Contrarian Ideas Updated

There have been significant changes in the status of the contrarian ideas for this summer that I've written about and of which I've updated.

The contrarian areas suggested were: (1) shorting gold; (2) buying corporate bonds; (3) shorting financials; (4) shorting municipal bonds; (5) selling oil; (6) buying health care stocks; (7) shorting real estate; (8) buying the dollar; (9) buying the Nasdaq 100 and selling the S&P 500 (a hedged position); and (10) buying Treasuries or selling Treasuries, a you pick 'em choice.

Short Gold

The three-month daily price chart is shown below for ProShares UltraShort Gold(GLL).

ProShares UltraShort Gold (GLL) Source: Stockcharts.com

This position has changed little since the June 20 update. GLL closed at $15.32 on Tuesday for a gain of 5.66% since opening the position at $14.50 on June 5. Stop loss is still maintained at $14.50 and will be raised to a trailing stop of $1 if GLL closes above $16.

Buy Corporate Bonds

I used the iShares iBoxx $ Investment Grade Corporate Bond (LQD) exchange-traded fund for this investment. The entry point date was May 26. This position has continued to advance in a very well-defined channel. See the daily price chart below.

iShares iBoxx $ Investment Grade Corporate Bond (LQD) Source: Stockcharts.com

The gain in this position, as of Tuesday, is 4.87%, including dividends. I am now placing a $2 trailing stop loss on LQD.

Short Financials

I bought Proshares UltraShort Financials (SKF) on May 26. At the close on Tuesday, the position has a loss of 1.38%. We can see in the daily chart below that SKF has declined close to the previous dip at the end of June. I have raised the stop loss on this position to $40.50, just below the previous intraday minimum of $40.92 on June 30. If this dip goes to a lower low, I want out. The recent doji candlesticks (June 9, 10 and 14) indicate indecision in the market, although the June 14 has a long upper tail, like a hanging man, which can be bearish.

ProShares UltraShort Financials (SKF) Source: Stockcharts.com