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Friday
Aug122011

SK OptionTrader Banks 53.67% Return in 23 Days

Whilst global financial markets endue turmoil, SK OptionTrader subscribers have been enjoying significant profits. On Monday 8th August the S&P 500 fell a massive 6.66%, but the model portfolio for SK OptionTrader subscribers was up 8.38% on that very same day. Days later markets plunged again, but SK OptionTrader made 8.77%.


Just recently we decided to bank some of these gains, closing a trade on GLD for a 53.67% gain in 23 days. The trade was called a calendar call spread, which is just a slight variation on buying outright calls. We signalled to enter the trade 18th July 2011 at $2.18 then signalled to exit the trade on the 9th of August at $3.35.

SKOT GLD Call Calendar Spread 53pct gain

The graph above shows the progress of the trade on a daily mark-to-market basis since we opened the position on July 18th. The LHS axis shows the percentage profit/loss and the RHS axis shows the price of the position.

To go into a little more detail the trade actually involved buying January 2012 $170 GLD calls and selling October 2011 $170 GLD calls. The idea of the trade is that selling the near term calls lowers the cost of buying the longer term calls, since the near term calls will decrease in value as expiration approaches since they are out of the money.

Admittedly gold prices rose faster than we had anticipated, but we are not complaining having made 53.67% in 23 days. In fact we had recognised that gold prices could go on a runaway rally and we had considered the implications that this would have on our trades.

We wrote to our subscribers explaining that “...The idea of this trade is that selling the nearer dated call can cheapen the cost of buying the longer dated call, especially if the nearer dated call expired worthless. If gold prices rocket upwards faster than we anticipate then this trade should still be profitable since it benefits from an increase in implied volatility as well as an increase in gold prices...”

At SK OptionTrader we always consider how alternative scenarios could impact our trades, and therefore design our trading recommendations to ensure optimal performance in a variety of market conditions.

Our trading signals are crystal clear, easy to understand and simply to execute. In this case we wrote to subscribers to give advanced warning that we were going to take a long position on gold and then on July 18th we wrote:

“We hereby signal to buy the GLD Jan-12/Oct-11 $170 Calendar Call Spread @ $2.18. This trade involves selling the GLD October 22nd 2011 $170 calls and buying the GLD Jan 21st 2012 $170 calls for a net debit of $2.18. We are allocating 5% of our capital to this trade.”

As you can see the signal was clear and simply to understand. It also contained a suggested amount of capital to be risked in the trade. We provide this with every trading signal to ensure our performance can be realistically measured, via the return on our model portfolio.

Then when we closed the trade on 9th August we were just as clear.

"SK OptionTrader Trading Signal: Close Long GLD Jan 21 ’12 / Oct 22 ’11 $170 Calendar Call"

"...We therefore signal to close our Long GLD Jan 21 ’12 / Oct 22 ’11 $170 Calendar Call Spread Trade, that we bought for $2.18 on the 18th July 2011 with 5% allocated, for $3.35
Closing this trade involves buying back the Oct $170 calls and selling the Jan $170 calls.
Having opened the trade at $2.18 on 18th July and closing at $3.35 on 9th August we have banked at 53.67% profit on this trade in 23 days.."


Hopefully this example has given readers a bit more insight into how SK OptionTrader works and therefore can help you decide if you would benefit from subscribing.

Investing just $500 in this trade would have produced a profit of around $268.35 – more than paying for a $199 six month subscription with the profits of just one trading recommendation.

In the interest of full disclosure we do current have other open trades, which are showing an average gain of 78.41% each. However details of these trades are for subscribers only, so if you want to receive our trading signals and market updates, sign up now.

The key stats on SK OptionTrader are as follows:

- Our model portfolio is up 347.50% since inception
- An annualized return of 110.47%
- Average return of 40.57% per trade
- 82 closed trades, 79 closed at a profit
- Average trade open for 45.98 days


Our full trading record can be viewed at www.skoptionstrading.com - with no trades omitted or altered. All trades are detailed exactly as they were sent to subscribers.

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.

This was the first trade that we have opened and closed with GAT and we are pleased that the Autotrading program has got off to a good start.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799

 



SKOT Return Model Porfolio 100811

SKOT Return 10000
Wednesday
Aug102011

As Markets Tumble Today, SK OptionTrader is up 8.77%!

Markets took another tumble today with the S&P 500 losing 4.42%, in Europe the DAX lost 5.13% and even commodities like copper were down 3.95%. However there was something to smile about for SK OptionTrader subscribers today, with our model portfolio gaining 8.77% on the day.

Daily Returns 10 Aug 2011

There were bright spots today in safe haven assets such as gold which was up 2.16% for the day, but SK OptionTrader vastly outperformed even those safe haven assets with a gain of 8.77%.

As a reminder, on Monday when the markets plunged SK OptionTrader’s model portfolio was up 8.38%.

We think this is both a testament to the trading approach of our service and the versatility of options as a trading instrument.

In the interest of full disclosure, we currently have 8 open trades, each showing an average gain of 78.41% since they were opened.

To find how we managed to profit despite the turmoil in the financial markets, all you need to is subscribe for just $199. This is not a lot of money in the grand scheme of things. If you had just $5000 invested in the S&P 500 you would have lost that much just today. However if you had invested that $5000 in accordance with the SK OptionTrader portfolio you would have more than covered your subscription fee in a single day.

A $10,000 portfolio invested in accordance with SK OptionTrader’s model portfolio would have been up $877 today, paying for a six month subscription more than four times over and an annual subscription more than twice over – in just one day!

2011 has been a tough year for the financial markets, with even some of the top hedge funds losing massive amounts. However in 2011 SK OptionTrader’s trading portfolio is up over 60%.




We provide our subscribers with simple straight forward trading signals as well as market updates and commentary on the market situation.

Other key stats on the performance of SK OptionTrader are as follows:

Our model portfolio is up 338.11% since inception
That's an annualized return of 117.00%
We have an average return of 40.41% per trade including losses
We have closed 81 trades, 78 closed at a profit
The average trade is open for 46.27 days


Our full trading record is available to view on our website www.skoptionstrading.com

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799

 


portfolio-chart-220511-resized.jpg
Wednesday
Aug102011

When Buying Gold Becomes a Life-or-Death Question

Dollars or Gold 11 August 2011.JPG




By Jeff Clark, Editor BIG GOLD, Casey Research

I was recently asked in an interview if I thought gold was going to $5,000 an ounce. “No,” I said bluntly. “I think it’s going higher.”

“You’re that optimistic?”

“No,” I replied. “I’m that pessimistic.”

Imagine the condition of our world if gold reached $5,000 an ounce – and kept soaring. We’ll likely be in a mania if that happens – but what kind of mania will it be? There’ll be some greed to be sure, but I think there’s a good chance a deeper reason will be at play. And it’s the same reason that will drive you to keep buying gold at $2,000 an ounce.

You’ll have to.

There are 101 reasons to own gold right now. You might buy because of the debt turmoil you see around the globe. You may think it wise, like the Chinese and others, to keep some of your savings in gold. Negative real interest rates may draw you to gold. You might buy because of the mere fact that demand is overwhelming supply. Or you fear inflation. Or deflation.

But most of these factors are missing one critical element: They’re not yet personal.

Most reading this have not had to flee their country, been the victim of hyperinflation, or watched helplessly as their currency went poof! Longtime investors have made money on their gold investments, to be sure, but most of us bought the yellow metal as an investment and not because of a do-or-die situation.

It’s doom and gloom to say this, but I think it’s possible and perhaps even probable that at some point we’ll all feel forced to buy gold, almost irrespective of price, due to a sudden and rapid depreciation of the U.S. dollar.

How do we get to that point? Simple: You go to buy something and realize you’ve just been priced out of the market, not because the item is too expensive, but because you suddenly realize the money in your hand no longer has purchasing power. Your reaction to that event is predictable: You feel cornered, maybe even scared, and the urgency to seek an alternative takes over.

This is obviously an inflation scenario, but it’s not exactly a stretch to get there from where we are today. Here’s why.

The following chart tracks the dollar and gold adjusted by the CPI from 2000 to present. It catches many people off guard, once they realize its implications. Look what’s happened to the greenback in the past 11+ years:

Since the Y2K scare, the dollar has lost an incredible 25% of its purchasing power. Even adding the measly interest one would earn in a traditional savings account doesn’t make up for this loss. This isn’t a picture of the dollar since the creation of the Fed or since Nixon took us off the gold standard. This is what’s happening right now – a gross devaluation of your dollar-based savings. Gold, on the other hand, has not only preserved but increased our purchasing power.

Now, imagine this scenario on fast forward. Instead of a 25% loss in 11 years, what if it occurs in, say, two years? That’s what can happen in a highly inflationary environment. At some point, given the baked-in consequences for our currency and the unwillingness of politicians to effectively deal with the problem, you one day instinctively realize, as you hand money to a cashier to buy milk and she asks for more, that it is a depreciating asset and no longer a stable form of exchange.

In other words, you won’t buy gold at $2,000 an ounce because you think it’s going to $6,000; you’ll buy gold because you fear the dollar will continue losing its ability to meet basic monetary requirements and you’ll need a substitute, something that will retain its value.

Regardless of whether the downward trend with the dollar continues at the same pace or speeds up, one thing is clear: It will continue. You must portion some of your savings in gold.

Sooner or later I think we all will have an epiphany about money that pushes us to buy gold, even if it’s at levels that would seem expensive today. When that time comes, you won’t be focused on the price of gold but on the absolute need to acquire a more lasting asset.

If I’m right, $1,700 is not a high price to pay.

[For many, $1,700 at a pop is a lot of money to come up with for an ounce of gold. But Jeff found a way to buy gold and silver for $100/month, and was so impressed with the programs that he uses them himself. Check out his top two recommendations in the brand-new issue of BIG GOLD and start accumulating enough gold and silver to protect your savings from ongoing devaluation.]



Regarding www.skoptionstrading.com. In the interest of full disclosure, we currently have 8 open trades, each showing an average gain of 78.41% since they were opened.

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG






Monday
Aug082011

Markets Plummet But SK OptionTrader Gains 8.38% for the Day!

There is a saying that a picture is worth a thousand words, but the image below was worth thousands of dollars to SK OptionTrader subscribers today.

Daily Gains 08 Aug 11

Despite global markets plummeting in trading today, SK OptionTrader subscribers were able to reap significant profits. The S&P 500 lost 6.66% today but the SK OptionTrader portfolio gained 8.38% for the day.

There were bright spots in gold and silver, which gained 3.32% and 1.87% for the day, but SK OptionTrader vastly outperformed even those safe haven assets with a gain of 8.38% today.

This is both a testament to the trading approach of our service and the versatility of options as a trading instrument.

We currently have 9 open trades, showing an average gain of 58.33% each since they were opened.

To find how we managed to profit despite the turmoil in the financial markets, all you need to is subscribe for just $199. This is not a lot of money in the grand scheme of things. If you had just $3000 invested in the S&P 500 you lost that much just today. However if you had invested that $3000 in accordance with the SK OptionTrader portfolio you would have more than paid for a six month subscription in just one day!

A $10,000 portfolio invested in accordance with SK OptionTrader’s model portfolio would have been up $838 today, paying for a six month subscription more than four times over and an annual subscription more than twice over – in just one day!

2011 has been a tough year for the financial markets, with even some of the top hedge funds losing massive amounts. However in 2011 SK OptionTrader’s trading portfolio is up over 50%.




We provide our subscribers with simple straight forward trading signals as well as market updates and commentary on the market situation.

Other key stats on the performance of SK OptionTrader are as follows:

Our model portfolio is up 338.11% since inception
That's an annualized return of 117.00%
We have an average return of 40.41% per trade including losses
We have closed 81 trades, 78 closed at a profit
The average trade is open for 46.27 days


Our full trading record is available to view on our website www.skoptionstrading.com

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.

Subscribe for 6 months - $499

 

Subscribe for 12 months - $799

 



portfolio-chart-220511-resized.jpg

Monday
Aug082011

JPM Sees Gold At $2,500 By Year End

gold chart 09 aug 2011.JPG


Apologies for whizzing you around to all the corners of the web but we thought that this post would be of interest to you, it can be found on zerohedge, which in our humble opinion is well worth a visit when you can find the time.



We though we had seen it all... Then JPM's Colin Fenton came out with a prediction of gold hitting $2500 by year end. That's right: JP Morgan... $2500...."Gold and sugar have potential to run a lot higher. It has been clear for weeks that the prompt CMX gold price has been building in a rising probability of a reflaring of financial crisis, gaining by 9.7% since June 30 as the MSCI World Equity index dropped by 10.1%. The correlation in daily price changes between these two assets has dropped to –0.09 from +0.29 over the prior year. Gold’s correlation against TIPS has doubled to 0.35 from 0.18. Against Italian and Spanish 5-year sovereign CDS prices, the gold correlation has moved to 0.27 and 0.32, from 0.07 and 0.04, respectively.Before the downgrade, our view was that cash gold could average $1800 per oz by year end. This view will likely now prove to be too conservative: spot gold could drive to $2500 per oz or higher, albeit on very high volatility." Funny, when discussing yesterday's Goldman upgrade of gold we said: "Next up: everyone else." Little did we know...  Also, it is unclear if Blythe precleared this client note. But at this point it probably does not matter.

Taking a quick look at the chart we can see that gold prices are doing really well with yet another all time high. Just a quirk of ours but we would prefer not to see this sort of gap appearing on any chart as prices jump higher, as there tends to come a time when gold back tracks to fill the gap, but its just an observation. The technical indicators are firmly in the sell zone with the RSI standing at 80.64 and usually when the RSI pops up above the '70' level that usually signals that we just might be in for a breather.

However, the world is in turmoil and as we have tried to point out, gold, as always, remains the safest haven on them all, so do try to acquire some of the physical metal and keep it in your hands, outwith the banking system.

When you have acquired both physical gold and silver you may want to acquire some of the quality producers, however, they appear to be temporarily out of favour and don’t offer the leveraged return that they did in the early part of this bull market. Our solution to finding leverage on these two precious metals is to make use of the ETFs, both GLD and SLV as vehicles for options trades. Options trading offers the possibility of handsome returns providing you get the timing right, however, the losses can mount quickly if you position yourself on the wrong side of the trade. As with any good investment decision timing is crucial to the success of your trade, whether it be in the options market or in your acquisition strategy as you build up your core position in this, the most exciting sector of the market. This is our mantra and it has been the same for many years now and we doubt that it is going to change in the next few years as we are of the opinion that both gold and silver will enter a parabolic phase and go exponential with mind boggling all time highs being made.

Looking a little further down the line we have to reiterate that the financial crisis is not behind us, it is ahead of us. The worst is not over, it is yet to come. For those who hang onto the fiat currencies things are going to become more expensive as each day passes, as inflation firstly takes hold and then becomes rampant. For those who hold gold and silver, prices are becoming cheaper as both these metals buy dramatically more than they use to and they will continue to do so.

So, get your head out of your day job and draw up your very own 'acquisition' plan and implement it as quickly as you possibly can.



Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena and they are all showing a healthy profit, all aboard!



For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG


Sunday
Aug072011

$1700.00 Gold as Markets shaky on US downgrade and the ECB’s intention to buy bonds

gold at 1700 08 aug 2011.JPG

Expect a rather volatile week as investors digest the effects of the the dollar downgrade and The European Central Bank's intention to go on a bond buying spree.

It will be interesting to observe just where investors go to seek protection and safety, the USD or the precious metals space?

As we write gold prices are standing at $1698.30/oz and silver prices are standing at $40.23/oz with dollar down a tad. However, we may get some big number wobbles as gold approaches $1700.00/oz, nothing technical, more a psychological barrier to it making further progress, but don’t count on it as gold is very strong at the moment.

This is an excerpt that was posted on Business Week earlier today regarding the ECB:


The European Central Bank says it will "actively implement" a bond-purchase program that could boost Spanish and Italian bonds and drive down interest yields that threaten those countries with financial disaster.

Sunday's statement from bank President Jean-Claude Trichet comes as global finance officials discussed ways to ward off more turmoil ahead of the opening of financial markets on Monday, the first substantial trading after the U.S. lost its triple-A bond rating from Standard & Poor's on Friday.

Officials from the Group of 20 rich and developing countries also held talks aimed at minimizing market shocks. G-7 officials were reportedly to confer before markets open in Asia as well.

The G-7 includes Britain, Canada, France, Germany, Italy, the U.S. and Japan, while the G-20 includes those countries and large emerging economies Brazil, Russia, India and China.

The burst of activity on a Sunday in August underscored how government debt levels in Europe and the U.S. have unsettled financial markets -- and sharpened fears that debt troubles could derail the global recovery from the 2007-2009 financial crisis.

The statement from the ECB, issued after a conference call among its officials, did not say which countries' bonds it would buy or the amounts.

But the beneficiaries are expected to be Italy and Spain, market analysts say. Italy and Spain are trying to avoid the spiraling interest rates that forced Greece, Ireland and Portugal to seek bailout loans. Purchases could drive up bond prices, which move in the opposite directions from interest yields.

Last week, yields for both countries were above 6 percent, moving toward the levels that upended the three smaller countries. Italy in particular is regarded as too large for Europe's euro440 billion bailout fund to rescue, raising the possibility of a financial disaster that could devastate the eurozone economy.

Analysts at Royal Bank of Scotland said recent moves by Italy to strengthen its finances helped bring the ECB to its decision. The bank was reluctant to come to the rescue unless governments first close the holes in their finances.

The bank statement Sunday said it was "essential" for them to follow through on their commitments.

Italian Premier Silvio Berlusconi said last week that Italy would balance its budget in 2013, a year earlier than previously expected, and speed up other budget measures.

"The ECB will start a large scale bond buying of Italian and Spanish sovereign bonds on Monday morning in our view as euro area governments have signed up to additional fiscal measures where needed," the analysts from RBs said.

They said the purchases could run euro2.5 billion ($3.5 billion) a day and reach euro600 billion if continued for a year -- but "will stop the collapse of the bond market in countries under stress."



Over on King World News, Peter Schiff reckons that Buffet was wrong:

When asked about gold Schiff stated,

 “The dollar used to be the safe haven, Treasuries used to be the safe haven, well if you are downgrading US Treasuries, obviously they are not the safe haven anymore.

For those people who believed foolishly that Treasuries were the safe haven, S&P is finally saying they’re not.  In fact they (Treasuries) are on negative watch for a reason, I think S&P is going to downgrade again...by then I’m sure Moody’s and Fitch will have also downgraded US Treasuries.”


When asked about Warren Buffett’s comments where he said S&P made a mistake by downgrading US debt Schiff responded as follows:

“Well he owns a big chunk of Moody’s doesn’t he? Moody’s hasn’t lowered their rating, so somebody is mistaken, it’s either Moody’s or S&P. It stands to reason that Buffett would say his competitor was mistaken rather than himself.


So there you have it, go gently out there and as always, expect a white knuckle ride!



Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena and they are all showing a healthy profit, all aboard!



For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG


Friday
Aug052011

Compromise, D.C.-Style

Washington DC 06 August 2011.JPG



By Vedran Vuk, Senior Analyst, Casey Research

With a last-minute debt deal reached, I’m reminded of two holy words in Washington: “compromise” and “bipartisanship.” It’s amazing that the political elite have so twisted the English language as to lend virtue to these terms. In Washington, these words hold intrinsic value… similar to how “truth” and “honesty” do outside D.C. Unfortunately for the American public, Washington compromises have been and will continue to be the death knell of the U.S. economy – and particularly the free market.

Rarely does compromise ever benefit the small-government side of the argument. Instead, compromise increases the size of the state step by step. For example, suppose the left wants $2 billion for organic school lunches. Of course, the free-market guys are against this bill; they want $0 dollars in extra spending. So, what’s the compromise? The two meet at $1 billion.

But this only makes one side better off. In a true compromise, each side would get something. In this case, spending grows by $1 billion, and the small-government side gets nothing from the deal. Future spending was simply reduced from $2 billion to $1 billion. The small-government advocates are further away from their goal than they were prior to the deal. In a way, this really isn’t a compromise at all.

One could think of similar examples to prove the point. Suppose someone wanted to put ten drops of arsenic in your food. Does negotiating the person down to five drops improve the situation? No, it doesn’t. That’s exactly how America has been poisoned over time. Sometimes the dosages are smaller, but it’s the same lethal stuff for our long-term fiscal situation.

This happens with regulation as well. Think about the Dodd-Frank Act. The financial industry has been fighting tooth and nail first with Congressmen and now with the government bureaucrats implementing the law to reach a compromise on the particulars of the law. But it’s not a compromise where the financials win: Rather, it’s a battle to lose less. “The struggle to lose less” has become the definition of a Washington compromise.

A real compromise would involve a tradeoff where both parties gain. For example, regulations could be increased on derivatives, with deregulation occurring in other parts of the financial sector. Trust me; there are plenty of harmful regulations on the books. Each party gains something and trades something else. That’s how compromise works in the real world.

But don’t expect to see this happen anytime soon – at least not in regard to the free market. In reality, these tradeoffs do happen. However, it works more like this: “I’ll sign your war spending bill if you sign my local pork stimulus bill.” Sure, that’s a real D.C. compromise – and a third party is the real loser, i.e., the American taxpayer.

[These kinds of compromises have also allowed the political leaches to bleed your bank accounts. Read this free report to learn all about it and to start profiting from it.]


Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena and they are all doing well, all aboard!


 For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG

The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Disclaimer: Gold-prices.biz or SK Options Trading makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents our views and replicates trades that we are making but nothing more than that. Always consult your registered adviser to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this letter. Options contain a high level or risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. Past performance is not a guide nor guarantee of future success.







Thursday
Aug042011

The Third Phase In This Gold Bull Market

This is a missive just in from Jim Sinclair of www.jsmineset.com which might give you some comfort after the bruising that the gold producers took today.

Jim Sinclair.JPG

Dear Friends,
 
I am in London this evening in my room posting as much serious material as possible to help you understand the new nature of gold; a nature fraught with unprecedented volatility. I will deliver my presentation tomorrow. Right now we have to talk.
 
Gold from $248 to $524.90 was an arithmetic uptrend based on a re-birthing of gold's currency roll.
 
When gold broke out above $524.90 I asked you to please cease trading as gold had moved from phase 1 into a runaway price phase 2. It is this phase which has given you prices in excess of $1650.
 
$1764 has the same significance as $524.90 because it represents phase 3, the point when a runaway price market for gold would gain exponential properties.
 
Because $1764 is such significant a number you can expect one of the more serious price battles before the price departs to Alf Fields' and Armstrong's higher potentials.
 
To sum up the situation you haven't seen anything yet.
 
As strange as it sounds right now, soon you will begin to see the bearish cabal on mining shares looking for cover where gold will be sold for correct precious metals shares.
 
Keep the faith. $1650 has been the minimum upside since $248, not the most likely top.
 
Respectfully,
Jim

You might want to bookmark his site for future reference and also register for his FREE newsletter, just a thought.

Keep the big picture in mind and hold on tight, as we have said before, its going to be a white knuckle ride!


Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena and they are all showing a healthy profit, all aboard!



For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG
Thursday
Aug042011

Endeavour Silver Corp: One for your Core Holdings

EXK Chart 04 August 2011.JPG

We initially bought Endeavour Silver Corporation (EXK) for $3.97 many moons ago and have maintained a core position ever since with our average purchase price standing at around $4.00. Today Endeavour closed at $10.61 so we are more than pleased with the progress this stock has made.

A quick look at the chart and we can see that this silver producer is up ten fold in a few short years and in our opinion is now set to go further as mine development and new discoveries continue to be reported.

As we see it this company forms one of the foundation stones of our core position and we intend to add to that position in the near future.


We'll now take a look at the latest results starting with this comment from Bradford Cooke, Chairman and CEO:

"Endeavour posted healthy financial and operating results in the Second Quarter, 2011 and continued to grow its cash position and working capital thanks to a robust and rising gross profit margin. As a result of rising silver and gold production and substantially higher precious metal prices, our sales revenues, operating cash-flow, and adjusted earnings were all up sharply compared to Q2, 2010."

"Endeavour is well on track to meet its 2011 guidance for silver production (3.7 million oz) and cash costs (< $5.70 per oz), with our better than expected First Quarter results being partially offset by a slower Second Quarter. Cash costs of production did jump in Q2, 2011 as industry-wide cost pressures caught up to us during the quarter. While costs such as labour, power and consumables will likely continue their slow rise, we expect our cash costs of production to start falling again once the economies of scale from our new mine and plant expansion at Guanajuato take effect."

Cash costs are currently running at $6.98 per oz silver produced leaving lots of room to generate profits going forward.



Highlights of Second Quarter, 2011 (Compared to Q2, 2010)

Adjusted Earnings (non-IFRS measure) escalated to $10.6 million ($0.12 per share) compared to a $1.4 million loss (see IFRS comment below)

Net Earnings (IFRS measure) increased to $17.0 million ($0.20 per share) compared to a $3.2 million loss

Operating Cash-Flow jumped 553% to $21.3 million

Mine Operating Cash-Flow rose 151% to $23.6 million

Revenues climbed 85% to $36.4 million

Silver production up 3% to 850,476 oz

Gold production up 8% to 4,831 oz

Silver equivalent production up 4% to 1.04 million oz (40:1 silver: gold ratio, no base metals)

Realized silver price up 102% to $37.65 per oz sold, realized gold price up 26% to $1523 per oz sold

Cash cost up 6% to $6.98 per oz silver produced (net of gold credits)

Gross profit margin up 241% to $30.67 per oz silver

Working capital up 31% to $133.6 million, with cash and short term investments of $108.9 million


Endeavour owns and operates two high-grade, underground, silver-gold mines in Mexico, the Guanacevi Mines in Durango State and the Guanajuato Mines in Guanajuato State. The outlook for the Third Quarter, 2011 is as follows:


In Q3, 2011, Endeavour anticipates its financial performance will continue to improve, reflecting still rising silver and gold prices, a modest increase in precious metal production once the new expanded mill and flotation circuits at the Guanajuato plant are commissioned during the quarter, and falling cash costs related to the new economies of scale at Guanajuato. However, industry-wide cost pressures such as rising labour, power, fuel and consumables costs will likely continue to partially offset the Company's progress towards cost reductions at its two mining operations.

Similar to 2010, the first two quarters of silver production in 2011 were relatively flat as forecast, with the operations team focused on the mine development and plant expansion capital programs. Silver production is expected to start rising again late in the third quarter, once the mine and plant expansion at Guanajuato is completed. 

To read this news release in full, which contains a lot more in the way of detail please click here.

Endeavour owns and operates two high-grade, underground, silver-gold mines in Mexico, the Guanacevi Mines in Durango State and the Guanajuato Mines in Guanajuato State.

Finally, we were in touch with Hugh Clarke, Vice-President Corporate Communications, who summarized their position as follows:

Look for increased production starting in the latter half of Q3 as we bring the new circuit online at our operations in Guanajuato. Cost pressures are evident throughout the industry and this is not going to abate any time soon. We plan to combat this through higher production, higher recovery rates and increased efficiencies.

We are actively drilling and we expect to have a steady flow of drilling results over the coming weeks and months. As well, we will be announcing new acquisitions of exploration properties in the near future.

As usual, the company is in excellent financial condition.....rising profits, $133 million in working capital (mostly cash and short term investments) and no debt with only 85 million shares issued.

Hugh Clarke.JPG
Hugh Clarke


Endeavour Silver Corporation is traded in Canada, USA and Europe on the following three stock exchanges:

(TSX: EDR)
(NYSE-AMEX: EXK)
(DB-Frankfurt: EJD)

So they have plenty of exposure to the investment market.


Regarding www.skoptionstrading.com. We have now placed a number of trades in the options arena and they are all showing a healthy profit, all aboard!



For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with GlobalAutoTrading and therefore auto trading is now available for SK OptionTrader signals


Our model portfolio is up 338.11% since inception

An annualized return of 117.00%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days


sk chart 22 May 2011.JPG



The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.



To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

SK logo 26 May 2011.JPG
Tuesday
Aug022011

US Yield Curve Flattening To Prompt Fed Easing and $1800 Gold

Gold prices made yet more all time highs in the last trading session, propelled by what we think was a short squeeze. Many traders were probably betting that gold prices would decline once the US debt ceiling was resolved; however this was not the case. In this article we will outline one longer term factor that we think will drive gold prices past $1800 in the next six months; the flattening of the US Yield curve. We believe the flattening of this curve is a symptom of economic weakness and coupled with rising unemployment will be the catalyst for the Fed to embark on another round of monetary easing which will send gold prices past $1800. In fact, $1800 is a conservative target.

Weaker economic data from the US has caused the yield curve for US Treasuries to flatten significantly in recent months. However when the July manufacturing ISM came in at 50.9, well below the predictions of around 55.5, the curve flattened to a level not seen since August 2010. It was in August 2010 that the Fed first hinted at QE2 and therefore the fact that the curve has got back to this level puts pressure on the Fed to embark on another round of monetary easing. Whether this will be through QE3 or some other mechanism we do not know, however we are confident that further easing of US monetary policy is very bullish for gold prices.

For those readers who may be unfamiliar with how the yield curve works, we will provide a brief explanation. Bonds of different maturities have different yields. By plotting these yields against their maturities we can build a yield curve. The yield curve becomes steeper if longer term interest rates increase relative to shorter term interest rates. The yield curve becomes flatter if longer term interest rates decrease relative to shorter term interest rates. One way to measure the steepness of the yield curve is to look at the difference between the yields at two different points on the curve. For example one may look at the difference between the yields on 2 year Treasuries compared to the yield on 5 year Treasuries. Such a comparison will often be referred to as “2s5s” and is measured in basis points (bps) by subtracting the shorter term yield from the longer term yield. So if one says “2s5s are trading at +225” this means that the yield on 5 year bonds is 2.25% higher than the yield on 2 year bonds. If 2s5s go from +225 to +275 then the yield curve has steepened between those two maturities. If 2s5s go from +225 to +175 then the yield curve has flattened between those two maturities.

Now there is no one exact interpretation of what causes shifts in the yield curve. The curve changes with changes in inflationary expectations, default risk, equity markets, the outlook for future interest rates as well as other factors.

However in our opinion the recent run of poor US economic data has been causing the curve to flatten. A weaker economy means that interest rates will probably be held lower for longer, therefore longer term interest rates fall relative to shorter term interest rates, causing a flattening of the curve.

We view gold as a currency and since currencies are tightly linked with interest rates, we have a large focus on the US and global interest rate market. We are bringing your attention to the flattening of the curve since it has now reached a level not seen since August 2010, when the Fed first hinted that QE2 was going to be carried out. The chart below illustrates our point.


UST Curve 2s5s 5s10s Aug11


This flattening of the curve is a symptom of a weakening economy and if this continues it puts pressure on the Fed to act; particularly if unemployment begins to rise again. Further monetary easing by the Fed is massively bullish for gold prices.

This Friday we have the US non-farm payroll data and if this figure comes in below expectations, as it has done for the past couple of months, this will increase the pressure on the Fed to act. This coupled with a drop in core inflation would almost guarantee further monetary easing. Remember that unlike some central banks the Fed has a dual mandate to maintain price stability and full employment; therefore it is not enough that core inflation is within a tolerable range; the unemployment rate must come down too.

In terms of what form further easing from the Fed could take, there are a number of options. We could see another round of QE or other asset purchase programs. However since QE1 and QE2 have not provided a sustainable recovery, there is a strong possibility that the Fed will try something different this time. First we would expect to see a change in the language of the Fed statement, a change that implies that interest rates will remain lower for longer. We then could see the Fed setting a cap on longer term interest rates, such as the 2 year or 5 year rate on Treasuries. All these forms of monetary easing are massively bullish for gold prices.

However despite this August bearing significant similarities to August 2010, it is important to highlight the differences. The most important of these is that inflation is much higher. In the US core CPI increased at an annualized rate of 2.5% over the last six months. However inflation expectations are at levels consistent with the Fed’s mandate. Therefore we do not think that the threat of inflation will prevent the Fed from easing, since it is still in its target range and even if inflation moves out of its target range the Fed believes it can contain inflation easily by raising interest rates. The other half of its mandate, unemployment, is well outside its range and in the Fed’s view presents the larger threat at this point in time.

In summary this is how we view the dynamics of the US interest rate market affecting gold; The yield curve has flattened and may continue to do to, this shows economic weakness in the US. With a weak economy unemployment is unlikely to fall and will most probably rise. This will prompt the Fed to embark on additional monetary easing in an attempt to boost economic growth and combat unemployment. Monetary easing is bullish for gold, as shown by its inverse relationship with US real interest rates in the chart below. (Please also see our previous article: Decline In US Real Rates To Send Gold Past $1800 for further explanation of this relationship. We view it as the key determinant of gold prices in the medium to long term)


US 10yr TIPS vs Gold YTD Aug-11

At SK OptionTrader we use options on GLD to optimize our trading returns on gold, options that can be traded from most US brokerage accounts that allow stock options trading. Looking at our track record and only considering gold based trades, SK OptionTrader has outperformed both GLD and HUI nearly 7 times over. This was achieved not merely by taking excessive leverage, but by timing moves in the gold market and identifying options trades with strong risk-reward dynamics to benefit from them.

Our model portfolio is up 338.11% since inception, that's an annualized return of 117.00%.
We have an average return of 40.41% per trade including losses. We have closed 81 trades, 78 closed at a profit. The average trade is open for 46.27 days.


In the interest of full disclosure we do have trades open at present, the average gain of these trades is currently 54.88%, but we think there is a lot more to come. So sign up now to get on board and begin receiving our market updates, trading signals and model portfolio.


Our full trading record is available to view on our website www.skoptionstrading.com

For those subscribers who are too busy to trade their own accounts we are now able to offer an Autotrading program with our SK OptionTrader service, as we are pleased to announce that we have entered into a partnership with Global AutoTrading and therefore auto trading is now available for SK OptionTrader signals.

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