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Idan
My Target for GLD remains around 155.6-116 in the short term, I believe we could see a nice correction once we hit around those levels… That’s where my fib projections take me.
Dow Jones Daily: I said i would play the megaphone formation… well here we go… I bought DXD at 30.32 today.
Woo:
1 month chart update of SPX:
So after hitting the 1088 fib, we bounced and stayed above the 1090 cluster of fibs as expected. The 1090 area was a good area to buy calls. The 1096 area was the initial top to look for and it hit on the dot as the first area of resistance. There are two fibs in this area, and there’s still a chance we could drop. I wouldn’t be surprised if the 1080 area were to hit, so it was wise to get out of at least half the position of SPY calls going into EOD at the 1096 level. This way you lock in profits and if the market heads higher you have a good position on those calls, and if the market heads lower, your losses are hedged by the profits made, and the profit position going into closing. It is always dangerous to hold options overnight during opex week because decay will hit options even if they are next month, much more than they would at other times of the month.
Ideally for a call position you want to see a rise into open to the 1105 level where you’ll hit the first trend line resistance, but the market may go horizontal for another day to decay options. This can hurt both bear and bull and leave the market in limbo for another day into the weekend. On the longer term charts the market can still drop a good amount more without losing the bullish bias. We’ve had a 3 wave movement down so far to the 1088 lows with the 2 of 3 being a flat correction. The big question is whether this 3 wave will finish, or it will go down and complete a 5th wave south. I have a feeling if we do head south, we’ll stop at 1085, and that is an area where I would consider grabbing a nice experimental call position for a potential 5 of 5 wave finish and then a rise up. This would create some problems though and mean there could be more dropping after the bounce there, so I’m leaning more towards heading higher into tomorrow or going horizontal. If you have a call position going into tomorrow the 1090 area is the key place to watch. A drop below 1093 technically will be the first short term bear sign, and you may actually want to have stops below 1092.9 (maybe 1092 or so if you want to lock in profits). If 1090 breaks, 1088 break would be further confirmation of a bigger fall to come, once that fib breaks that could mean that even though we may bounce one day or so, most likely a bit more downside is to come.
out of my TNA 35.40. Don’t like holding anything over the weekend.. Have a nice weekend all..
I bought some MSFT JAN 30 Puts for $1.24 against my long position in the stock.
Anyone holding anything into the weekend?
Market wants to park at the most ambiguous close.
The Dollar Index forms a symmetrical triangle on the 5 min, usually a continuation pattern.
November 20th, 2009 at 4:08 pm
Never mind, DXY started dropping as soon as the market closed. LOL
November 20th, 2009 at 6:47 pm
I have discovered that when the major indexes on an OPEX day end around where they started which is about half the time, just pretend the day was a holiday and use the signal from the previous day as the one for Monday. I would say your sell signals are still quite valid.
November 20th, 2009 at 9:45 pm
I cannot ignore any day’s data as my analysis is based primarily on the daily charts. The only reason I said the market wants to close at the most ambiguous place is because it should close there to confuse all analysts. Given that today was opex, I never expected anything major anyways. Monday will be very telling, and let’s see how long the Dollar can continue to show positive divergence and not stage a major rally. The carry trade is the mother of all bubbles. I will do some research on Japanese Yen and Nikkei to see what happened to Nikkei/Yen after 1990.
I am still expecting red bars into December 1st.
It was a mediocre trading week for me. I’m feeling a bit burned out right now. I may take Monday off to regroup. Anyway, here are the shorter term trades that I opened or closed this week.
11/12 – bought 1000 UCO @ 13.12
11/13 – bought 1000 UCO @ 12.88
11/16 – sold 2000 UCO @ 13.60 (+4.62%, +1200)
11/16 – bought 1000 SCO @ 12.87
11/17 – sold 1000 SCO @ 13.02 (+1.17%, +150)
11/13 – bought 500 FAZ @ 20.00
11/16 – bought 500 FAZ @ 18.80
11/18 – sold 1000 FAZ @ 18.80 (-3.09%, -600)
11/17 – bought 1000 SCO @ 12.72
11/18 – bought 1000 SCO @ 12.58
11/19 – sold 2000 SCO @ 13.15 (+3.95%, +1000)
I should have been more patient with the FAZ position. Here are the shorter term trades that are still open. I’m holding all of them over the weekend.
FAS: I bought 200 shares yesterday @ 76.00. I’m down $210.00 on the trade as of the close today.
UCO: I bought 1000 shares yesterday @ 13.30 and another 1000 shares today @ 13.00. I’m up $60.00 as of the close today.
ERX: I bought 300 shares yesterday @ 44.00. I’m down $1548.00 as of the close today but I’ll receive the distribution of $1394.70 so I’m really only down $153.30 on the trade.
Have a good one!
November 20th, 2009 at 6:57 pm
best thing you can do is take a day or two off.
helps and clears the head.
November 20th, 2009 at 10:39 pm
Props on the UCO/SCO .
It looks pretty hard to trade.
Thats probably because I focus on stocks like FNM
http://finance.yahoo.com/echarts?s=FNM#chart1:symbol=fnm;range=1d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
lol
Good weekend all
and a good boxing fight saturday
the great danish WBA champ Mikkel Kessler Vs André Ward in super Six
The vertical FAZ put spread I sold ended 1c in the money. I hope it is exercised and somebody puts 1000 FAZ shares to me over the weekend, because I think Monday orTuesday will be a big down day. The bad thing is, for sake of balance I can’t buy FAZ AH because I don’t know whether the options will be exercised or not. If bad things happen over the weekend, somehow I have a feeling those FAZ shares will not be in my account, but if there is good news over the weekend, they will be.
The daily chart is working out great for the SPY:
http://social.stocktock.com/photo/photo/show?id=2348194%3APhoto%3A37641
This calls for a move higher Monday. Have a great weekend,
100% chance we get back to 1100 on S+P.
I’m only looking to enter shorts next week if we reach 1100. No longs for at least 2 weeks.
My shortterm short portfolio will consist mostly of UUP, some SDS, Spy Puts and Spy Shorts.
Shorts will be covered on December 1st or if the S&P passes 1130.
I mentioned that I would post about my UCO/SCO trading method (if one could even call it that) so here it is. Pull up a chart of USO that runs from the beginning of July until now. Notice that oil entered an oscillatory pattern in early August that had some pretty big swings along with smaller oscillations within those larger swings.
The development of this kind of pattern along with access to a levered pair of ETFs like UCO and SCO is a short term trading dream. The more active traders can trade all the smaller oscillations while the less active traders can focus on the bigger swings.
However, there are two main problems with pattern trading. One issue is that while it is pretty easy to find yourself on the right side of any given trade, it is difficult to use the pattern to get the best entry and exit points since the crests and troughs occur at different price points on each cycle. This is why you see me averaging into many of my trades. Also, this is why I have trouble giving responses when people ask me for my targets. Anyone who has followed my trades knows that there is almost always a better entry for you after I post my entry and there is almost always a better exit for you after I post my exit so you should probably ignore me when I do give targets.
The other issue is recognizing when the pattern is breaking down. For example, look at the USO chart on October 7th. It looked like oil would be heading back down if the pattern was going to continue so I took a position in SCO. Unfortunately, it broke out to the upside and I averaged down (a strategy that had been working beautifully up to that point). This was stupid because I should have been more and more cautious with the trades as the pattern grew longer in the tooth; poor discipline and focus on my part.
So, the pattern was done. Although I took a big loss on the pattern breakout trade, I believe that I was 10 for 11 at that point on UCO/SCO trades since early August with a total profit of around 23k (my spreadsheet that has the information is on my computer at work). Someone who trades more actively than me could have done way more than 11 trades during that time period with a very high rate of success.
Anyway, once I felt that oil was topping (see October 22nd on the USO chart), I got back into SCO and started looking for the development of another oscillatory pattern. You can see that we did begin a new pattern at that point with a more narrow range than before and faster oscillations. I’ve been playing this new pattern with smaller positions and quicker moves in and out of UCO/SCO.
Of course, this pattern will eventually break down. Will a new oscillatory pattern emerge after that? There is no way to know. I certainly hope that it will since this has been one of the most reliable trades that I have ever encountered. I hope this post has been helpful and that the posted trades since August have helped you make some money in this crazy market.
Have a great weekend!
November 21st, 2009 at 2:44 pm
Here are the UCO/SCO trades that I have done since the failed trade on the breakout. You can use the USO chart to see how these trades followed the pattern I was seeing there. If you look at the trades (and the UCO/SCO charts) closely, you will see that I am not great at getting the best entry and exit points (although I do get lucky every now and then). However, I was on the right side of the trade every time. I hope this information helps.
10/16 – bought 2000 SCO @ 13.35
10/19 – bought 2000 SCO @ 12.95
10/28 – sold 4000 SCO @ 13.60 (+3.42%, +$1800.00)
10/28 – bought 1000 UCO @ 13.50
10/29 – sold 1000 UCO @ 14.10 (+4.44%, +$600.00)
10/29 – bought 1000 SCO @ 12.75
10/30 – sold 1000 SCO @ 13.60 (+6.67%, +$850.00)
11/06 – bought 1000 UCO @ 13.20
11/09 – sold 1000 UCO @ 14.20 (+7.58%, +1000)
11/09 – bought 1000 SCO @ 12.70
11/10 – sold 1000 SCO @ 13.20 (+3.94%, +500)
11/12 – bought 1000 UCO @ 13.12
11/13 – bought 1000 UCO @ 12.88
11/16 – sold 2000 UCO @ 13.60 (+4.62%, +1200)
11/16 – bought 1000 SCO @ 12.87
11/17 – sold 1000 SCO @ 13.02 (+1.17%, +150)
11/17 – bought 1000 SCO @ 12.72
11/18 – bought 1000 SCO @ 12.58
11/19 – sold 2000 SCO @ 13.15 (+3.95%, +1000)
11/19 – bought 1000 UCO @ 13.30
11/20 – bought 1000 UCO @ 13.00
(still open)
Myth: “Historically the market never tanked during the month of December.”
Fact: In December 1930, the DOW closed down 9.03% from its November 1930 close. In December 1931, the DOW closed down 17.01% from its November 1931 close. In December 2002, the DOW closed down 6.23% from its November 2002 close.
This doesn’t mean that the market will tank this December, but I just wish to let people know that there were instances in which the market did tank in December.
Since 1929 and up to 2008, there had been 35 Decembers in which the DOW gained 2% or more, and only 8 Decembers in which the DOW lost 2% or more. During the same time frame, 10 Decembers had a gain of 5% or better, and 3 Decembers (refer to the above) had a loss of 5% or more. One December (1991) had a gain better than 8% (it was 9.47%), and two Decembers (refer to the above) had a loss worse than 8%.
2009 is also one of the only two times where the November close may be up more than 40% from its February close; the other instance is 1933.
As for the Black Friday market myth (market is usually positive during the week of Black Friday), DJIA records going back to 1929 showed no statistically significant bias toward either the bulls or the bears.
No one really knows where the market is headed. Most traders/investors expect to see a Santa Rally this year, and while the historical data supports this (and I certainly will not ignore the significance), it makes me think that we might actually have a Christmas Crash. This is the reason why I will close all of my swing positions on December 1 and not trade again until January 2010. I will, however, carry over all of my hedged long term short positions.
November 21st, 2009 at 12:46 pm
Hi Fritz.
I was very curious about the historical facts mtself and was about to do my own research on it.
But now I see you have saved me alot of work and have done a more thorough job than I would have done.
Thanks for sharing.
I agree that the shorting of gold was a risky play. I don’t have much experience trading gold and I normally try to stick to things that I know (I almost always lose when I step away from what works for me). However, I have a friend who has done very well trading gold and treasuries and he convinced me that this was a good spot for a correction (although he did not specify a time frame for the correction). I will probably hedge the DZZ position (which is less than 9% of my portfolio) soon with some GDX and/or GDXJ.
GGG, what are your ideas on gold (both in the shorter and longer terms)? Any and all advice is appreciated!
November 22nd, 2009 at 7:45 pm
Certainly gold looks ripe for a correction, but bull markets always look ripe for a correction, but seldom give them. As you have seen lately, gold is not just rising from the falling dollar anymore, it is now also rising from global buying and demand, and rising in other currencies.
A very large inverse head and shoulders pattern, almost 2 years in the making, and breaking out at 1024 or so, is a very powerful pattern, so technically gold can easily reach 1250 to 1300 or so VERY easily, possibly without any correction at all. Emotions and other numerous circumstances can send it much, much, higher.
What if many more contract holders demand physical delivery, and much of the gold contracts have actually been sold naked? Yeah it’s supposedly illegal, but since when has that mattered? You know ABX seems to be in a mad rush raising funds to cover their gold hedges, those very large hedges that have helped keep gold prices suppressed for so very long?? Is there really enough physical supply?
What if just a fraction more of the world’s poulation decide that it is wise to hold just 5% of their net worth in gold? There’s not near enough gold. I’ve always said that everyone should hold at least 5 to 12% of their net worth in gold as an insurance policy only. My holdings go MUCH higher than that, but then I am a believer.
I would be very afraid to NOT hold gold, let alone sell it short, but thats me. Morris you do very well for yourself, so I am hardly qualified to give you any advice.
Some morning it’s possible to wake up and see gold has jumped 10, 15, 20 percent or more. Or worst case, if you wake up and find virtually all the world’s available physical gold has been bought up as you slept? DZZ would become totally worthless? Yes you might get the correction you are looking for, but if I were you, I wouldn’t push it very far at all, as alot of folks are looking for the same opp to buy, as you are to buy back your short, IMO.
Gold now at another new record high at 1160.70 USD.
Gold Price Change due to Weakening of US Dollar +1.40
Gold Price Change due to Predominant Buying +7.40
Gold Price: Total Change+8.80
November 22nd, 2009 at 9:28 pm
now 1163.4 World spot price
Paulie M:
Cute ‘jokes’, only if they were true in nature. I am up 55% on a 210,000$ portfolio in 15 days.. that makes me up 110,000$ in November alone..
I have fully documented all my trades on a website + stocktock.com. I’m not sure how I’m ‘living in the basement’ given the fact that I earn a living daytrading at a firm and make sidebets to increase my capital as a sidejob.
Even if the market goes up while I am short, I own long hedges which are up so much that I’m green no matter what happens.
SSS.V +80%, AMD + 70%, DOW +20%, MRK + 20%…
This is hilarious Paulie M, I mean have you actually followed my trades. I try to keep my track record as live as possible…
Do you read what I’m going short with? I’m going short with UUP and the SPY. Therefore the mask risk that I am taking is 3-4%.. That ETF moves $1 in 4 weeks. LMAO. Why is it that every week there’s some random poster who thinks hes better and above everyone else. Paulie M if you think the trend will continue to go higher than buy calls already, and quit talking about my lifestyle.
November 21st, 2009 at 9:57 pm
Don’t bite Paulie’s bait. He’s just talk.
Morris – I trade gold and silver extensively (mainly miners) and am noticing that the GLD momentum is slowing down. Volumes are starting to drop a bit. Also, when gold corrects, it drops 10% + in a few days and you can make good money if you are on the right side of the trade.
The reason many traders are looking at shorting gold is that the dollar has started strengthening and it can squeeze the dollar shorts. This will cause gold to fall. The problem with this logic is that the last few days, dollar has strengthened and GLD has gone up. It is now close to its 52 week high.
Technically, GLD daily trend line is not broken. Also, if it breaks, GLD will have to fall below 1000 to make a lower low (which I doubt will happen). Hence, it will continue to be in a secular bull market for some time.
My personal view is that there is a bubble forming in gold as it is “THE” commodity to own. When we had rice shortages last year, fertilizer stocks exploded higher. When oil demand was strong, oil prices reached ridiculous levels. Now, with the Obama’s trillion dollard deficits and large new programs (like health care), many rich people and governments are getting scared of their dollar holdings and gold is being bought. I still think it has a lot more upside.
A low risk trade would be to wait for the GLD trendline to break and then short it.
November 21st, 2009 at 4:17 pm
Thanks so much for the great post! I need gold to correct about 4.5% from here to break even on my DZZ position (unless I average down again). I think that is certainly possible. We’ll see how it goes. I don’t need the funds for anything else right now so I can afford to be patient on the trade (my initial entry was on the 4th). I have been hesitant to hedge the trade since it seems so crowded on the long side right now.
January 4 1990, Nikkei intraday high at 38951, USD/JPY was around 145, GBP/JPY was around 230, CHF/JPY was around 94.
October 1 1990, Nikkei intraday low at 19782, USD/JPY was around 136, GBP/JPY was around 259, CHF/JPY was around 106.
March 18 1991, Nikkei intraday high at 27270, USD/JPY around 138, GBP/JPY was around 246, CHF/JPY was around 97.
August 19 1992, Nikkei intraday low at 14194, USD/JPY around 120, GBP/JPY around 210, CHF/JPY around 93.
March 30 2000, Nikkei intraday high 20809.79, USD/JPY around 103, GBP/JPY around 163, CHF/JPY around 64.
April 28 2003, Nikkei intraday low 7603.13, USD/JPY around 120, GBP/JPY around 191, CHF/JPY around 88.
July 5 2007, Nikkei intraday high 18295.27, USD/JPY around 122, GBP/JPY around 249, CHF/JPY around 101.
March 9 2009, Nikkei intraday low 7028.49, USD/JPY around 99, GBP/JPY around 137, CHF/JPY around 85.
Today, USD/JPY is 88.88, GBP/JPy is 146.57, CHF/JPy is 87.28
Japan has been in deflation since 1990, and quanitative easing (zero-interest rate) since 1990 as well. Its currency should have been de-valued, but it went againt common sense and in fact is one of the stronger currencies that people will want to hold during times of chaos. Today, Japan is still in deflation. Nikkei never recovered its fall from grace, and today it is trading at 25% of its all time high.
With the US government keeping interest rate at zero and printing unprecedented amount of paper money, it may be different from the Japanese experience. This research is just for interest and not applicable to market analysis.
Many people ask me what I am doing to prepare for possible future civil unrest. My answer is I am stocking food and water, living in remote area, stockpiled some fuel, prepared some seeds to grow my own food, some cash, and some precious metals. During times of civil unrest, fiat currencies become useless as you can’t eat paper money, but you can’t eat gold/silver either. Food and water will help me survive longer than gold/silver ever will. If we’re all destined to vanish, we will vanish regardless of what we do. My hope is that I will be able to help more people with future food shortages, instead of fighting for gold/silver.
Friends at stocktock.com, I will not be posting regularly on this site from now on till the end of this year. I may drop by on weekends, but you are probably not going to see me posting comments everyday. I will spend less time analyzing the market as my priority has to be my family now. My long term view of the market hasn’t changed: January to February 2010 will likely be a repeat of January – February 2009; instead of a March bottom we’ll probably have a July bottom; and best opportunity to buy stocks should be in October 2010. Best of luck trading the rest of November and the month of December.
November 21st, 2009 at 7:48 pm
Thanks, Fritz, for all of your input. Enjoy your family over the holidays, I do look forward to your dropping in here, especially as December’s volatility heats up.
Civil unrest? That is a scary thought, especially how dependent most people are on a food chain where they have absolutely no input or control. Post Katrina New Orleans times a thousand? Yikes. And I always thought it would be The Big One in California (earthquake) that would show our real vulnerabilities as a ‘civilized’ and industrialized society.
FYI I just saw an interesting program on TV yesterday about a wood-gas powered pick-up: Wood when super heated gives off very flammable gas, and in the 40’s, especially in Europe these were used where refined gas was hard to come by.
November 21st, 2009 at 9:00 pm
http://www.motherearthnews.com/Green-Transportation/1981-05-01/Wood-Gas-Truck.aspx
November 21st, 2009 at 9:16 pm
Paulie:
The financial instrument you use, the timing of your trade and the probability of you making a winning trade determines if you succeed in making money going short in this cyclical bull-market.
IMO, The problem with most bears and traders in general is that they want a double in FAZ or they want GE back at $6.. While these traders are bickering about the market being overvalued, they are failing to realize their is money to be made right infront of them. It’s funny how traders on YHOO dream about FAZ going back to $100. Being delusional will get wipe out your account.
BTW,
If you can make 3% a month for 10 years straight, an initial $10,000 worth of capital will turn into $520,664.81 in 10 years. Not bad. FAZ moves 3% every day. There are 20 trading days in a month. If you can catch the right move in FAZ for 1 day every month your set.
November 21st, 2009 at 10:55 pm
Fritz – We will miss your posts. Family comes first. Your market observations have been astute and I respect your analysis.
November 22nd, 2009 at 9:22 am
FAS was down to $3 in march, i know i traded it and watched as it soared to
14 on a short squeeze. U don’t get the same short affect on rising prices, just
does not happen.
My guess is we are looking at 1240 as a top on the S%P and then will suffer
a 25-30% correction. Big deal. Holding shorts that term would kill.
Dear little zee. . . . take it from a guy with 35 years of trading to hang a hat on,
its not the 3% gains, its the 50% drawdowns that put u out of biz, thats why
markets plunge and shakeout the weak of puss.
November 22nd, 2009 at 8:10 pm
It’s impossible have a MAX DD with 50% of your money with UUP. No third party fund supplier would look at any portfolio with drawdowns bigger than >20%. If you’ve really worked in the trading industry you would of known that. I’m trying to start a fund.. I’m pretty serious.
Zee, can you explain your cycle theory?
The DJIA makes a low every 41 & 21 trading days. Why? The direct cause is unknown. It just happens. In-between these 41 & 21 trading day cycles, you have half cycles (11 days)… Also, you have larger cycles of 6 weeks, 3 months, 6 months and 12 months. The direction of the larger cycle always has more power than the direction of a lower cycle. For example, let’s say on day 21 the market should put in a bottom; however at the same time the 41 cycle wants to put in a top.. in most cases the market might top instead..
How do I know this? Because of detrending data: Here is the introduction…
Detrending – Deviations from a Moving Average
The use of deviations from a centered moving average is actually the traditional method of measuring cyclical fluctuations, and the passage of time has done little to undermine its usefulness. The basic analysis consists of two parts:
Calculating an arithmetic moving average to smooth the time series data. This smoothed data is then used as a trend
Each number from the original series is divided by the appropriate average – the middle term – from the moving average series.
Each Market Has Own Dynamical System
According to Elliott, markets move in price and time from highs to lows and lows to highs in minor trends, intermediate trends, and primary trends.
Each trend of similar degree is the direct effect of an underlying cause – the constant vibration of numerous cycles at work. According to Bryce Gilmore, on many occasions, market trends change with important cycle events, classified as:
Fundamental Cycles due to the regularity of profit reports, production reports, crop estimate report, Federal Reserve board meetings, G8 meetings, government elections, etc.
Natural Cycles, or seasonal cycles, as a result of the mechanical movements between the earth, the moon and the sun.
Planetary Cycles due to the movement of the planetary system. Gilmore believes that the relative position of planets is important but is a secondary effect on market cycles.
Read more: http://investment.suite101.com/article.cfm/rhythms_of_time_cycles_in_financial_markets#ixzz0XYx4ugOR
Informative Site on Understanding What Cycles Are:
http://www.investopedia.com/articles/technical/04/050504.asp?viewed=1
Book:
Technical Analysis: The Complete Resource for Financial Market Technicians
There is a whole chapter devoted to cycles along with a bibliography of academic papers + books on market forcasting at the end of that chapter. This is the tool I used to learn most of my knowledge. He refers to a book written purely on financial forcasting.. I still have yet to read it.. it looks awesome.
November 22nd, 2009 at 1:36 am
Thanks for the explanation.
Tell me what you guys think, but it appears to me the news is showing an unusually bearish overtone this weekend. Getting a very strong feeling we go down Monday, and possibly 2 of 3 more days next week.
November 22nd, 2009 at 9:29 am
G2R, how much u down? nonmybiz, i know. but you are reaching, you are
hoping for down in an up market, news don’t matter when the rest of the world
is chasing gains based on t/a and algors.
If ur an inactive investor, hope is not an option. My invest recommend for u is
a shovel and chest of gold or sliver.
the price of an ounce of gold just passed the s&p and shows no sign of tiring.
take a sp500 to the gas station and see if u can trade it for an oil change? NO.
Try that with gold and they move u to the head of the line.
November 22nd, 2009 at 10:04 pm
Thanks for the Advice Paulie, I appreciate it. . I’m down about 2-3% on my positions, so its not too bad.
November 22nd, 2009 at 12:52 pm
Didn’t you have a strong feeling about a big downward move in the markets this past Monday, the 16th? We had a red day on Thursday the 12th but there was no follow though on Friday the 13th. This kind of action gives confidence to buyers and we ended up with a big green candle on the following Monday.
Anyway, keep in mind that any downward moves at this point could be beneficial for bulls or bears. The bears need something/anything to get a more sizable move downard started. However, they have been unable to really follow through on these moves since early March. The bulls need some pullbacks to occur in order for this rally to be sustainable. The dips have been bought consistently and until this pattern breaks, the bulls are in control. You have to see things from both sides.
I believe that we will have a green day tomorrow (and I’m positioned accordingly) but I wouldn’t be surprised at all if we ended in the red. It does seem like the market is looking for some direction here but the benefit of the doubt is with the bulls until the bears can show some strength. In the meantime, there are opportunities to trade both sides until a longer term direction shakes out.
Best of luck to you this week!
November 22nd, 2009 at 10:10 pm
Thanks for the advice Morris, I appreciate it, and I thank you for the good luck wishes my friend, I wish you the same and hope you make a lot of money this week.
Yes, I did have a strong feeling about a correction on Monday the 16th and was absolutely wrong. I was even more sure about Thursday the 19th as you mentioned as well, and was good as gold on that day. However being 100% short for 4 full weeks has ended up netting me zero and being down 2-3% so I definitely have not proven to be much of a prophet, that’s for sure.
I know things could go either way, but it just seems that there’s so much more risk to the downside, as well as so many indicators showing the rally being so overextended, that I really strongly believe we will have a pullback very very soon. If it goes the other way on me or just chops around for the next several weeks with me holding all positions, it will have just been an exercise in futility, but I want to hold tight for a while longer, and feel it will seriously pay off.
Tomorrow is very important however, and a close seriously in the red wouid make me feel a lot more comfortable, for sure.
November 22nd, 2009 at 6:47 pm
another bear trap Monday.
The market will eventually dump, but I believe it will require a Black Swan of some sort.
A Taxpayer’s Must Read: The Fed Waltz With AIG
http://www.cnbc.com/id/34091840
November 22nd, 2009 at 4:47 pm
nastrades,
As many, I am pissed at whats happening with my tax dollars. This is not new, as a country we have been taken advantage of for years, An elite group is the beneficiary of all the scaraficeis of a common man. We are blinded with propaganda by our news media and our leaders. We have been drawn into wars which were not ours to fight.
Zee, retireedguy, etc. Market up huge in futures (every weekend survived without an attack by
nukes or hordes of locusts taking over earth is seen as a reason for rally).
Gold up $16 in spot market silver up .55.
so much for the cycles theory, when we go up its up forever, when down its down a dime
on miracle recovery.
Even the yes vote for healthcare and explosions on 3 mile island cannot contain this BS as
the market rockets ahead to dow 16,000.
The cycles seemed to have worked for meltdowns at 3 mile island and bolshevik uprisings
in the senate. . . . but even that not nuff to overturn the bull run on greed and bubbles. An
invasion by cuba would result in a mega rally as the war needed got delivered.
Cycles, schmickles.
November 22nd, 2009 at 9:48 pm
So, I bet you were the guy saying the market was going up in Jan ‘09…
Just babbling bullishit without back up…
November 22nd, 2009 at 11:47 pm
This guy sounds like Palladin!!
The market won’t crack until the bears stop claiming victory after drops. It always works that way. We are getting closer.