Well, the action after the Fed through Thursdays close is certainly not positive for the bears. I think it is reasonable to assume that we are heading toward $94.40 on SPY which coincides with a gap fill from June 15th and a top resistance. $93 to $93.20 could be a right shoulder top should we get there, but I just see this weeks action as bullish enough to push us higher than that.
All in all the jury is still out on the indices.
I still like USO short. Although my thoughts on deflation have been wavering back and forth. At times I think it has further to go, but at other times I think it has ran its course. For instance, last week I bought another computer for $600. I bought that same computer in 2004 for $2200. Things like this make me think its over. But, then I look at car prices which have barely budged since 2004 and I think we have further to go.
I'm lacking sleep today. The market doesn't know what to do. Keep buying low and selling high.
Friday, June 26, 2009
Tuesday, June 23, 2009
MGM
I still like the oil short.
UNG, I would want to be a buyer up until about $13.30
MGM: Gave it another try today at $5.60.
I think MGM has the potential to double or even triple with some good news over the coming months.
UNG, I would want to be a buyer up until about $13.30
MGM: Gave it another try today at $5.60.
I think MGM has the potential to double or even triple with some good news over the coming months.
Tuesday, June 16, 2009
Short Oil, Patience Needed
Oil sitting right near its trendline. USO break below $38 is shortable. You can short now with a stop above $40. I would wait for a break below $38 because $40 is resistance and there is too much unrest in Iran making the headlines. Oil inventories tomorrow as well as CPI #s.USO is getting very close to coming down. There is a tiny gap from November that remains unfilled at $41.42. I originally thought (2 weeks ago) that USO would make a run for that gap making a false breakout, giving an excellent short entry though DTO or SCO.USO short is a no brainer. If you short it up there and are wrong, well then, we will be in a depression and it won't matter anyway. lol. My guess is that Obama will end the oil run somehow.
$42.60 and $50 are the two resistance levels above $40 for USO. I'd say shorting USO at $41.42 with stop at $42.70 would be a very nice way to play it. Of course, it still needs to get that high.
resistance after $50 is $69.It is really an argument of the dollar strength and Inflation/deflation. Everyone is screaming inflation but foreign nations bought our 30 year bonds without a blink of the eye last Thursday (that is deflationary). If you were a large foreign investor worried about inflation, you wouldn't buy 30 year bonds. Either that or they know something that we don't know. I think the dollar's ultimate low is in for several years and deflation has NOT ran its entire course. Therefore, oil is going down (eventually). I'd be surprised if USO gets back to $50 but then again its peak was $120.
--watch the dollar
--watch SPX
--watch oil
$42.60 and $50 are the two resistance levels above $40 for USO. I'd say shorting USO at $41.42 with stop at $42.70 would be a very nice way to play it. Of course, it still needs to get that high.
resistance after $50 is $69.It is really an argument of the dollar strength and Inflation/deflation. Everyone is screaming inflation but foreign nations bought our 30 year bonds without a blink of the eye last Thursday (that is deflationary). If you were a large foreign investor worried about inflation, you wouldn't buy 30 year bonds. Either that or they know something that we don't know. I think the dollar's ultimate low is in for several years and deflation has NOT ran its entire course. Therefore, oil is going down (eventually). I'd be surprised if USO gets back to $50 but then again its peak was $120.
--watch the dollar
--watch SPX
--watch oil
Tuesday, June 9, 2009
Buy Low and Sell High
In a market this boring, we can easily lose site of a simple fact: buy low and sell high. If you are making overnight trades or daytrades and are experiencing profits, I suggest you take them when you have them. The upside is very contained here as the S&P struggles to regain new highs...but the more it bumps up against it, the more likely it is to break and when it breaks it will probably be huge. The downside is also contained. What you ask? The dips are being bought, S&P support is not defined at this juncture...a break of prior daily lows at 923.85 is a must for the bears to take back control. And even if that level breaks, the bulls could bid it back up. So, we have major sideways containment at this point and if you are trading, take profits when you have them because the profits are hard to come by during this period.
I am short the S&P via SDS. My stop is just above the highs on the S&P or the lows for SDS. This rally is impressive and is now going on 35 days during this cycle. The average trough to trough which is 39 days. From the bottom, we are actually on day 65. Odds of a reversal are increasing rapidly. Make no mistake about it, this IS a bear market that we are in and equities will pull back again. They are very capable of putting in a fresh low as well.
BAC
USO
UUP
IYR
UNG
TBT
SRS
XLF
SPY
SDS
URE
good luck out there
I am short the S&P via SDS. My stop is just above the highs on the S&P or the lows for SDS. This rally is impressive and is now going on 35 days during this cycle. The average trough to trough which is 39 days. From the bottom, we are actually on day 65. Odds of a reversal are increasing rapidly. Make no mistake about it, this IS a bear market that we are in and equities will pull back again. They are very capable of putting in a fresh low as well.
BAC
USO
UUP
IYR
UNG
TBT
SRS
XLF
SPY
SDS
URE
good luck out there
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