site (Lone Wolf Trader) and do some serious trading as I see some great opportunity emerging in the metals that have not existed for years. As the saying goes "if you want to battle the lions, then you need to first enter the arena".... so that is my destination.

    Be careful, copacetic, with the Copper producers. FCX has been cutting costs and limiting their expansion until they can get their balance sheet in a much better situation (good management plan). Carl Icahn is a master at this strategy ( I have been in at least ten of his deals in the past), and he is very good at extracting value for the stockholders, however he is a long term "turnaround artist", and patience is needed to make it work out.

    I believe Copper will experience a severe "nose dive" in the near term, and those invested in FCX will be somewhat disappointed, but when Gold makes its recovery FCX will get a reprieve. Copper is a long wait, I believe, and the economies of the world will have to show a recovery before it has any investment quality for me.

    Earnings for FCX are on Thursday Oct. 22 before market.... Your Jan 17 calls@ $13 are trading at $3.00 ask and have 460 days to expiration. The market maker expected move is +/- 9.216 between now and expiration. You are looking at the risk of the calls dropping in price because of theta decay, as well as the IV drop from the current 67.85%.... additionally the risk of the underlying stock price contracting further.

    If this was my trade, I would close it out just prior to the earnings report on the 22nd, or alternatively convert the naked long calls to a vertical spread by selling calls for protection and positive Theta. Once the stock stabilizes and the miners recover from a commodity revival, then you can close out the short calls for a profit, and let the long calls appreciate with the underlying stock price appreciation.

    These are my thoughts (for what they are worth), but regardless of your decision, I hope your FCX trades work well for you !
    Oct 18, 2015. 07:45 PM | Likes Like |Link to Comment
  • The 'Something For Nothing' Society [View article]

    This article is written and approved by the editors of SA, and it's title was "The something for nothing Society". My first thought was the name "Clinton". was that not their "mantra"?

    Their recent escapades have been (as a team) to strip needy governments and corporations of their cash assets in return for favors from the US government via the State Department, via Hillary the $avior. WHAT A SCHEME that turned out to be! Interestingly, the records are all missing. Has anybody looked under the bed in Hillary's bedroom. History has been repeating for decades, and the devoted "Clintonites" are ready for a new chapter.... all the same, but only with much larger numbers.
    Oct 18, 2015. 03:57 PM | 3 Likes Like |Link to Comment
  • Running On Empty [View article]
    George.... with 435 members of Congress, we must maintain a degree of defense against surprises that any one of them might launch against our trading positions..... risk is always present and we option traders understand how to manage it.

    I was stopped out of my GILD positions, but now I am going to re-enter Monday with a short put sale for the last week of October expiration. I am selling the $97 strike and if assigned then I will not be disappointed with the discount received.

    I am doing the same with TSO with a similar strategy. Both companies will report soon, and I expect them both to surprise to the upside.
    Oct 18, 2015. 12:46 PM | Likes Like |Link to Comment
  • The 'Something For Nothing' Society [View article]

    I expect the final choices the electorate will have prior to the election will be among three individuals:

    Bernie the "Sander" who is attempting to "buy" the job of President through promises made to the uninformed that he will take from the wealthy (who he says stole the money in the first place), and turn it over to the masses who absolutely love the idea. These gullible folks do not realize the wealthy will move away and the economy will disintegrate and the jobs of these followers of Bernie will no longer exist.... Greece is the model that did the testing for Bernie's grand plan.

    Next is "Hillary the Hun", who in her final days of the campaign will make claims she is the best candidate for the job, as she is a woman and therefore can correct all the misdeeds of the "dirty old men who came before her". She also has much of the furniture that was stolen when she left the White House as the "first thief", as well as the cutlery stolen from Air Force One. She also will follow in the footsteps of Cezar Chavez and promise the "underclass" a world filled with benefits never seen before. The US will be the next Venezuela, shortly after her inauguration.

    Lastly is "Donald the Thump", as he will hammer the non performers who are employed by the Federal Government (most all of the currently employed) After the firings take place, the budget surplus will be astronomical and taxes will be reduced to levels never dreamed of before.

    The choices are there.... the voters will decide the future of the US.
    Oct 18, 2015. 12:30 PM | 3 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    It is interesting (I think) for the reason the magnitude of this entire scenario is so extensive. The banks in China, in reality, were the originators of this carry trade situation, as they felt comfortable with the Copper values and safety of the commodity. They were willing to grant the letters of credit which later were "hypothecated" in the US in the form of security for the low interest loans.

    The loans are made to Chinese citizens, as they are the ones that are doing the creative dance to get money out of their country. The copper is purchased at higher than market value with credits granted back to the purchaser for the "ahem"...surcharge. The Copper is purchased outside China, and shipped to China and then warehouse receipts are used to get letters of credit from the Chinese banks.

    As you have surmised... this is a major problem for all, if the interest rate spread contracts or even becomes inverted... Oh, Jeez !

    Anyway... the big funds are aware of this risk, and are now sitting on some very large short positions in the Copper futures (/HG). Two Trillion Dollars in excess copper is a big problem when the #1 consumer is experiencing an economy that is contracting.

    I'm not sure why China would still be filling warehouses.... maybe the warehouse inventories are not passing the "reality test" during the due diligence confirmation (as you have mentioned). When the Chinese - Copper carry trade arbitrage scenario ends, it will be somewhat violent for the copper prices for the reason the demand will be so far out of sync with the supply that is not needed.

    A better picture will be available Monday when the GDP numbers are released in China.... I expect a disappointment if the report is accurate.

    Keep an eye on this one, copacetic... it could end up being a very big deal that will no doubt have an effect on the metals markets.
    Oct 18, 2015. 12:06 AM | 2 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    copacetic.... I will exert some "godliness" before my departure, and attempt to give you an explanation....

    China has had for a very long time currency controls, that limited the transference of their currency outside the country. They have kept their currency expensive in order to attract money from the outside. As you might surmise, the Chinese are clever and when there is a will, there is a way, and often multiple ways if motivated.

    The Chinese banks will loan money against warehouse receipts, and the most popular medium for this scheme was the storage of Copper, and the banks were comfortable with this arrangement.

    The "carry trade" or otherwise known as an "arbitrage trade" is essentially the borrowing of money in one currency on the cheap, and then converting the money into another currency that is more expensive, and the arbitrageur invests into that country's fixed income securities that pays a much higher rate than the cost of the borrowed money.

    China has been keeping their rates high (in order to attract capital), and the US has been keeping rates very low (ZIRP). The arbitrageur borrows money in the US at cheap rates, and then converting the funds into Yuan and buying fixed rate securities at a much higher rate. (smart eh !). Because China has strict rules about taking money outside the country there has been a breach of these rules in order to attract capital from the outside, and the government looks the other way when companies and investors "overpay" for purchases made outside the country. This is a part of the "shadow banking system" that is in place.

    In order to facilitate this practice the Chinese banks have been issuing letters of credit backed by warehouse receipts, and it has turned out to be Copper in these warehouses ($2 Trillion). The copper was used for the reason it is a commodity that is widely used in the growth within China in the recent past, and the demand was thought to be endless with appreciation in price. The letters of credit from the Chinese banks were used to borrow money at low rates from US banks.

    The scheme has come under pressure for a few reasons... threat of interest rate increases in the US by the Fed, China has devalued its currency thus lowering rates in order to allow more exports, and the spread in the rates has tightened. This is just the beginning, as the economy in China is contracting, and the place is "awash" with warehouses filled with Copper. This commodity will be in "oversupply mode" for years as it get dumped on to the world market.

    As I mentioned above SCCO is vulnerable as it is still expanding into a Copper market that will be contracting. FCX has done just the opposite by cutting back and will be hit hard, but not so much as Southern Copper (Mike is buying it at present, I assume as a contrarian trade).

    This scenario is underway, but 2016 will be the year of the great "unwind", and the firecrackers in China will be quite apparent. Good luck to you copacetic.
    Oct 17, 2015. 10:42 PM | 2 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    Leopardtrader.... 1234Gel is not a "transformation" as suggested, but leopard trader sure could use a transformation in analytical skills.
    Oct 17, 2015. 05:39 PM | 2 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    Mike... you state you are "aware of the fact", so why in the hell are you not closing out your longs? You instead are ignoring the facts, and going long because of "supply and demand". WOAH !.... that is suicidal at minimum!
    Oct 17, 2015. 05:37 PM | 3 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]
    Leopardtrader.... you are delusional.... now you believe 1234Gel (me) is someone else. Look at my avatar, I am a female, and as I remember gelstretch was a male trader that left the site in disgust of your behavior, as was stated on the site.

    My impression of your trading knowledge is, however similar (quite dismal), but I am not a "transectual trader" as you have suggested. Now I am very concerned about your analytical skills.
    Oct 17, 2015. 05:27 PM | 2 Likes Like |Link to Comment
  • Gold And The Miners May Be About To Rally [View article]

    This is probably my last post, and I am making it to your attention.

    Your theory on Copper, Gold etc is completely without merit or knowledge, as is so much of everything else you mention in your post. Your warnings to Ben are also without merit, as he is one of the best analysts in the world when considering commodities, and you are not someone whom he would consider knowledgeable, nor informed.

    You are just thrilled with your position in SCCO.... I am on the other side of the trade with a massive short, along with those that have knowledge of what is happening in the Copper market.

    The carry trade between the USD and the Chinese Yuan is about to break apart. Central to this paradigm is the financing of debt through warehouse receipts for the storage of Copper as the medium. As this scheme unwinds over the coming months Copper will no longer be in demand and the oversupply will drive the price of Copper to levels that will shock even the bears that have placed so many short positions.
    Just to inform you... this is a $2 Trillion debt overhang, and it is based upon a commodity that is not even in demand for the reason the economic conditions in China are contracting. This Copper will be dumped on the market soon, without much in the way of buyers. China has bought over 50% of the world's production for some time, and it is in warehouses being used for carry trade arbitrage.

    Gold and other metals will also take a bow, as this Chinese shadow banking catastrophe plays out. I will be placing my Silver shorts on Monday in the form of multi month option spreads which will benefit from the changes soon to be recognized by the informed. FCX has cut production for reasons related to Carl Ichan buying 8.5% of the company with two off his employees joining the Board. He will ride the tsunami out and will likely buy more stock as the price drops, as predicted.

    Another bad call Mike.... Your December calls look grim at this point. I assume LT is following your guidance, so at least you have company.
    Oct 17, 2015. 02:35 PM | 4 Likes Like |Link to Comment