Caution!

Bernanke isn't going to save us tomorrow. I thought it was a bit unfair to pin the rally this week on what he has say tomorrow.

Steve Jobs, i never owned Apple stock, and i don't own many Apple products but i will miss the man. America will miss the man, if he doesn't represent capitalism i don't know who does.

Here is my current portfolio.

50% cash, 15% short, 5% commodities.

Buy some cheap Apple puts. Apple is finding support right now, but the market will look for any excuse to hit it hard. If Bernanke disappoints tomorrow, look for the market to take it out on Apple.

Either short Apple through puts or through some inverse technology ETF's.

Take a look at TYP.

Ways to make cash at home right now.

Here are some ways you can either make, or save some money.

First we have Bitcoin.

What are Bitcoins?
Bitcoins are one of the first attempts to create a decentralized real-world currency with no governments, no central banks, and no rules.

If you generate bitcoins you can sell them or trade them for goods and services. Bitcoin is an ingenious way to create a virtual currency that is used for sale and barter.
It is an electronic international currency that is gaining in popularity every day.

The way it works is you use your PC to generate bitcoins, it uses computer horsepower to generate a virtual coin that others will buy from you. It's ingenious in its simplicity and a unique way to make some cash on the side.

go here for more info.
http://www.bitcoin.org/

Next:
If you spend over 1500 on groceries every year (who doesn't!) you can get 6% cash back at the grocery store using Blue Cash from AMERICAN EXPRESS.
http://bluecashcards.americanexpress.com/home/#/

There is a 75 annual fee, but its worth it if you spend 1500 a year in groceries. Most families spend thousands a year with food inflation being what it is.

The Blue Cash Preferred Credit Card - American Express, apply today.
This card can help you stay on budget with grocery shopping.











Last, here is an ingenious way to hedge inflation. Most investors know about TIP's to hedge against inflation but this doesn't include oil and food inflation. To do that you can actually invest in commodities ETF's in order to lock in your price of food and gas at a certain price point.

Take a look at UGA for gasoline, and DBA as a hedge for food inflation.
There are a few ways to play these. You can total your costs for the year and buy options or the ETF itself for a years worth of food and fuel. You could go out furhter by purchasing two or three years of costs as well.

I don't know if now is the time to put this hedge on, of course (if) when gas at the pump drops to the 2 dollar a gallon range that might be an ideal time to purchase a few years worth of fuel at the time at that price. If gasoline does go down after you do put this hedge on, it should cause too much of a concern. How long do you believe it will stay down before it rises again?
Just remember this isn't like a traditional investment, it’s a hedge tied directly to your expenses.
That means you shouldn’t worry (too much) if it goes down because you will save that same amount as you go to the pump, and if it rises you may not want to sell it for a quick gain as it may rise even more in coming years.

These aren’t get rich quick investment- they are just a few ways to save some money.

Quick recap.

Markets slipped almost 20% at their worst yesterday. Interesting that they bounced back today, 20% is usually the metric which defines a bear market. I guess we can all collectively catch our breaths, it isn't officially a bear market because we rallied 1% off the lows. Are you buying it. good, neither am i.

Bought another 10% yesterday and sold 30% of what is left of my short position.

My long short portfolio survived with a decent gain. Because of triple short ETF's and out of the money puts that went into the money to hedge my larger short positions.

As far as today goes, I'm not so sure we have seen the bottom or capitulation; I haven't bought anything today except some puts.

I did go ETF shopping yesterday, one of my favorite things to do on market plunges is to purchase big yield at panicked prices.

As i mentioned earlier, one of the best moves you can make is to re-balance when the market crashes. Sell your losers and trade up to better stocks that have fallen in line with the general market.

My current portfolio consists of 60% in cash, and 10% remains short.

I'm not ready to go all in yet, you shouldn't either.

Chicken little!

Time to go long, that's right LONG.

If you are following my moves, you should either be 100% in cash, or in a 70/30 long short position. Time to sell some more shorts, not all, but time to go long on some ETF's.

At the moment I like commodities, but i don't want to play them straight. Instead, i going long on (UYM) its been hammered in the last week. Its largest holding is FREEPORT-MCMORAN. I've also gone long on (FAS) Daily Financial Bull 3x Shares. This fund is down 20% in the last few days.

UYM- ProShares (200%) the daily performance of the Dow Jones U.S. Basic Materials Index.

Just a friendly reminder- ONLY reinvest 20;. Sell another 20% of your short positions as well. Keep some inverse ETF's on the table and some short term puts on the averages just in case fear really overtakes the market.

Rebalance when the market sinks.

One silver lining in a crap market is when everything is on sale; you can swap your underperformers for better quality stocks that have fallen with the markets.

One big mistake most make is they become paralyzed by fear- don’t be. Trading that stinker in for something new when everything is down is one of the best moves you can make in a bad bear market.

If you own a retail stock that just reported poorly and you took the pain in a bull market, trade it out and buy a retail ETF that has crashed with the market in general.

Some of the best moves I ever did was selling individual stocks and exchanging them for ETF’s in the same sector when the markets tank. With the ETF’s you get built in diversification to a basket of stocks. If that isn’t enough, some ETF’s distribute dividends; this is a nice bonus if the stock you sold for the ETF doesn’t.

Sold some of my short ETF positions today.

This market won't go straight down, so it's a good move to take something off of the table. If you hedge with puts and levered inverse ETF's definitely sell some when you get a day like this- these instruments do very well with high volatility but if the market decides to rally they will get crushed. If you purchased puts that expire in less than 30 days its a good idea to roll them up and out to an expiration further in the future. For example if you had the DIA 118 put (expires in 18 days) you may want to sell it for 2.30 and roll it to a DIA 100 strike that expires in 46 for .30 cents. This accomplishes a few things, you cash out a nice amount of change and you still have some protection for a much long time period. Remember the DIA 100 put doesn't need to go in the money for it to rise substantially in value.

There was one thing holding the Market in place last week, the prospect (hope) of a good deal getting done, instead, we got bupkis. In truth, there really wasn't a good deal to be had, there was no mention on jobs nor stimulus, all we learned was that things were worse off than we imagined, and that message above all others was the one we all took from Washington.

What not? Sell some shorts, but don't sell them all. I wouldn't go all in this market, but if you must go long, try to do it incrementally. Selling a put to enter a position while volatility is a decent strategy, but i would make it a vertical put spread- that means go long an OTM put (one transaction) just in case that stock continues to tank.

If you’re long this market- why?

What are the upside catalysts?

Maybe the better question is: what are the catalysts to the downside?

These new cuts will guarantee government layoffs and that was one of the few bright spots for jobs.

While the government sheds jobs and programs unemployment benefits wind down as well. This one, two punch will affect consumer spending, it can only go down.

Maybe even worse is that overall consumer sentiment is shot, the pessimism is so thick in the nation, it is palpable. Consumer spending is going to go into the toilet.

One could argue we needed more stimulus and an extension of benefits for those out of work, in order to increase tax revenues, you need to spend money to make money, and that is the most frustrating aspect of the entire debate. While all of this is going on we can’t forget about the mess in the euro zone and the potential for a credit downgrade in the US.

Market optimists will say that it’s all baked in, that the debt ceiling debate is over, and that this plan is better than no plan. I disagree on all of these points, I see huge downside and minimum upside- is anyone expecting the DOW to reach all time highs in this environment?

With all that said; I see one positive, just one.

Inflation adjusted, the indices are in the toilet and they haven’t moved in ten years. DOW 11k today and DOW 11k in 2000 is not equivalent if you look at the price of oil, gold, or almost any other commodity in that same 11 year span, for Pete's sake, look at what the dollar was worth in 2000 compared to today!

President Milquetoast or Milhouse if you prefer.

President Obama and the great compromise.

If this doesn't say it all- what does?

This man is a disaster in so many ways that it defies comprehension.

I hate HATE to diss and dismiss the democratic preisdent of the United States but i've run out of excuses.

The markets will continue to tank, and i don't see what will get this funk that envelops the nation to fade away.

Did anyone happen to catch "Meet the press" yesterday July 31st?

They eviscerated the president. Even though they are supposed to be bipartisan and neutral, there was a severe beat-down of Obama on all things and no one there to defend him at all.

Gregory poured gas on the fire. Is Gregory he a right winger? To top it off Tom Brokaw, Tom freaking Brokaw was totally spewing tea party talking points!

As McCain said- This is bizarro world.