Howdy folks. How was your Thanksgiving weekend? Did anyone brave the malls, or are most of you like me now and willing to do all of your shopping online?
Whichever option is your preference, those of you who are also subscribers to our Under the Radar Movers service are starting the holiday shopping season out with a lot of extra cash. Why's that? The URM newsletter locked in a 100% gain on Heat Biologics (HTBX) today.
Yes, this is the same Heat Biologics we told you about on Friday. Like we said then, though we shared the pick with you, we didn't share any stop-loss or target-price details. Since we don't think it's fair to leave any loose ends untied, we just want to make sure you knew that trade was closed out.
We also just wanted to congratulate Under the Radar Movers members again.
I tell you what... it's been something of a thing of beauty. Today James Brumley and his crew banked a 100% gain on HTBX, but it was only a week ago he and the URM team booked a profit of 63% on RXi Pharmaceuticals (RXII) [that was one was also shared with you as a freebie back on November 18th]. In both cases, the holding period was a week or less.
Now, don't get the wrong idea. Not every trade turns out that well or makes progress that fast. On the other hand, not every trade has to do so well, so quickly. It only takes a handful of those kinds of wins to really beef up your bottom line in a year's time.
With all of that being said, we still contend the one great thing about the Under the Radar service that's too often overlooked is how well James and his time can time trade exits, getting out at the exact best time. The RXII trade? The URM newsletter made an exit on the 21st, which ended up being the peak day; the stock's been falling ever since. It remains to be seen if HTBX is also going to make a short-term peak today, but it sure looks like today's a near-term high.
That's half the battle in this game, and I'd venture to say it's the exits rather than entries that cause traders the most trouble. Brumley and his team have mastered the art of the exit, and that skill is maximizing the service's gains.
Like we said on Friday, you can stand by on the sidelines and watch everybody else book all these gains, or you can become a member of the Under the Radar Movers service and enjoy them for yourself. Better still, you can sign up for less than a dollar a day. A bunch of people just paid for an entire year's worth of service (and then some) with the Heat Biologics trade.
In any case, it looks like the weight of all the post-election gains are finally proving to be too much to support. It's still too soon to assume the worst though.
Take a look. It wasn't a bullish day, but it's not like it was a deal-breaker either. The support line that's guided the S&P 500 higher for the prior two weeks is still intact. And, even if that floor should fail, there's still a huge support area around 2160 where a bunch of moving average lines are converging.
Our guess is (still) that we're due a decent correction, and a test of the 2160 is looming... at least. It's possible the index could break under 2160 and dish out some real trouble, though given how we're in a reliably-bullish time of year, it would be a bit surprising if that happened. We'll see. There's something else going on right now, though, that may help us get a grip on how rough things could get for stocks.
We've mentioned this before, but it bears repeating now -- between bonds, gold, and stocks, one of the three should be moving higher at any given point in time, and at least one of the three should be moving lower. It's not a perfect relationship, but it's pretty darn close to it.
You also know from last week we're expecting gold to make a sizeable rebound effort here, and it's not exactly a secret that the bond-rout driven by an excessive (and preemptive) runup in interest rates is winding down as traders pare back their worries about how much rates will rise. If bonds are rising and gold is starting to perk up, that means the bullish undertow for stocks is slowing down... a lot. The performance-comparison chart of all three below shows how all each is starting to change direction.
It remains to be seen if any or all of these budding reversals turn into something. When you see all three making the turn at the same time though, there's usually something systemic happening. It's not often a mere coincidence.
I thought the Elite Opportunity Pro's John Monroe summed it up best with his simple assessment of their SPDR Gold Trust ETF (GLD) trade today:
"Gold appears to be trying to put in at least a short-term bottom right now, but we're clearly not out of the woods there quite yet. I've included a daily chart of GLD below, the primary ETF tracking the price of gold. As you can see, there's a little rounding pattern trying to form right now, however, a few days is not enough to get too overly excited about yet.
The bottom line is our suggested gold trade is a dicey endeavor right now, but one we believe is well worth the risk. You can see here gold has been beaten and battered for months now, but if our technical analysis is correct, we should get a fairly substantial bump in gold soon, one that should put our gold trade in a pretty good position for some nice upside with very little downside risk.
It still remains to be seen though, so just make sure you stick with your disciplines in the event the trade works the other way."
We know none of it's very certain; that's the point. But, if you wait until there's perfect clarity and absolute certainty to start placing trades or even just planning trades, you've already waited too long. Between John's call and our look at how bonds and stocks are starting to test the waters of a reversal, it's tough not to start looking at gold in a bullish light here.
With that as the backdrop, it looks like we're going to have another trading idea from you on Wednesday morning. It's a play on the budding rebound in gold, but it's not a gold mining stock per se. It's a.... well, you'll just have to see for yourself Wednesday morning.
We may try and drop a few extra hints about the idea in Tuesday's newsletter.