Day Trades in Play for June: Solars / Precious Metals

Sharing some of my notes with you here.  With the VIX moving up and down like a small firecracker I think it’s time to start changing strategy here.  Whenever the VIX starts moving crazy again, then you know you have some opportunities for day-trading setups.  For the past few MONTHS, the VIX sort of just coasted down, which made for great swing long plays.  With the game changing here, I suggest scaling out of dead swing plays and reserving more cash for quicker day-trades, aka “the matrix trades.” So far I’m looking at two spots for high surf:

1)  Solars:  we are going for a “sell-the-news” effect.  Obama loves alternative energy, so in the long term you want to stick with bigger names that have contracts for future revenue, stuff like SPWRA, FSLR, ENER.  There should be some great opportunities to fade the smaller plays like YGE, SOL, CSIQ.

2)  Precious metals:  there are two raging gold markets.  First, there is gold … have you seen all those “cash-for-gold” commercials?  I think this rally has no real legs, but is more of a play on inflation safe-haven.  These safe-haven stuff always reverse, but take a long time to do so.  I’m pretty sure we will see some big haircuts in the sector, so short them; or if you have a nice average cost, then the proper move will be to buy the dip until we start heading back under the 200MA.  Yep, gold is one of the few bright sectors that is trending above all important moving averages.  Still yet, the quick day-trades will be found in shorting small caps on reversals, stuff like SLW, FRG.  Oh yeah, and the other gold that has yet to reach its high… purple and gold baby!  Go Lakers!!

One last tiny note about foreign markets…

China has been secretly rallying under the radar.  Remember the 2-fortune cookies?  One thing I noticed is that America’s stock market is following China’s path, in a macro sense.  China stocks had explosive growth, then followed with a major decline, followed by consolidation, and have since rallied.  Our stock market has done the same, but the recovery part is happening too fast in my opinion (which is told in the VIX moving from 80s to 20s in a very very very very very short period of time).  In that sense, I think China’s market is more healthier than ours.  Not saying that they have a better economy, it’s just they’re taking a better path so far.  Anyway, pick any stocks that sound Chinese and play them either way.  Volume, aka institutional money, is starting to resurface so I am slowly getting away from watching tech and banks, and instead keeping an eye on these Chinese lotto tickets.