Contango and The Dire Effects on UNG Once Again Proven

On Setember 14 we posted about the state of contango an its dire effects on UNG. This is precisely what happened.

Buyer beware.

New ETF To Be Launched Trades Based on Share Buybacks

This is quite interesting.

A new ETF is being launched in early October and invests based on share buybacks by companies.

The TrimTabs Float Shrink ETF (symbol TTFS) will open for trading on Wednesday, October 5, 2011. The portfolio management team of TTFS is a part of TrimTabs Asset Management (“TrimTabs”).

TTFS’ investment objective is based on TrimTabs proprietary research, which measures the "change in float shrink" (net change in number of shares outstanding), the change in free cash flow (after tax income + non cash charges – capital expenditures) and net debt issuance.  The strategy selects the top 100 U.S. stocks based upon float shrink, free cash flow growth and net equity ratios from the largest 3,000 U.S. based companies.  Those 100 stocks are then equally weighted and periodically reallocated and rebalanced as corporate metrics change. 

The premise here is that share buybacks are a good indicator of stocks going up. Sounds very reasonable.

Charles Biderman is the founder and Chief Executive Officer of TrimTabs. He says that “Top insiders at a firm know more about its fundamentals than the investing public. We have discovered that it has been strategic over the years to buy the overall market when the trading float of shares is shrinking; and to sell the overall market when the trading float of shares is growing.  We have discovered that float shrink, free cash flow and debt/equity analysis have been good indicators in determining future performance of stocks.”

Noah Hamman, CEO and Founder of AdvisorShares. : “We believe investors will be excited about TTFS because it is a fundamentally attractive alternative for U.S. equity market exposure to a Russell 3000 or S&P 500 Index. Why own the entire U.S. market when you can buy the 100 companies shrinking their trading float of shares, growing cash flow and not borrowing to buy back shares?”

Natural Gas Results: +220% ROI UNG

This was from yesterday.'s post

ROI was 220% for the September straddles (as of 2:10PM).

Contango Strikes Back In Full Force; Natural Gas and UNG Poised to Explode

Which way is the question, but that is matter?

The price of natural gas has held relatively steady in recent weeks.While this is good news for investors in the commodity, contango is now back in full force.

Contango means very bad enws for UNG as it has to pay more every month to roll over its
contracts: same money, fewer contracts. This is buyer beware.

This is however, hurricane month and season, all the makings for a very interesting - and volatile -  combination. Just near perfect.

Below are straddles for UNG for both September and October 2011. These allow an investor to profit either way, up or down.

September only has 2 more days to go and is an obvious extreme risk. October requires an 8% move or so for the position to become profitable.

This is not advice. Options are very dangerous and may cause 100% loss. Please do your own due diligence.

The German courts decide on bailout legality: Effects on the Euro ETF, FXE, GLD, ad TLT

The German courts decide tomorrow whetehr the European baiklouts are illgeal. While they seem to be, it is unknow if the courts will be willing to say so. Either way, the Euro will move, and so will the markets, gold, and bonds.

Below are straddles for FXE, GLD, and TLT.

Computed with StraddlesCalc.


Please do your own diligence. Options are very dangerous and may cause 100% loss.

ETFs, Bernanke, and The Tooth Fairy: Profit Either Way From Jackson Hole Decisions; The Perfect Setup

Many are expecting Bernanke to save the world and engage an another massive 'kick the can down the road" exercise tomorrow, i.e, QE3.

As such, QE3 may already be built-into prices.  If Mr. Fisher is right, and Bernanke is not the tooth fairy, the market swill be disappointed, and prices will reflect this. If QE3 happens, then gold will resume its parabolic move. It's a perfect setup.

Here are straddles on popular ETFs, to profit either way, up or down. Computed with StraddlesCalc.

Given the volatility, massive moves are possible, and so are profits, as were our past straddles last month.

This is not advice. Options are dangerous and may cause 10% loss. Please do your own due diligence,.

As gold goes parabolic, gold and silver ETFs soar higher

We track gold etfs live here at http://goldetfs.nexalogic.com. Here is the latest:

There are several returns in the hundreds of percentage points.

On Market Collapses and 4X Profits on ETF Straddles, IWM, FXY, USO

Here's the current update on the ETF starddles:

An ROI of +290%, is just about a 4X return, not bad.

With 1 day to go in August, that is pretty much over, so we now look at September.

Here are new straddles for September: