Hello Traders,

The Treasury Markets continue to sell off.  The 10 year is at 2.28% and the 30 year is at 3.03%.  This move has been significant and should be somewhat of a question mark on what the markets are going to do. So, if you look at it from an interest rate point of view there are going to be some great opportunities going forward for the asset gathering companies of the world.  Assets meaning cash.  So, many of the banks should get a boost so far this quarter on the amount of money they are going to make.  The other side of this is it is going to get more expensive to borrow and buy homes and cars with higher interests rates. Ok, so I am starting to ramble on and I don’t intend to. I have moved into a more neutral position in my portfolio because the fact that as bonds went up last year the market did also. If the correlation continues then there is a high chance that we could see a downward test in the market. I did not say with this statement that I not taking advantage of opportunities.  There are opportunities out there and we need to continue to put our money to work smartly.

Ok, I normally don’t do this (market prediction of sorts), but this could be some transitional point in the market also. With bonds selling off you could question where is the money going? Is is all going overseas, or is it going to go into new areas of the market and push the markets to new highs. This would be contrary to the position that I just put on with volatility, but that is why I controlled the size a little. I do think there is a conundrum out there, but where is it and what direction? So, as you see me put on new trades you will see the goal of  keeping diversified and using uncorrelated positions to get exposure to different markets. I will use my portfolio in Option Coach as an example. I have a mostly long position in IWM (small caps), a long position in VMW (Tech Cloud Play), Short position in SPY (Big Cap), Long in a retail (ULTA), Long overall in TBT/TMV (Short Bonds), and long VXX (Long Volatility), and over 50% of my account in Cash.

Lastly, I am working on some new features for subscribers to my site/newsletters/action alerts.  If you are free member of the Scout Team you are starting to get my daily email called the Daily Prep, and the action alerts for trades that I am entering. The goal is to show you my trades in a more real-time rate. My goal is to be more transparent to all the people who follow me and for everyone to understand that these are real trades that are being executed. I look forward to continuing to improve the service, but remember my bottom line goal is to trade and show you how I am doing it. I am not a financial advisor, I am a retail investor, and I am not providing anyone with investment advice. I do want you to learn as much as possible from me, as well as the feedback from clients on the site to teach me and back me up. Several people are already using Twitter, email and this site to communicate. I really appreciate it and look forward to the continued service and continuing to try to improve the process.

Happy Trading,

Option Coach.