Weekend Update

The Dow squeaked by with another weekly gain, but most market commentators are thinking that this next week could be the time for a roll-over. Typically when everyone talks like that, we will most likely continue to slide higher. If we get a big breakdown, then okay, that's when it's time to short. But until then, all of this chatter is nothing but chatter. You make and lose money on price action and what does happen, not what you can say will happen.

Nat gas continued its plummet down further on Friday. The HNU.TO tracker that we have been following of late closed down under 2.50. I'm still seeing no conviction to buy until we get some positive movement on higher than average volume. The oil/nat gas arb trade continues to look ripe. Dividing the price of oil by the price of nat gas gives us the number 24. Historically, this number is right around 8. We are really out of whack right now, and I'm willing to take a hack. Short oil and long nat gas at a good price is worth it here if you are willing to hold for more than a trade.

While we are talking about some long-term plays, I also like True Religion as an apparel name. They are relatively cheap with a 12 P/E compared to the rest of the industry trading with around an 18 P/E. Going into the winter months, I think these jeans will be the hot thing. The problem with this trade is that the market whole market could turn sour in the coming months. To hedge against this, I'd sell another retailer while going long TRLG. The technical name for this is called a "pair-trade." Short LULU here and long TRLG going into the winter.

For one other trade for the upcoming week, I'd watch DRJ. They had some positive news out awhile back and that is what caused this latest spike. For some reason, I do not think the news is worth a quintupling of the stock price. Plain and simple, it's over done, and let's look to short on some negativity this week. Green to red, boom, down she'll go. Alright, to cap off the weekend, here's a music video to boot:

MK