Doug’s Blog

The trend changed from short to long this week as the market closed above the 2/22/10 candle.  The big day was 2/25 as the market recovered intra-day.  The trend could change back to short quickly if we break down through 1085 on the SPX.  It could also double top at 1150.  But for now it’s a confirmed uptrend.

We’ll stick w/ our forecast that a top is between 1100 and 1200 on the SPX.  Was 1150 the top on 1/19?

Don’t know and won’t know until after the fact.

GLD closed above 110.50 which is a bullish sign.

Jobs tomorrow.

The force (manipulation) keeping this market up certainly is not the fundamentals.  Thursday was an impressive (recovery) day after a gap down at the open. 

I still see the trend as short as of the 2/26/10 close.   I also think we’ll trade higher next week. 

How high? Don’t know.  We have been hedging our short position  and will increase that hedge with a close above the 50 day using tight stops.  I see gold as a buy again with a close above 1130-1135.

Long bonds provided the 10 year stays under 4%.

Will increase short exposure w/ a close below 1078 on the SPX.

Should be streaming radio with live charts over the net hopefully soon.

Stay tuned.

Manage your own money:

Follow me free for three weeks just using the SPY (long S&P) and SH (short S&P) at www.antiWallStreetGuy.com

The speed and depth of this drop (confirmed correction as of  1/22/10) will weigh heavily on the odds of 1150 holding as a top.

Even though short covering along w/a trade the dip bounce  should occur next week - 1050 certainly looks like a near term target on the S&P.

Looking for a place to add to “SH” (S&P short).  Our current stop is w/in 5%.

Good support on the SPX at 1000 and then 950.  Obviously don’t know if this will occur - but I’d like to see it.

Trend line is broke.  5o day is broke.  Some support is broke. We are right at a trend change. 

www.antiWallStreetGuy.com

The VIX is very low.  Commodities continue to work.    A close above 3.9% and certainly 4% will continue to spell trouble for treasuries.  Therefore TBT. 

GLD looks OK but the chart is not jumping off the page.  Crude broke out.  Retail numbers next week - let’s see if the equities hold up.

As of today’s close oil still looks weak.  The financials are similar to the extent that they are still trading below the 50 day with mucho resistance above.

Bonds took a hit today as the 10 year closed above 3.6%.  We are long TBT (short bonds).

We have moved our stop above entry on UUP (long the dollar).

In the managed accounts we added IWM last week and may add VTI (broke out w/ volume today).

GLD was dumped at 114.70 and 108.37.  We may play a bounce  if it gets to 105 (support).  Today’s close was 106.95.  The shorts may cover tomorrow in GLD.

A close above 112 on the SPY would signal another bull move.  The QQQQ gave us that signal today.

You can’t,  nor should you fight the tape - but also keep a good chunk of cash at these levels.

When it’s all said and done - without jobs you have no reason for a sustainable rally.

A chart of ‘37 through ‘44 looks just like what we have today.  Make sure you or your adviser has the discipline to play this market in both directions using stops.

The option trades we have at Heritage are 69 wins and 6 losses as of 12/18/09

Merry Christmas

-Doug

The last ten weeks has not been a high tide lifts all boats market.  Banks and Energy are still trading well below their ‘09 highs.  What about a Christmas rally?  Don’t know.  Price and volume looks good on some but not all.

Hence the reason for a stock picker’s market.

Individual positions we have on in the M48 and 4 Minute Trader are: 

40% cash and the balance is - IYT, SBUX, IWM, TBT, UUP, GLD, KO, DIS, SSO, SSRI, HEAT, DUG, UNH, ORCL.

Technically the market patterns looks very similar to the 30’s thru early 40’s.   Good luck to the buy and hold crowd.

The same people who sold at the bottom will most likely just get to fully invested at the top.

Mostly sitting in cash with a partial sale of GLD.  Financials as of this post continue to look weak.

The market followed through this past week  and the SPY broke above 108  which took us out of our short position for a small loss due to our limited exposure on the short side using the ETF - “SH”.

It’s tough to get long here,  but we are discipline and take every trend provided volume confirms.  This could obviously be a head fake and we head lower.  It is for this reason that our exposure is again limited.

We are attempting to limit this whipsaw action (heavy in cash) as the bulls and bears fight it out at 1100 on the SPX.

Moving stops on GLD and sitting out crude due to stuck in a trading range. 

As of this post I think cash should be your biggest position.

Our bias is still short primarily due to the low volume rally this week and the SPY closed under 108 which is the high on the left shoulder.   All bets are off on the short side if we break out to new highs. 

If we stay below 108 and drift down to 104 - this would be a nice set up to add to the short.