- The market’s roller coaster ride continues
- How to turn volatility to your advantage
- The latest economic numbers and what they mean
- Is $25 oil next? Plus, million-dollar parking spaces… cab hotels… reader mail… and more!
How’s your stomach feeling these days?
By 11:15 yesterday morning, the Dow Jones industrial average spiked more than 400 points above Monday’s finish.
But around 3:00 in the afternoon, someone came along and pulled the darn rug out again. The thing coughed up another 502 points in about an hour to finish 204 points down on the day.
This after Monday’s equilibrium-wrecking Six Flags ride that opened the day 1,000 points lower made good on all but 150 of those points later on and then puked up an additional 400 or so to finish the day 588 points in the red.
Hence our opening question. (We’ve found Dramamine particularly effective for motion sickness.)
So the Chicago Board Options Exchange Volatility Index, call sign “VIX,” has been living it up this past week.
The VIX more than doubled over the past week, soaring 118%, according to the folks at Crain’s. And no wonder — with the Dow down a thousand here, up a few hundred there, down several hundred again over there. If this be investing, most folks would rather stuff their money in the mattress. Who has the stomach for it?
Some people, apparently. A whole bunch of traders wagered on a robust snapback rally following Monday’s opening swoon.
During Monday’s sell-off, these cats jumped into a reverse index fund that “shorts” volatility. When volatility goes down, this fund goes up. And the other way around.
It’s a strategy some traders use to recoup any short-term losses. What they lose when the market drops they try to recover when the market bounces back and volatility slackens.
About $345 million flooded into the VelocityShares Daily Inverse VIX Short-Term ETN (XIV) on Monday, according to Barron’s. It was a roll of the dice that’s paid off in recent years, as the market’s always snapped right back to attention during this bull market fed by the Fed. But this time?
Snake eyes.
The elastic in the slingshot must have been worn. After yesterday’s initial surge that catapulted the Dow several hundred points higher, the snapback rally fizzled against the strongest wishes of the “shorters.” After a Monday afternoon high above $34, the XIV was down below $26 yesterday afternoon.
Better luck next time, fellas.
This is a drum we’ve been beating this week, since this wild volatility is presenting a special opportunity for alert investors.
Our income guru, Zach Scheidt, has identified the perfect way to make hay from this extreme volatility. It’s part of his “perpetual income strategy.” The more volatility, the more lucrative this strategy. And that volatility is making Zach’s readers a lot of money these days.
As Zach tells his readers, “You gotta make hay while the sun shines!”
And as Dave explained yesterday, even a small spike in the VIX during July profited Zach’s readers. They could have collected $3,166 in instant income payments last month alone. And with volatility being so, well, volatile right now, God only knows how they’ll do this month into next. Nor would we count on this volatility ending anytime soon.
So we’re whistling hard to bring this opportunity to your attention.
And we’ve got a video that breaks it all down for you. You can watch it right here. But the clock is ticking. Sorry to say, but this opportunity ends once the clock strikes 12 Thursday night. That’s tomorrow.
To the markets…
A lot of green today as the slingshot takes another crack — the Dow’s up an even 225 at writing. The S&P’s up 29, and the Nasdaq’s up 89.
Adding a bit of elastic to today’s rebound? An unexpected rise in domestic orders for durable goods.
“Durable goods orders in July rose 2%, while ‘core’ orders — which excludes military orders and more volatile things like planes — rose 2.2%,” according to Business Insider.
It continues, “Expectations were for the report to show that orders fell 0.4% month on month in July after a 3.4% uptick in June.”
See, the news isn’t all bad.
Meanwhile, the green in the equities markets switches to red in the commodities markets. Oil’s off a shade at $39.12. Can’t seem to crack that $40 mark right now.
The Midas metal’s slipped $13, to $1,124. Silver’s down a smidge, to $14 in change.
More good news?
The Philly Fed has released its latest “state coincident index” numbers for July. That’s a little-known but trustworthy recession indicator that tracks economic activity across all 50 states.
Generally speaking, readings below 50 trigger recession warnings. July’s number? 78. And over the previous three months? A rip-roaring, recession-crushing 84.
By way of comparison, it was minus 100 in February 2009, during the depths of the financial crisis. Its previous low was minus 70 in October ’01.
The latest Philly Fed numbers were reinforced by that latest report by the Chicago Fed, which also turned in favorable July economic numbers.
Let the good times roll…
We mentioned a minute ago that oil’s lost purchase of the $40 mark.
But it might even break the $30 mark, according to one Russian expert.
Vladislav Zhukovsky, an economist in the employ of a firm called Rikom Group, recently predicted that global oil prices will tumble down to $25 per barrel!
And you thought $40 was low…
According to our natural resources maven Byron King, this is a guy you should listen to.
Per Byron, one former CIA analyst claims that Zhukovsky is “known… for turning out to be right.” And if he’s right this time, it’ll be rough sledding for energy investors for the rest of 2015 into 2016.
Zhukovsky blames the Arabs, according to Byron:
“Low oil prices are the result of an Arab effort — Saudi Arabia especially, with other Arab nations climbing onboard the bandwagon — to drive down oil prices and economically challenge the “latest technological innovations in extraction technology.” In other words, low-cost Arab oil challenges the underlying economics of U.S./Canadian fracking, as well as Canadian oil sands extraction.”
The Russkies have blamed a U.S.-Saudi conspiracy to drive down oil prices and, thus, Russian oil profits. Oil is a major Russian export. Cut into those profits and Russia hurts. But this guy says no. It’s all an attempt by the Arabs to strangle frackers in their cribs.
And it’s working.
“In the U.S. and Canada, we’ve already experienced massive contraction across the oil patch. Close to home, over 1,000 formerly active onshore drilling rigs are stacked up across the North American oil patch, such as these units in Dickinson, North Dakota,” says Byron.
But according to the old economic wheeze, the cure for low prices… is low prices. Production drops from low prices lead to shortages eventually, which drives up prices again, which in turn increases production.
But it could be a long time before you see $100 oil again.
We knew this was coming…
The Wall Street Journal reports that parking prices in cities such as New York, San Francisco and Boston are at all-time highs. Now comes the word that at least two new developments in Manhattan are asking a million big ones for a single parking space.
“Condominium developers are touting parking spaces with glossy brochures and promotional videos, marketing the small patches of concrete as luxury amenities,” reports the Journal.
So for about four times the cost of an average single-family home, a parking space in SoHo can be yours. A parking space — the new American dream?
But if you’ve got a budget and still want to claim a parking space in New York, why not just sleep in a taxi?
Because you can. For just $39 a night.
It costs a lot less than a night at the Plaza.
A new venture offers budget travelers the chance to sleep overnight in a taxi, van or camper parked on a New York City street for 39 bucks.
“Each of the vehicles has been converted to accommodate a large bed, a fan and not much else,” according to the International Business Times. Sorry, no bathroom. They’re parked in Queens, just across the East River from Manhattan.
Says Jonathan Powley, creative genius behind the idea:
“I think it’s just an adventure. No one has ever done it before. It’s different. It’s safe. You have a view of beautiful Manhattan right here. And it’s convenient. You are only one stop from Grand Central Station. You are only three stops from Times Square, less than 10 minutes. And I think the people that do it are just the type that want to try something different. It’s really fun. It’s really comfortable. And not many people can say that they purposely slept in a taxi.”
Purposely, probably not. We suspect those who’ve done it unpurposely might not find the idea so hot.
Posing a similar question to many other readers, one reader asks the following…
“Re: Zach’s loophole in today’s 5 Min. Forecast. What account size is he assuming for folks to make $3,166 in July or even the $1,000-a-month target? Are we looking at selling one contract or 10? Put another way, do I need a $10,000 account or a $100,000 account in order make that return?”
The 5: Yes, those figures are based on a trading account of a certain size. It’s not as if you can generate $3,166 a month with a $100 account. But still, we think it’s a darn good return, especially when you can do it every month. And it’s within the reach of many investors.
“It’s not a big lie,” begins another reader, followed by the inevitable “but.”
“But I wish you would be completely upfront and tell your followers (clients) that you need at least $100,000 cash to fully take advantage of advertised projected monthly income. At least you would get some points for honesty and separate yourselves from the politicians.“
The 5: You don’t need that much. But to separate ourselves from the politicians? Why on Earth would we want to do that?
Best regards,
Brian Maher
The 5 Min. Forecast
P.S. We’ve been warning you all week that the special offer we’ve been discussing will soon expire.
And yes, this may be your LAST chance, because this page goes away tomorrow night at midnight, as mentioned.
The truth is this is the easiest way in the world for you to make an extra $1,000 per month — bare minimum.
In fact, we’re so confident that you can make — at least — $1,000 per month if you follow the strategy outlined on this page… that… our publisher was prompted to guarantee it.
But you have to hurry.
After midnight tomorrow, as far as we know, it’s GONE for good!
If you’re at all interested, you need to click here to discover a way to make a minimum of $1,000 per month — guaranteed — before it’s too late.