I would rather be lucky than good any day. Today is a good, no, a great day so far. The European markets are down, the Euro is down, US Treasuries are down, and the US equity markets are up. I am short European stocks, short the Euro, short Treasuries, and long US stocks. I am hitting on all cylinders today.

Obviously, I do not get this lucky every day. However, my logic is sound and my economic assessment good. Even though I am currently bullish on US stocks, if all the markets go down in the short term, European stocks will act as hedge against the US stocks. In fact, they will probably go down more and we will make money.

If all the markets go up, I believe the US stocks will go up more as the financial and economic data is much better in the US. Therefore, I believe the portfolio will still go up, just not as much. However, it is significantly less risky as being 100% long in stocks.

What I actually anticipate, is for Europe to be in more trouble, and the US to continue to recover in the midterm. In the short term, it is so volatile right now, it is anybody's guess. Short term traders, both day/momentum and swing traders are having a very difficult go of it. Position traders may be having better luck, but at the expense of severe ulcers.

Today, in these volatile markets, you need sound fundamental analysis, not so much of individual companies, but the countries and regional economies of the world. The way I am playing it for my clients reduces their volatility and ulcers, and give them the potential for nice returns, especially on a risk adjusted basis. If I am partially right, I believe we will make decent money. If I am mostly right, we will make lots of money. More importantly, you can sleep at night.

One last thing, the iShares Silver Trust (SLV) looks very interesting. I have included a chart for you to learn about. Tomorrow, I will include a broad based S&P chart for you to continue educating yourself. Keep studying.

Dan Stewart CFA®