Gold ETFs Jump as Buying of Physical Gold is Intense

A report by Reuters today confirms that physical gold buying has been "exceptional", taking today's prices much higher. With it, gold ETFs are soaring, as expected.

We track all gold ETFs live here.


"... Meanwhile, heavy buying of physical gold stocks -- often a price-sensitive area of demand -- suggested that Monday's price fall had whetted investors' appetite for the metal.

Swiss bank UBS said it had seen very strong physical buying in Asia, particularly number one bullion consumer India, on Monday. "To be clear, physical demand right now is not just decent, it is exceptionally strong," the bank said.

Other precious metals also bounced back after Monday's hefty losses. Silver, which slid as much as 16 percent to a 10-month low of $26.04 an ounce on Monday, rose more than 9 percent to a high of $33.48 an ounce.

Spot platinum was up 1.3 percent at $1,575.50 an ounce, while spot palladium was up 3.7 percent at $650.22 an ounce.

Gold's premium over platinum stood at around $90 on Wednesday, with a ratio of 1.06, its highest in 20 years".

FXY and the next Bank of Japan intervention; a la Swiss? Yes, says Nissan.

The question is not If but When will the bank of Japan intervene to lower the yen.

Today, a Nissan Motor Co. senior executive urged Japan to take "decisive" action to prevent the strong yen from hollowing out the country's industrial base. He also mentioned that they should learn from Switzerland's intervention in the foreign-exchange markets to weaken its currency.

Can you imagine if all central banks had the funds to intervene to lower their currencies? "I have more money to weaken my own currency than you!".

Here are current FXY straddles, from the wonderful StraddlesCalc tool.

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

Surviving - And Profitting - From Meltdown or Wild Monday, With ETFs

Gold and silver were severely beaten up in these last two days, and there are even more renewed talks of a Greek default. The possibilities were even mentioned by the Greek finance minister himself. Some say this could be prelude to major weekend action.

A meltdown Monday, or a massive injection of money and stimulus will cause the market to move wildly.

Below are straddles computed with StraddlesCalc tool.

As always, options are very dangerous and may cause 100% loss. Please do your own due diligence.

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.