Nenner

I like what I see of Nenner's model.

Evidently, he has two ways of making predictions: sunspots and technical analysis. When both align, he makes a call.

Right now, his major predictions are:

1. Silver and Gold up in 2011 to new highs.

2. Equities up for next 2-3 months. November 30 was a good time to buy. (I did!)

3. U.S. will double dip and we will see Dow 5000 in the next 2-3 years. India and China will not feel the double dip. We will start to see this fall after 2-3 months.

4. The strength of India and China will determine how the U.S. and Europe pull out of the double dip.

5. India and China will lead for the next 100 years.

6. U.S. Housing market woes are not over. The U.S. is following Japan's path.

(I'm not sure about this last one, because the U.S. is still increasing in population.)

7. War/global catastrophe in end 2012, beginning 2013.

8. USD will be strong in 2011. We have seen the top in the JPYUSD.

Trade Update

Doubled down ZSL a few days ago - at 12.7, sold at 13.7 and 12.8 for small profit.

Bought EDC at 33.5; sold at 36.35. Will look to get in again soon.

Will go long AGQ today.

Still long UNG.

Long ZSL at $13.65; Still long UNG from $5.55; target $7

Sold AGQ at 113.5

One day profits of 5% too good to resist.

Plus, I'm learning that you have to be in and out when knife catching.

Plus, ES is at temporary resistance.

Plus, I want to get out and enjoy the day.

Trade Update

Sold ZSL at $15.4

Bought AGQ at $108.1

Bought UNG at $5.56

Bought FAS at $23.11

Update - Sold FAS at $22.4. Not happy with price action.

State of the Market Review

Inverse H&S in SPX not yet complete. Target is 1250.

AAPL looking bearish LT, bullish ST.

Banking stocks look bullish. Breakouts being tested now. FAS?

/DX is a temporary resistance, but I have a target of at least 80 within a month. Perhaps a drop to 77.2 before further rise?

PMs look like more consolidation/ fall necessary (esp in Silver).

So, correction takes another 2 weeks? Then rise to 1250. Should get a tradable bounce on Monday/Tuesday from 1185 to 1190 on the ES.

Then 1210 then 1168 on SPX.

Final wave up to 1240-1260 in March? Double top on the NAS which will lag.

Targets:

Wave 4 Path (# 1 - 3 below)

1. 11/13- 15 - SPX ST bottom around 1185-1190; DX ST top 78.7 to 79.2. ZSL 14.8 - 15.5. SLV 24.2.

2. 11/16 - 11/18 top at 1210. DX bottom at 77 - 77.4.

3. 11/25-30 or so - SPX bottoms 1170 or so. DX 80.3. ZSL 18. (SLV 22.5).

4. Wave 5. SPX rises to 1250 +.

Next Phase of Bull Market

After a decline from 1225 on the ES to 1185-1190, I believe the SPX will rise to 1300 or so.

I am waiting for the decline to go long:

Silver __

and

Emerging markets

Reminder - Plan

Short Silver

Long TBT

Stop out of part of SPX short.

SPX may go up for a bit (Nov 3?) or go down immediately. Not sure, so will put money where I am more sure.

Will Buy more TBT and TZA tomorrow.

Silver and Gold have more downside; TBT trend is up

Bought ZSL at 18.1; sold at 19.41

Sold TZA for +8%; GBPUSD update; ZSL, TBT Update

Will try to buy TBT tomorrow around $32.5 or 33. Expecting more weakness tomorrow (Thursday). (1 week trade). November 3 sell.

Will try to buy more ZSL at SLV 23.5. (2-3 day trade?).

/DX will ST top tomorrow or Friday, then fall until November 3.

Covered earlier GBPUSD short at 1.572. Short again GBPUSD at 1.5785, target 1.56.

TBT Long trade - buy 33.0 sell 37

Will probably take this trade. 1-2 week trade.

Edited from 33.5 to 33. May even go to 32.5 or so before up move, but I think 33 will be it.

After I get out of the TZA and BGZ trades, I am going to try to trade SLV and TBT exclusively for the next few weeks.

Week ahead: Weds up, Thursday up then down. Friday down. 1145 bottom.

Next week up until November 3 sell the news.

LONG TZA at ES 1178; Short GBPUSD at 1.589

LT Account

Long BGZ at /ES 1130 (60% of position) and TZA at /ES 1178 (40% of position) in LT account.

ST Account

Short GBPUSD at 1.589. First target 1.56.

Sold 1/3 BGZ yesterday at ES 1129; re-bought at ES 1145 just now

Now short SPX (via BGZ)at an average price ES 1130, SPX 1134. Plan to cover around ES 1107.

Getting killed on the EURO short but still holding a small position.

ES, EURUSD

Just added last bit of BGZ at ES 1123.

Still looking to add last EURUSD shorts at 1.3055 and 1.308.

Trade Update

Out of AUDUSD yesterday at .925 for small profit.

Added to EURUSD short at 1.308. Looking to add last tranche at 1.318 or so.

Looking to add last tranche of BGZ at ES 1130.

Hmmm....

1. On the one hand breath is amazing, indicating that there will be follow through HIGHER.

2. On the other hand, TRIN is showing incredibly overbought levels on the 5 and 10 MAs.

Added Shorts at ES 1122, AUDUSD .943, SLV 20 (Silver 20.4) and EURUSD 1.3

Now short at the following average prices:

ES 1118

AUDUSD .933

SLV $19.8

EURUSD 1.29

Plan to cover around the following:

ES 1107

AUDUSD .918 CORRected .925

SLV 19.5

Change of Mind

We are at least 20 SPX points from a major top. I expect a higher high tomorrow, followed by a 20 point pull back.

Perhaps 30 points from a top. And 3 weeks away as well. EURUSD will go to 1.299 or so.

Breadth and volume are strong.

I will cover at the coming pull back and try to short again around 1130-1140.

Short ES (1115) via BGZ; AUDUSD at .9328; EURUSD at 1.282

The Big Picture Remains the Same

Compare the charts of MSWorld Index to the Copper Index. Compare the 200 Day moving averages.

In the medium-term, that's all you need. The SP 500 is going to 950. Copper and basic materials are going up.

BIG Move in the $, Equities, Bonds coming

TLT will fall to $100. SPX should rise to 1115-1130 range. EURUSD to 1.28 or so and AUDUSD to 0.9340 or so. That is a big time short equities and risk assets zone.

Short Silver; Will Try to Short SP tomorrow 50% of position

Went short today at open (1105 ES) and covered at 1099.

Already short Silver Via Puts at $20.00.

Bull Markets End on Good News

1110 may be it for now. Pull back, then 1120- 1140?

I will short today and again at 1120-1140 zone.

The Euro is Done

As I see it from price action, the Euro is done with its upward climb. 1.278 or 1.282 still possible. But we should be looking to short.

ES 1130-40 is short zone.

Selling Longs Today

I am still long EEM (Dec calls), short bonds (TYO) and long EURUSD, GBPUSD and AUDUSD. Sorry I didn't get to post the last few trades. Have been slammed at work - 12 hour shifts.

I will sell some longs/ bond shorts today and Monday around 1105-6 on the ES. I will buy back equity longs and bond shorts around 1088 ES.

Not sure

Not sure about longevity of bounce. We may be headed down into the 900s. I may exit longs (at least partially) on a good bounce. We'll see. I may sell September calls agains the December ones.

On the other hand, the dollar isn't going up at this time (from the little I can see of price action while working at another job 12 hrs a day) and I am a LT equities bull.

Bought BIDU, TYO

Bought Bidu December calls at BIDU 79.5. Stop 76.5. More downside possible, but that's fine.

Bought TYO at 42.5. Contingent stop 40.00.

Just bought BIDU, EDC. Trying to buy TYO.

BIDU December calls; EDC, and EEM December calls.

We may not bottom until mid next week. I expect to modify these -- sell on rallies and buy dips for the next few days -- while maintaining a core position.

LT Trades

I am close to intermediate-term trades in shorting U.S. Treasuries (TYO) and long(ing) emerging equities with EDC. (Within 5%). These will probably materialize some time next week.

s.t. con fu sion --> l.t. clarity

ST

1. Bond rates (TNX, TYX) are close to strong resistance, suggesting a strong move up in Equities.

2. EURUSD is toppy, suggesting a move up in the dollar, which generally would correspond with a strong move down in equities.

3. Continued bounce in equities and EURUSD for now? Next week, I think dollar jumps and we bust through resistance on the bonds, fall to 1050-1060 in equities. Bonds go up in last-ditch fake out top.

LT

The best trade is long bond rates. I think we could go up a little more in bonds, but shorting bonds across the western world is the LT trade.

SPX; EURUSD Update

1. TRIN quite oversold on a ST basis; also this is Opex week. Bounce soon? Daily slow Stochs on RUT are already below 30; Slow stochs on Bonds are at 70.

2. EURUSD may bounce soon (from 1.2600 - 1.27 to 1.300), but ultimately may go down to 1.245 or so (61.8% retrace of recent up move).

3. Strong dollar (weak Euro) will create headwinds for SPX. SPX down to 1060 then up to 1100 or so, then down to 1040?

4. Copper could easily fall 2.5% from here before support.

Conclusion: ST bounce likely but there is more to fall before support. Short with Euro Puts or BGZ.

Sold YCS at 17.90

Still expect further strength in USD/JPY but at ST resistance, also want to free up capital.

Short JPY

Bought YCS at 17.35. May add at lower levels. Target around $19 but to be refined.

Out of SPY Shorts at ES 1117 to 1119

Short SPY at ES 1111 - Wow!

What a close.

I guess the market is telling us that QE 2 is coming after the Fed meeting next week. Shouldn't try to short a market with NAAD 10 MA this high. Should have known.

Will trade out of part position at close to break even if possible; purchase Puts again at around 1130 or so.

The Big Question Is:

Is Deflation bad for equities in a zero interest-rate environment, with QE 2 looming around the corner?

I think we saw a high in the SPX and may see another one later this month after QE arrives. I will start shorting the EURO at 1.34 or so. The EURO should eventually go higher, but the SPX may have another top later this month. The NAS may have a lower top or double top later this month.

SPX predictions: 1113 (August 12) - 1095 (August 13) - 1102 - 1080 - 1140-60 (before August 25).

Change of Mind - OUT of SPY at 1107

This may be it for the SPY, for the time being. Still long the EURUSD, though.

ES may go up to 1110, but then down to 1095 minimum. EURUSD is going to 1.335 or 1.34 before a breather.

Long SPY at ES 1109.5

Will try to go more long at 1105. Target 1130 or so.

LONG EURUSD at 1.32 and 1.324 target 1.34

What the commodities market is telling us is that: thank you, United States, for the terrible data, but you're not THAT important. You might catch up, eventually. Until then, watch my rear end.

The world is pulling the U.S. along, and it's not the other way around. Horse - cart switch.

The SPX will not crash until the EUR reaches 1.35.

State of the Market (SOTM)

1. BIDU still going up like a rocket.

2. QQQQs really ST oversold - as seen from TRIN.

3. 50% of crash resistance at SPX 1120. Big resistance at 1128.

4. AAPL not listening to BIDU's call.

5. EDC not going up after big day.

6. EURUSD definitely taking a breather. Down to 1.31 definitely and quite possibly to 1.304.

I will long EURUSD at 1.304 and 1.31. EURO is in Wave 4. This will be choppy. Short starting 1.345 or so. 1.35 will be big resistance.

I think August will be choppy for the SPX and we will form an intermediate-term top. Shorter-term trades in August might be fruitful if bought at the margins: for instance, long SPX at 1100-10; short 1130. Starting 1130-1140 I will probably start building a longer-term short position.

Correction: I may start building a longer-term short position. At the moment, I am more inclined to go long in the 1100-1100 range on SPX and the 1.295 - 1.3115 range in the EURUSD.

Closed EURUSD short; long for a quick bounce at 1.3202

Now out of EURUSD long at 1.319.

Will stick to swings from now - no day trades.

Won't go long EURUSD at these levels. Too overbought. May short again at ES 1130.

Sold AAPL Calls at 259.5; EDC at 29.6

Too early obviously. These were yesterday's trades.

The SP500 should go to at least 1130 before resistance.

Initiated one-third short EURUSD at 1.325

Closed out EURUSD long at same price.

I plan to add to this position at higher levels, if EURUSD goes higher.

This is a ST trade. Still bullish on EURUSD until at least 1.345.

Commodity Markets, AUDUSD indicating that QE2 may be coming

Also take note of Fed Bullard's statement last Thursday. Fed meets in 1.5 weeks, but announcement could come any time before then, including this Friday.

Watch out for the helicopters.

Will Try to Long Gold on Monday 1174.5 Stop 1164.5.

Target 1200. Plan to short 1200.

Biggest Errors This Year (So far)

1. AAPL Options - got the direction right (roughly) but didn't figure on the loss in implied volatility after earnings. I bought August and October calls at 256 and 260 the day after very impressive earnings (August 20th or so) and sold at 263-264 about a week later, but for a big loss. The loss was mostly because of the huge loss in implied volatility in my August calls.

2. Silver futures - Position size too large. I was trying to make a quick buck, catching a falling knife with futures. My position size was too large and so I couldn't think clearly in the face of losses. I panicked and sold for a loss. This happened two or three times I think.

LONG EDC AT 27.2; more AAPL at 256.

One more leg up has started. Will try to go long SPY as well.

Update: Long SPY at ES 1193 and 1195.

Update: AAPL not acting well. Both trades may be short-term.

NDX:SPX continues to deteriorate.

NDX:SPX continues to deteriorate.

Positive divergences in Shanghai, Hong Kong and bond rates are indicating more strength in the bull move.

Positive divergences in NYAD and NAAD also.

But NDX:SPX aint no joke.

Possible that in the near-term we will see a weak bull/ range bound SPX and strong emerging markets (EEM).

Currently, I plan to start shorting around ES 1120-1130. I think my stop will be 1165.

I feel much more confident about currencies.

I will short the Euro soon (for a bounce in the dollar).

I am only about 20% long now, with October AAPL calls.

Out of EURUSD at 1.309. Out of 30% of AAPL at 260.

AAPL, Bidu, IWM still weak.

NDX:SPX

http://stockcharts.com/h-sc/ui?s=$NDX:$SPX&p=D&yr=2&mn=0&dy=0&id=p32087580607&a=203193241

The above link should show a chart of the NDX:SPX ratio. Note the huge up move in Jan-March 2009. That was one of the many divergences signaling that the March lows in the SPX were significant. Note now the lower RSI divergence across the tops in this ratio. While we may not have hit the top in SPX (I doubt we have), we may be close.

Ouch!

AAPL, Goog, BIDU saying trouble ahead.

Out of EDC at 27.9. Will probably get out of AAPL soon.

Bought more October AAPL Calls at 253.3; EURUSD at 1.302; EDC at 27.6

Sold AAPL Calls at 265.6; EDC at 27.9

Should have sold EDC yesterday.

Still plan to buy back EDC at lower levels.

Still long 25-30% with AAPL calls.

May Sell Some Longs today

Will go to 30 - 50% long.

Waiting for pullback to 1095-1100 to reload.

Consolidating out of ST Overbought Conditions

Expecting more upside to come. 1095- 1120 range for a day or two.

I may start buying puts around 1125-1130.

Short-term Top is Close

I will get out of half August calls tomorrow - Tuesday.

Long EURUSD at 1.276; Initial target 1.31 and 1.316

Went long on Wednesday or Thursday. Added at 1.29 on Friday.

Watch Copper, FCX, and the AUD/USD

Bought more AAPL at 256.4

Bought EDC at 25.68; AAPL at 259 this a.m.

Target EDC 30; AAPL 278.

EDC Target is 30; EURUSD 1.35

We will be there in 1-2 weeks. Sold EDC at 24.75 (was expecting a little pullback), but will now try to buy twice as much at 24.75.

FuNdamentals and Technicals

Fundamentally, this a very scary time.

Technically, the SP500 is a buy, at least ST.

LONG EDC AT 23.3

Changed mind about BGU. Target to be determined.

Going Long Equities for the Short-term

This post is taken from a comment I made on a post by Will Rahal on George Rahal's blog: whitemagicanditsexposure.blogspot.com.

1. In the bull market (2003-2007), it seems that LEIs peaked some time in 2004 and the Coincident Indicators in May 2006. The market peaked in late 2007. If we expect a similar lag this time, and assume that LEIs peaked in May 2010, we would expect a market top around 2013.

2. Also, it seems that the ISM index basically plateaued from mid 2005 -late 2007, a 2.5 - 3 year period.

3. The third year of a presidential election is rarely down. Since 1961 it has always been up. November 2010 will start the third year. (http://bigpicture.typepad.com/comments/2006/06/4_year_presiden.html)

4. The BSE is about to make new highs. The daily chart looks bullish to me.

5. Interest rates are low and may stay low for while. The Fed (especially Bernanke and Yellen who have been vocal about it) is determined to keep monetary policy as easy as possible. Where will all this money go? It's going into asset and equity markets, particularly in Asia. Listen to Dr. Marc Faber's very recent interview here making a case for global commodity inflation. He also speaks about equity and asset prices in a fiat monetary regime where interest rates will not go up. http://tinyurl.com/3x6b8eo With that, I submit that if commodities double, the S&P cannot halve (based upon market capitalization of the oil and commodity firms). Thus, SPX 500 seems out of the question.

6. The housing market is bottoming. Mr. Rahal (senior's) work regarding number of housing starts seems to me to back this up.

7. However, TLT (10-year bond) is priced at the same level as it was in March 2009. This is a huge negative divergence with the equity markets. Why are bonds priced for DEPRESSION in spite of the fact that interest rates at 0%?? Finally, percent wise bonds rates have been going up a LOT less than equities, in the most recent move up (SPX 1010-1095). The MACD divergence in the daily charts of the ten-year bond is telling and bullish, but it is a smaller divergence than that seen in the SPX. Rally we must, but top we will. Bonds may be, in the longer-term, indicating a negative, NOT positive, divergence with equities -- negative for equities, that is.

In the long run, I am still leaning toward the theory that we stay range bound in equity markets the ST (900- 1170) and at some point start a new big leg up in Commodities that holds up the stock market. I could be all wrong about the LT scenario. We could get deflation, and the Commodity supercycle may have been over in 2008. But I am quite confident that the bull wave will continue for the ST (next 1 month or so).

I will try to go long BGU tomorrow for a target of just under $50.00.

ST and LT Outlook

Indices

NAS is looking screwed. NAAD not good. $RUT (index of truth) looking bad.

NYA 13-34 SMA looking very bearish. Indicating any bounce to 34 MA should be shorted.

ST we will likely fall further to 1040-1060 zone. But then we should bounce and possibly all the way to 1130. TICK was not weak on sell off Friday, probably a Cramer (Sell equities call on Thursday) induced retail sell off. No broad selling. Shanghai is showing ST bottoming action. TNX will likely make a higher low. Daily TYX showing huge MACD positive divergence. 5 MA of TRIN went from overbought to oversold in one day (indicating a ST bottom is close). PC ratio still not toppy, especially in the 10 and 13 MAs. Monday/ Tuesday lows could be bought. ST we should see 1050-1060 SPX, IMO, which could be bought.

But no point selling equities long-term at these levels (1040-1060 SPX). Higher levels expected.

Russell is lagging and will continue to lag now. Shorting Russell will give better bang for buck. (TWM)

I will trade two things. Probably TWM (to short) or BGU (to long) and EURUSD.

Revised: On Monday, I may go long TMV or Short TLT via Jan 2010 Puts.

Easy to get caught in the ST, when trading too much, and not see the LT. Trees not the forest.

Currencies

Dollar will fall more. EURUSD will come down to 1.27 and then up higher. I will long 1.27. Target is still 1.35. This may support the US indices for now. USD should be sold at 83.3 - 84. 81.5 is solid support. (1.316 on EURUSD). Then 79.9. (1.3510 on EURUSD). One of those will be the top for EURUSD.

PMs

Gold is going to 1170 minimum. 1195 - 1205 is short zone. Stop at 1210.

Silver to 17.6 on Monday, small bounce, then 16.5 in a week or so. Then down more later this year.

Details (unformatted)

Equities

Up until August 10-20.

Then look to short U.S. Indices.

This is still a bear market.

Dow 5000 means SP 450. A lot of people are calling for that.

I am not dismissing that scenario.

Looking at following scenario:

SPX 1220 (May 2010) - 1040 - 1130 - 1010 (July 2010) - 1090 (July14) - 1050 (July 20)

- 1120 (Aug10) - 950 (October 2010) - 1050 (December 2010/Jan 2011)

BVSP is falling apart.

BSE is doing well. Indicating higher highs.

Copper is noncommittal - possibly because of the falling dollar.

Commodities are surging - because of the falling dollar. May lift the indices.

Commodities take indices up until mid October, then fall with market until October.

Long commodities in October?

May long food in October for long-term.

Friday and the ST Future

EURUSD - should go up to 1.31 before a significant break. I plan to add to shorts at that level. Target is 1.276 and 1.272.

SPX - 1040-1055 should be a nice long zone, but I may not take this trade because longer I am looking for higher prices to short. I will add shorts in the 1110-1130 zone. This will be a longer term trade, using BGZ.

Thursday and the Future

Sold SPY Puts yesterday at 1085.

We are on the verge of a 20-30 point break -- minimum.

I am short the EURUSD (target 1.268) and GBPUSD (target undetermined as yet).

Tuesday - Bought SPY Puts

Bought SPY August Puts at SPX 1089. Target SPX 1075. As of now, this is a ST trade. Trend line resistance, overbought TRIN, etc.

Next Week Trades

I expect some consolidation Monday - Wednesday to work off the overbought conditions.

I will try to buy:

1. EURUSD at 1.265

2. AAPL at $258.

3. BIDU at $70.

Bonds, Equities, EURUSD, DX Update

Bond rates - going up LT

Equities - slow rally/ range bound; ST Top at SPX 1080-1095. 1090- 1055 - 1130.

EURUSD ST top at 1.284 or so.

AUDUSD ST top at .8860.

It's all going up; wait for a drop to go long.

EURUSD Target 1.32

Looking for 1.2470 to buy. Target 1.32. Target 700 pips.

SPX, Gold and USD update

SPX

I am not sure about a return to the highs but we should get a decent oversold bounce. Perhaps the bounce will translate into one more leg up to 1160-1170 SPX, but it's entirely probable that we will top off at 1090-1100 on the SPX. I will let go of longs at around 1090.

USD

Edited at 4:30 p.m.. Change in outlook.

USD chart: http://tinyurl.com/2bltafk

I see a move to 82 being possible. In fact, that is my 1 month target, and is what I believe may bring the equity indices back up. ST, there should be a bounce or resistance fairly close to the 50 or 55 DMA, but that is still 50-100 pips away.

The devaluation of the dollar is the only thing that will bring up the U.S. indices.

I think that there is a 50% chance that the U.S. Indices will top off soon and fall to 910-950 SP500 (and in the mid 8000s in the Dow). The only thing I see that makes this unlikely is that every one and their mother is looking for this. When everyone expects something to happen (here I mean the completion of the H&S in the U.S. indices) it rarely happens. Even if the H&S is to complete, it is possible that it will violate to the upside the right shoulder, so as to run the stops on the shorts. Maybe it will climb to 1145-50? This would mean a move down to 82 in the USD.

EDITED 4:15 p.m.: The other probability is that the 50 DMA proves to be the springboard for new highs in the USD. The 50 and 200 DMA are indicating a LT bull market in the USD. This would mean a top around 1090-1100 on the SPX and 10300 on the Dow.

Gold

I am expecting 1325. GLD itself is the best way to long this. GDX and SLV are not great vehicles right now, IMHO.

Conclusions:

The ES fell roughly 68 points from 1129.5. It's been following fib ratios on this recent move. It could go up 32 (1094.5), 50 (1112.5), 68 (1129.5), 76 (1137.5) or 100 (1162.5) percent of the fall. Right now, I have little idea about how high this bounce will go, hence I would not deploy long-term funds. I am quite sure that we will get a bounce and if I had long-term funds in the market, I would be out at 1090 SPX, 1300 Gold.

Short-term

If my projections are correct, we should gap up on the equity indices on Monday, gap down on the USD, half fill the gap and then go to 1090-1100 ES before resistance, 84.5 or so on the USD, and 1.2460 - 1.250 or so on the EURUSD. There may be a short pause at those levels.

I plan to stay long the EURUSD until just short of 1.26 where I revaluate my thesis, based upon the reaction to 1.26.

Friday

Bounce on Monday? Today is Friday + new moon. I don't see any bottoming action yet. We may form a higher low today (higher than 1045 SPX). Perhaps in the 1056-1060 range? I am still long from 1072, but may adjust (sell 1075 buy 1060).

Look at TLT. The daily chart looks over-extended with declining RSI; however, the weekly chart suggests a bull flag with a target of 110. This would accord with a target of 950 for the SPX. We are either bottoming and going to rise, or we are going to crash to 950. Overall I'm really not sure, and I may get out of my longs.

Update

Weird goings on.

1. Bearish death cross on the BVSP.

2. BSE looks like it could be about ready to top and drop hard. Lower RSI on the daily charts. Very close to all time high. Struggling here.

3. Copper, however, is stronger than it was at the May lows. This indicates some at least ST strength to come. However, there is a death cross forming in the Copper chart.

4. CRB is similar to BVSP. Death cross formed a while back. Now higher and hitting resistance at a falling 50 DMA. Bad news. Trouble in China?

5. Gold looks strong, but daily MACD is not looking strong.

6. PC ratio is oversold - daily and 5 DMA indicating possible ST bottom.

7. GLD:SPX ratio strong and indicating further strength.

8. Dow the most bullish of the indices. Not surprising. Strength now will come from the large caps.

9. Emerging markets to SPX looks very toppy. Suggests that SPX may be about to bottom or emerging markets may be about to top.

10. NDX daily could be bullish. Higher RSI low possible; MACD looks very constructive; 200 MA support very close below. However WEEKLY NDX is QUITE bearish. Looks ready to fall apart.

11. $NYA just formed a DEATH CROSS.

12. NYA 50R still has positive divergence.

13. Tomorrow night/Saturday is full moon.

14. NYHL still has positive divergence with May lows.

15. NYMO negative but not oversold.

16. NYA total volume super low over the past few days; indicating a TOP?? Summertime?

17. NYUD bottoming. RUT closed below the 200 DMA. Not close to a death cross. RUT not close to resistance, though. Long way to fall before May lows.

18. Friggin Shanghai looks constructive! Daily MACD is constructive! Daily RSI looking good.

19. TICK indicating lower lows to come in the short-term (tomorrow).

20. TNX breaking out below very important support?? MACD constructive. Daily RSI positive divergence.

21. Transports could be ST bottoming. Daily TRIN indicating bottom may be close. 5 DMA is quite oversold.

22. Like TNX, TYX looks constructive.

23. USD daily MACD looks very bearish, but ST bounce may be close. Rising 50 DMA is CLOSE!

24. FXI just hit the 200 (from below) and reversed. Also has a death cross.

25. GOOG has a death cross. Small bounce may be in order within a day or so. Bottom of a range. Then 420 target?

Conclusion - unsure. ST bounce to 1090 then drop to 950?

Outlook

Very weird goings on. Bonds are double bottoming? EURUSD is rising sharply as equity markets bottom? EURO might be about to take off.

1. Long-term (1 year+) bull market

2. Medium-term (next 1 year) bear market

3. Short-term (next 1 month) bullish

Indicators

5 DMA TRIN is oversold

Bonds (TNX) is at double bottom on daily charts with positive RSI divergence.

5 DMA of TRAN, DOW, NDX giving sell signal.

Rest of the market looks quite bearish, longer-term.

Trades

EURUSD is bullish. going to 1.26 in next 2-4 days. I am trying to go long.

AAPL - I may try to go long tomorrow, for a swing trade.

Outlook

1. RUT is at double resistance -- falling trend line (or parallel channel) and horizontal trendline.

2. 5 MA of all indices is bullish.

3. Thursday and Friday ending short squeeze has pushed indices up. EURO just got a boost as well.

4. Dollar is at or close to support.

5. RUT:SPX is bullish; indicating further strength to come, after possible pullback Monday-Tuesday.

6. SPX at top of channel as well.

7. 20 EMA of daily CCI on SPX (one of my favorite ST indicators) is bullish.

8. Shanghai appears to have bottomed for the short-term and so has Brazil.

9. TICK both intraday and daily are ST bullish.

10. Bonds (TNX and TYX)) indicate some ST bottoming action. Daily MACD in TYX is particularly constructive.

11. Daily VIX is bearish on a 5 MA chart. Buy signal.

12. 5 MA TRIN is overbought on SPX and the NDX. Indicating pullback is imminent.

Conclusion: Very short-term pull back then up to 1140 $SPX at least. Buy 1070 SPX. Start putting together long-term short list.

EUR-USD: 1.2150 - 1.199 - 1.2600

Will try to buy EURO at 1.199.

Today

ES Range: 1066 - 1090. Gonna try to buy swing buys today. IWM, SPY August calls?

Euro - will try to swing buy in the 1.19 - 1.20 range.

AAPL Update

Weak today. Will try to sell around 246 and buy again around 238.

UPDATE: Wow. Was I wrong. Just goes to show I can't predict strength later in the day from weakness in the morning.

Bought AAPL October Calls at 242.7

May be too early, but that's okay. This is a swing trade.

TNX and TYX

Bond rates show positive divergence in daily RSI. Daily MACD is also constructive. We may not see 1010 on the ES. We may be close to a bottom -- maybe 1030. Time to start buying August/September calls.

Anonymous Forecast on Another Blog

No opinion on this yet. Just putting it out there, mostly for myself to look at and think about.

http://whitemagicanditsexposure.blogspot.com/2010/06/beauty-contest.html#comments

The DX should drop 10 cents into Aug 10 2010. The target has been 95 and this from Oct 2009 when my call for the low was 72/74 and it made a low in Nov 2009 at 74.85 or so.

The only thing that changed was the pattern. It was suppose to be at 78/79 cents by April 16 latest end of April 2010 from the move up to 80/82 area.....then from 78/79 move to 95/96 by June 2011 and earliest Jan 2011.

So it must retrace soon a good 10 cents with Gold going to 1380, silver to 21.75 ( new highs), ES to 1240-1307, CAD to 1.02-1.05 all by Aug 10 2010.

I expect gold to fall from 1380 to $850-750 by June 2011 earliest could be Jan 2011 and silver to $10-8 from new highs of $21.75. $10-8 also by Jan-June 2011.

Coffee, wheat, beans, corn should make good retracements into Jan-July 2011 time frame with Coffee making new highs in 275-316 range. OJ should be down to 60-62 cents by Dec 2010 and then pop up within 3-4 months to 120-140 area by March 2011.

Euro, BP, SF, AUD should have good retraces till Aug 10 as long as DX ( us index) follows the pattern and breaks down soon into Aug 2010.

Finally, once the dx makes the 95/96 area it will proceed to crash into a final low at 41 by end of 2012/early 2013. It will test this low area 3 times in total into 2014 and then proceed to move to 113/122 and even up to 165 area or past it come 2019.

Gold will maket a new high of $2,800 with silver up to $120-150. Silver will outshine gold from 2011-2014.

Expecting 1010 on SPX in June

Negative divergence in lots of places.

Possibly 1055 - 1075 - 1010.

I would be out of long-term long equity holdings.

Correction: Expecting 1010-1035 intermediate bottom. Still bullish 1-3 months out. Bearish long-term (1-3 years). Bullish longer-term (3 years +).

Sold AAPL Calls

Expect 1100 on the SPX before further fall.

Will sell some SLV on Monday; Watching SLV carefully. Gold looks like it could fall to 1135.

Expect to buy AAPL around 225 or so.

Bought AAPL (241.6) , SLV (17.3) July calls here.

Sold all EURUSD, GBPUSD longs at 1.252 and 1.455 respectively;

Will not be posting all trades from now. Too much work.

Lessons from this Mini Crash

1. The more overbought we get, the harder we can crash.

2. Bottoms usually come in spikes. Look for a spike bottom to buy.

3. Futures are not good for buy and hold.

(This last one may seem stupid, but the point is that futures are not good if even some downside is possible.)

4. SOX and Bonds are great tells for the future.

Long EURUSD at 1.234; Long GBPUSD at 1.425

EURUSD target 1.256.

Outlook

Copper looks like its bottoming.

USD looks like its topping. Ideally we would get another high with divergences on the daily charts.

Equity PC ratio is highest since July '09.

5 MA of Equity PC ratio is pretty close to a bottom.

5 MA of TRIN is indicating a bottom is very close.

NYHL and NYMO are bottoming and have a divergence.

I am thinking of going long SLV big time. With July calls, not futures.

And EURUSD.

Morning Update: Actually, Silver may go down to 17.5 before a bounce. Gold is still falling.

No fear. More downside needed for real bottom?

Sold all EURUSD longs

At 1.232 and 1.239 for a small profit. Bought these at average price of 1.232.

Looking for opportunity to buy EURO on a lower RSI bottom on the daily charts.

Bought SLV June 19 calls at SLV 17.82

Wednesday Plan

1. Buy SLV June or July Calls. Target $20.00.

Market Overview

1. USD index appears to be at a ST top at 87.3 or so. It should fall to 85.4 or so, followed by another top should come around 87.3 - 87.5. This top should show divergences on daily RSI.

2. This should correspond with the EURO approximately as such: 1.2240 -- 1.2510 -- 1.2130.

3. Then EURO could rally for the rest of the summer to 1.3 or so.

4. SPX Most charts indicate a bounce is coming.

1120 - 1150 - 1135 - 1270?

Post on Carl Futia's Site

Note the huge discrepancy between TICK and price in the last 10 minutes. Here's a chart: http://tinyurl.com/29l66em SPX is in green. This happens when a few stocks that comprise a large part of the index are sold heavily. This is quite easy to do, and drives fear into the market, brings the narrower indices down. This will increase volatility, lots of people will buy Puts, which will be shorted. You could also look at the difference between the RUT and SPX in the last 5 minutes, and it would show you the same thing. Note the ending dip in the SPX and how you don't see it in the RUT? Options Opex is next Friday.

Very Short-term Outlook

1. AAPL 163.5 - 155 - up.

2. Gold 1145 - 1128 - up.

3. SPX 1175 - 1160 - up.

4. Silver - harder to say - maybe down to 19.35? then up?

I will try to buy Silver, Gold, AAPL and SOX.

Shopping List

Will buy what I can of these:

Gold at 1210 (missed!)

SOX at 39.7

AAPL at 255.

ST Outlook

1. I expect that U.S. indices will ST top at 1168 - 1170 or so on the SPX, and fall to 1140 - 1150 or so, from where we will launch another wave up. I will try to go long again at 1150 or so.

2. EURUSD could fall to 1.276 or so, fill the gap and then move up.

3. Gold could fall to 1181 or so before going up again. It may make new highs on this move.

AAPL, SOX are good longs.

Update

5 DMA of TRIN and PC ratio are indicating a big bounce could come any time. Perhaps from 1140 ES?

Long BGZ or SOXL?

Bull Market Update - U.S. Indices

1. I am long, as mentioned earlier, and will exit today and monitor.

2. There is a good chance (70% in my opinion) that the bull market will continue to 1280-1300 SPX. Because I give that greater than 70% odds, that is the way I will play it.

3. I will reassess my bullish bias if we drop below 1130 SPX on a closing basis.

4. I am looking at SOX, AAPL and PMs for longs.

5. This may be a good long-term entry point for a part position in the China, Brazil and U.S. indices.

Bull Market Update - U.S. Indices

1. Don't know if this is an intermediate term sell off or a short-term sell off.

2. Expecting a bounce in the short-term.

3. Long for the bounce.

4. Will get out at AAPL 250 or thereabouts, SPX 1140. Then I will wait and see.

Great Post, Reminds me of Will Rahal's Work

http://www.investmentpostcards.com/2010/05/06/stocks-over-discount-economic-recovery/

Trade Update

Long AAPL July Call spread at AAPL 234; long EURUSD at 1.2650; long GBPUSD at 1.472.

1. Call Spread because of IV crash. I expect VIX to drop, which will affect my 230 call, but hopefully it will affect the 250 call more.

2. Long AAPL because of my premise that either

a) we get big bounce in the next few days, or
b) the bull market continues. I suspect b). I don't think we've seen all the greed come out yet.

One of the above has to happen, IMO.

If I am wrong, the 250 calls protect me on the downside.

But, obviously, I don't think I'm wrong.

AAPL is the only one I expect to hold (perhaps for more than 1 month). The currencies are for the next 1-3 days

Nice Opportunity to Go Short U.S. Bonds Long-term

What the heading says. Go short bonds or long interest rate futures if you can - over the next few days.

Out of AAPL

Don't like price action.

It was following, not leading the market.

Going down to 240?

Awesome Post by Carl Futia

http://carlfutia.blogspot.com/2010/05/breakout-or-shakeout.html

It addresses:

1. How long do bull markets last after advancing issues peak?

2. What can be expected when there is a breakout from an area of congestion -- a place where the market has spent a long time.

Thursday and the Future

Went long AAPL at 250 and change today. Went long more SLV.

1. Market's going up.

2. Divergences in NASD up down issues and up down volume; Gold etc. SLV will rise by Friday.

3. NYHL and NYMO are at levels indicating bottoms. 9 DMA of NYTV is similar.

4. We should get at least a bounce. Then we'll have to decide if it's just a bounce or a new up trend.

5. But TICK indicates that we may get a lower low tomorrow before a bounce. Possible 1148 on the SPX?

6. Also no climactic volume today indicates no bottom yet. Finally H&S resolution is 1140 ES.

7. Then, in my opinion, NDX is going to 2000, and possibly to 2050.

8. So, on the SPX, in order 1175, 1148, 1200?

Gold miners are doing great. Indicating Gold will jump.

Keep checking TNX. Important support.

Will sell SLV calls and some AAPL tomorrow (Thursday).

After this rise, start looking at LT Puts.

Lessons from this Mini Crash

1. Look at the NYA. That is the most important index. Trust it.

2. Trust what you see in the other indices. Europe, China, Brazil and India.

3. Silver is very weak in down trends.

4. The middle of a down trend is just the right time to buy Puts or sell Calls for protection. No, it is NOT too late.

Wednesday Plan

1. Short GS at 152.5

2. Short SPY until AAPL closes 250 gap.

3. Long AAPL at 250.

Why Short the Indices?

When you can short weak stocks (or weak foreign indices)?

Don't struggle to anticipate a trend. There are lots of confirmed trends all over the world. Just find them. Use the 5 MA system or your other systems.

If you're not very sure about a direction for U.S. Indices, buying SPX puts may be riskier than other options.

Short AUDUSD spike on Interest Rate decision?

Just an idea.

Think about it.

Feels Like a Wave 4

The choppiness here, feels like a Wave 4. It may just be Wave 4 of the entire ascent from March 9, with Wave 5 to come.

Plan for Next Week

1. The U.S. indices are broken. I will look for a retrace to short with SPY Puts. Look at the big red candles on the daily. We could go down to 1110 or so in 2 weeks. First stop would be the 50 Day SMA at 165 or so. Look at the Copper chart for one. NYA down volume is indicating a correction. BSE (Bombay) is lining up for a classic 5 DMA short. BVSP (Brazil) is badly broken and so is Shanghai.

Basically, I am looking for 1-3 days of consolidation in the indices, with a range of 1175 to 1200, and then a fall apart. PC ratio spiked on Friday and 5 DMA of TRIN is also indicating a bounce. However, at this point (as indicated earlier), I think the bounce should be shorted. Silver and Gold should do what they can in the next week, after which it may be too late. I don't see Gold going much over 1225 (previous high) on this move.

2. Will hold Silver on a tight leash and expect to sell it within the next 2-4 days. Ideally, indices would go mildly higher in the next 2-3 days and Silver would rocket to 19.5 or so. If U.S. indices collapse to 1110, Silver cannot hold out. Fall/late summer may be the next time to buy PMs.

3. AUDUSD bull flag failure indicates that it may fall to long-term lower trend line. Holding a small long for now, but divided on this. Long-term, I am an AUDUSD bull. Short-term (2-3 days) I'm not sure. May cut it loose. Will update over the weekend.

4. EURUSD: looking for at least 1.3380 to short. The USD chart looks like it could be setting up for a nice, swing long, perhaps as a sell the news reaction when the Greek bailout news comes out.

Friday Trades

1. Sold GS Puts around GS 151. Bought at 160 so it was okay but still bummer. Was sick and didn't want to be watching all day.

2. Sold XLF Puts for small gains.

3. Bought Silver futures at 18.6. Target 19.4.

4. Long AUD/USD at .9290. Swing trade, no target yet. Stop .9200.

New Lesson

Sold GS Puts at open at 151 or so.

Don't sell too soon!

Well, today I was sick and didn't want to be inside and trading, so I have an excuse, but I need to sit on my trades until I see a reversal.

Lesson from Today

Have to become more conservative. Need to watch for topping/bottoming action before buying. Need to keep at least 30% in reserve.

Stopped out of SPY Puts at ES 1204

For a nice loss. Still holding XLF and GS Puts. Added GS Puts at 160.4. We'll see what happens tomorrow. I doubt that financials are just going to go straight up, with the bill in Congress going the way it is.

Wrong! SPX is going to 1210-1212 minimum

SPX will fill a gap at 1210-1212 before any drop.

Update 11:58 a.m.

This could be Wave 5 of 5. I may close shorts slowly and consider going long.

1:35 p.m. But the NYA still has a declining 5 MA (classic short call) and an H&S pattern.

And NASD and SPX have sell signals on the daily MACD.

Trade Update

The Russell is weak. I am short XLF, GS and SPY via Puts from 1197 to 1200 on the ES. Went short between 9:30 and 10 a.m. this morning.

Update at 10:45 a.m. I could be wrong. TICK is very strong today.

10:49 a.m. Is this Wave 5 of 5?

Looking to (Possibly) Short Baidu

See what happens after earnings releases -- whether to the upside or downside.

Dollar, Gold, or Silver?

One of the the dollar or Silver will break an important trend soon. I think it might be Silver. I will short the ES at 1195. If it doesn't get to 1195, I may try to short sooner. I believe Silver will fall with the ES (from 18.25 or so).

Gold may fall too, temporarily at least. GDX and SLW are at the top of their channels. A retrace, at the very least, is likely. The dollar will move up to 84 soon.

If Gold manages to close over 1170, this point is invalidated.

As I have said before, the dollar will rise in the SR. The main alternative to the dollar is the Euro, which is getting a downgrade a minute. Until Standard and Poors downgrades the United States, the dollar will rise. When S&P threatens to downgrade U.S. debt, watch Gold. It will make a $100 move in one day.

SPX

This is turning into a 5 wave move down.

Daily charts have turned.

Important turning point.

I will short the 3 wave retrace.

Gold is looking strong.

If gold closes over 1170, I will go long gold, not Silver, not GDX.

Wednesday Plan

Today is a full moon day. I guess I should have known.

Gold is up, equities are down.

I will be buying SLV calls, GDX calls, and SPY Puts tomorrow.

I expect SPX to descend to between 1150-1175 minimum, and possibly more. I expect a nice bounce tomorrow. By Thursday we should be up to 1200 or slightly more.

Trades:

I will try to buy June SPY Puts at 2.32.

I bought Silver at 17.99. I may get out of this soon.

Out of Silver for break even.

If the market collapses, Gold will hold out better than Silver.

Why the Dollar Will be Strong (in the SR)

- It is the funding currency!

- Where else will people park their money? In PMs? Sure. But you can't give PMs to your grocer to buy milk! (At least not in the SR!)

- In every crisis, money goes into the dollar.

- Yes, this time it could be different, in the intermediate-term, but in the first response to the crisis, the dollar will rise, as will Gold and Silver. And then, when dollar debt becomes an issue, gold and silver will rise even more. The dollar will still rise against the Euro, but maybe not against the Aussie, the Loonie (Canadian $), the Japanese Yuan and emerging market currencies.

Look at Gold!

Long GBG at 1.73. Will add other miners or GLD/SLV.

Tuesday-Wednesday Plan (Waiting for the Fed)

1. I think that 1192 - 1198 will mark the end of Wave 4 down on the E-mini futures; 1195 - 1201 on the SPX.

2. I think that Silver will bottom around 17.9 - 18.0 zone.

3. All this depends upon the Fed. If they indicate tomorrow that tightening is coming soon, then SLV and equities (SP 500) could fall to 1160. Therefore, until the Fed statement tomorrow is released, speculative long positions are somewhat risky.

Long-term Outlook

Hello,

I had told some of you that I wouldn't buy equities long-term at these levels. Firstly, I want to explain the limitations of my experience and predictive ability. This equity bull-market is remarkably resilient and may keep going for a while. If Ben Bernanke and the Fed keep short-term rates low for another year or so, as is possible, then markets could keep rising and make new all-time highs by late 2011. We could conceivably keep going up to bubble valuations. This would not be good.

Most smart people I know (and even some not-so-smart ones like me) have been wrong about this bull market. While I have a good record of predicting short-term movements in the market, I have not thus far been good at predicting the longer-term. (I am zero for two so far -- on the extent of the 2007-08 crash and the subsequent recovery). These are just my thoughts. I could be all wrong.

Secondly, I want to point you to Jeremy Grantham's letter, not because he knows what will happen, but because he is very intelligent, experienced, honest and moral, and, unlike me, he is right more often than not. Link: http://www.gmo.com/websitecontent/JGLetter_ALL_1Q10.pdf

Thirdly, I want to clarify what long-term means for me -- it means, for me, a time-frame more than 2 years. I think that the United States faces significant debt servicing problems in the future, and that there is no good way for it to service its massive debt obligations other than to cut spending and raise taxes. If debt stays high (or becomes higher, as is happening), then interest rates should rise. If interest rates rise, this will stifle the recovery. So the government will want to cut spending, so as to prevent interest rates from rising. Whenever this happens, and this must happen within the next 2-5 years (and probably sooner to avoid losing its credit rating), whenever the U.S. government spending cuts spending, equity markets will struggle.

In the current political climate, we will not be able to cut spending or significantly raise taxes, which means that the Federal reserve will be under pressure to keep short-term interest rates low. (If interest rates are low, it is easier for the government to service its debt.) While this will be good for equities in the short-term (next 6 months or less; which is why I'm short-term bullish), I think it will also be inflationary in the long-run. The current short-term bank-to-bank interest rate in the United States is 0.25 percent. Extraordinarily low short-term rates over time beget asset price inflation. When bonds are not a good alternative, money goes into commodities. As those of you that live in developing countries know, food inflation is real and it is here. We in the United States haven't seen it recently, partly because of the strong dollar.

The dollar is strong because of the crisis in Greece (the Euro is the biggest alternative and sovereign defaults are increasingly likely in the Euro zone). This instability elsewhere brings about a demand for short-term U.S. debt, because the U.S. dollar is a funding currency as well as a safe haven. This demand for the dollar helps keep interest rates down in the short-term. Right now the attention is on Europe. However, sooner or later the world will catch on to the debt crisis in the United States, either through the ratings agencies putting out warnings, or otherwise. The way I see it, one after another debt crises will start surfacing in the second half of 2010 and 2011. When this happens, the gold boom will start in earnest. Thus, for the next 5-10 years, I am a gold and commodities bug.

Finally, in the very long-run (beyond the next 5 years), I am very bullish on all asset classes. For the last 6 months, I have been telling my friends that we began an 80-year bull market on March 9, 2009.

All the best!

Mistake

Sold GS Puts too early. Wanted to sell the morning weakness and buy again - but there was no chance to buy again. Need to hold tight on the swing trades until target is reached, or at least until I see a turn on 10 or 15-minute RSI. Now I don't have a GS Put.

Weekly Outlook and Tentative Plan

Long-term

Upside in this bull-market is limited to about 8-10% depending upon the index you're looking at.

Short-term

I think we may be about to begin Wave 5 of 5 of this 14-month bull market. If I am correct, it should begin some time in the next week or so.

CRB is setting up for a big move.

Gold and PMs are about to make a big move.

NAS breath looks very healthy; ready for a big move.

NYA shows chop zone may continue for a little longer, but after chop, trend will continue and next target is 8500.

BKX chart looks very bullish short-term, but I think there is some trouble ahead. Financials will be heavy; GS will suffer.

BSE (Bombay) is starting to look bullish, at least short-term.

GDX (Gold miner) index is very bullish.

Put-call ratio is still very toppy.

Bull move should start within the next week.

I will close shorts and go long, PMs and Tech.

Friday AH

80% short now. Just one small long left, in a Silver stock (PAAS), which I will drop on Monday.

1. Bought GS Puts earlier at GS 158.

2. Entered BGZ at 12.25 AH.

3. Entered FAZ at 11.11. This is a swing trade. Market may go higher but I think risk-reward is good here.

Update on Saturday at 11:22 a.m.:

I may sell BGZ, in view of my earlier analysis that we are setting up for one more move up to at least 1220-1230 on the SP 500.

I'm pretty sure I will get good prices on my FAZ, if I choose to sell it and on my GS Puts, although I will only sell these at a profit. The spotlight will be on financials next week, and I think they will struggle.

I think that bulls have made a point by closing above 1200 SPX on four consecutive days. The point is this: 1200 resistance has likely been broken.

Closed all shorts

Closed all shorts around 1204 on the ES.

Friday Plan - Bounce Coming; Wave 4 Almost Over

1. Sell most/ all SPY Puts between 1190 and 1200 on the ES.

2. Buy SLV Calls.

3. Sell GS Puts?

WAVE 5 of 5 is coming.

Wave 4s are choppy.

This is Wave 4 of 3 of this entire move from March 2009. Wave 5 of 5 is coming. Next week?

Trade Update

1. Back into SPY Puts between ES 1198 and 1202.

2. Back into GS Puts at 158.1.

Bullish day today, by any measure.

Look at the Russell!

Trade Update

Closed two out of three GS Puts at GS 156.8 or so.

Closed SPY Puts at ES 1189.

Bought FXI Puts at ES 1194.

Bought small portion of SLV Calls at SLV 17.5 or so. 20% of position size.

Closed last GS Put at GS 157.10.

TICK is strong today. May not be a trend down day.

State of the Market Review (Incomplete)

1. BSE is at classic 5 MA daily short position. Weekly MACD and RSI is also bearish.

2. Brazil weekly very bearish RSI and MACD.

3. Copper weekly bearish RSI.

4. CPC and CPCE 5 MA just now indicating a turn; 10 MA barely dented; both very bearish.

5. TRIN indicating possible selling peak. Bounce possible!

6. CRB 5 MA daily somewhat bearish, but MACD making pattern of higher lows; trending higher!

7. CRB weekly looking very weak.

8. Gold daily pattern of higher lows on MACD!!

9. Gold:SPX ratio - making a bottom?

10. Gold: UDN held support at retest of prior highs. Bullish!

11. Dow RSI making a lower high??

12. $GYX (Industrial Metals) indicating daily RSI has peaked but perhaps higher prices to come after dip.

13. MSEMX death cross! 5 MA very bearish. What's up?

14. NAAD (NASD ADV-DECL) 10 MA has small bearish divergence.

15. $NDX lower RSI high? bearish divergence?

16. $NDX closed at prior highs - pre Lehman highs. VERY IMP resistance.

17. NYA bearish MACD, bearish RSI. !!!

18. Cumulative NYAD (adv-decline) - bearish divergence!

19. 10 MA NYAD bearish divergence!

20. NYHL 5 and 13 MA - bearish divergence!

21. NAUD (NASD adv-decline volume) bearish divergence.

22. NDX making lower RSI high?

23. NA200R - stocks over 200 DMA - bearish divergence

24. New highs - bearish divergence.

25. NYMO - bearish divergence.

26. NYUD - terrible bearish divergence on 5 MA.

27. RUT - could be bullish, but can't say. At resistance. Same as NDX.

28.RUT: SPX bullish

29. SLV - buy the coming dip? Weekly MACD looks bullish.

30. SPX - bearish RSI divergence.

31. Shanghai daily chart has fallen apart. Any strength should be sold.

32. TNX (ten year rates) and TYX (30 year rates) indicating trouble ahead. What does the bond market know? Up valuation in Remnimbi coming? This would be bullish for PMs.

33. Dollar - inconclusive.

34. EUR/USD -- Look at the EUR/USD - it is falling apart. Maybe a small retrace to 1.3300 and then a crap out to 1.31 or so.

1.3200 - 1.325 - 1.300 (tomorrow). 1.3000 will likely coincide with about

That should mark the end of Wave 4 of this bull in the SPX - at about 1170-1180 on the SPX.

Conclusion - ST bearish. Even if there is strength tomorrow.

Thoughts

Lots of selling today - I was watching TRIN all day, intra day.

But $TICK was strong.

http://stockcharts.com/h-sc/ui?s=$TRIN&p=D&yr=0&mn=9&dy=0&id=p07704086370&a=148395627

Given the extreme TRIN position today, I will take partial profits tomorrow. I am thinking a move up to 1220-1230 is possible. I am now heavily short GS (profitably) and SPY (somewhat profitably). No front month calls, but still...

I will also start legging into Silver soon.

Reminder for self: Focus on the LR in one account.

Louise Yamada

I just happened upon a wide-ranging and thought provoking interview with Louise Yamada. Here it is, in case anyone is interested:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/4/17_Louise_Yamada.html

Thoughts

The market is playing along, just as expected. My GS Puts are doing well. I expect AAPL to fall to 226-230 within the next couple of days, where I will buy July or August calls.

Tuesday Plan

Buy AAPL May 240 Puts at 5.6. Sell for 6.3 before earnings.

Sell some SLV July 18 calls in the a.m. for .76 or better.

Sell AAPL May 260 Call for 4.9 - 5.2 if possible.

Tuesday trades

sold AAPL 260 calls for break even.

Sold SLV Calls for break even. Will reload soon.

Bought SPY Puts at ES 1202.5-1204.5.

Monday/Tuesday

Trades on Monday

1. Sold small part of SLV position at a slight loss; just freeing up some capital for possible lower prices.

2. Bought GS June Puts at EOD (small position) at around $164. I expect GS to open high tomorrow, after good earnings, and GS to go up to 170 tomorrow. Didn't remember that earnings were tomorrow when I bought. Oh well. It doesn't change my basic scenario of further weakness ahead.

3. Sold earlier AAPL calls for $0.40. Bought AAPL calls at 244 or so. Will sell on Tuesday.

Thoughts

Correction is not over, even if tomorrow opens bullish. I will use any strength on Tuesday to sell a little more of my long SLV position, so I can reload at lower prices.

Gold will rise to 1145, IYR to 50.9, GS to 168 and AAPL to 250 before further correction on Wednesday.

Change of Mind

The big red candle on the daily charts is saying - WATCH OUT - in big, red letters. This is the end of Wave 3 of 5.

Friday's action was also NOT conducive to the bull case for PMs. Also look at the TNX daily chart; in hindsight, its action over the past few days could be said to be flashing a warning.

I now believe that PMs may be headed down further, along with the general stock market. Accordingly, I will exit all PM longs on Monday. If I am wrong about this (20% chance), I will take my minor losses and be wrong. But based upon a number of factors -- Friday's action in all market sectors including PMs, TNX, etc., I believe that upside in PMs, in the ST at least, is limited. Gold could fall to 1100, Silver to $ 16.6 and SLV to $16.25.

Also, for the ES, this could be a test of the 1150 break out zone.

Added 4/18 at 9:23 p.m.

I think it is quite possible, however, that the downside in Gold will be limited to $1120 and Silver to 17.45 (SLV 17.1) (about 20 cents lower). There are rising trend lines meeting us there. At the very least, we should get a nice bounce there.

Accordingly, because I am bullish the stock market and PMs in the medium-term (1-2 months), and bullish PMs in the long-term (fundamentally so) I will start to leg back into PMs a few dollars down. I will also hold on to part of my position and not sell at a loss.

GS, AAPL...

I may try to buy GS $150 Puts at 3.4 or so. I expect a move down to $140. This is based upon a 3 year weekly chart. I will not chase this trade. If I don't get it, I may wait for GS to hit $140 and then buy longer-term.

I may also buy AAPL May 240 Puts for 5.50 or 5.60, again selling them before the expected volatility spike on Tuesday before earnings. If AAPL hits $249, I will probably do so. Will not chase either trade. These could easily net 30% by Tuesday 4 p.m.even if the price of the underlying doesn't move.

Silver, PMs and the Dollar

I am at max position size in SLV, bought at 17.7, 17.5 and 17.3 (on the SLV ETF). (I didn't expect to buy at 17.3.) Silver correlates well with the /ES, and because of the dramatic fall today and my expectations about the ES, I think lower prices are possible - before any new highs. I will look at charts carefully this weekend (the dollar, gold and the ES) to decide the future course.

Trade Update

Bought AAPL May 260s at $4.50 - this is a strictly ST trade meant to cash in on the Volatility spike. I will sell this before AAPL earnings, and may sell it today.

Trade Update

1. Sold all SPY Puts around 1195.

2. Sold all SLV Puts around SILVER 18.05 (SLV 17.7).

3. Bought SLV July Calls around SLV 17.7. Bought more at SLV 17.5 and 17.3. Max position size now. Will unload a little at SLV 17.65 or so, expected on Monday.

Friday

ES Range:

1194- 1205.

At this point, I do expect the ES to come back up on Monday.

No Spike Yet; Wave 3 of 5 to continue?

I really want to see a spike. If today is the end of Wave 3 of 5, then we should get a spike up. If we don't get a spike, we may go higher tomorrow.

AAPL earnings are next Tuesday, and we can drift up with minor pullbacks until then and hit 1230 or so on the SPX. That might be the end of Wave 3 of 5.

But NDX has already hit the upper horizontal line on this chart.

http://tinyurl.com/yl2x6ys

and that is significant.

p.s. I do think that this topping process will take a few days -- perhaps until April 20-25. I don't think the market will collapse before AAPL earnings on April 20. I will take profits on my May Puts at the first weakness and re add June Puts on subsequent highs.

I will consider buying a few AAPL Calls or Puts tomorrow, to sell before earnings on Tuesday afternoon. They will be worth more before earnings because of increased volatility.

Thursday

Trade Alert

I sold my IYR puts this morning -- the gains were too nice to let go of.

Bought SLV May Puts (at 18.05) and SPY May Puts (at around 1213). I am expecting higher SPY prices in the late afternoon (perhaps 1217-1220) and plan to buy a few more SPY Puts before close today. Tick suggests possible higher prices.

Wednesday

Trade Update

1. Sold SLV calls at SLV 18.05. Will buy again later.

2. Added to IYR Puts at IYR 52.5.

Monday/Tuesday

Monday Trades

1. Sold ZSL for average 3.7. Small loss.

2. Went long SLV via June calls at SLV 17.81 or so.

3. Short IYR via June Puts at about IYR 51.6.

(I expect IYR to weaken in anticipation of higher interest rates. Technically also, it has been weak.)

Plan

PMs: I expect a 3 wave correction in SLV to 17.5 (Silver 17.8) or a flat to 17.8 (Silver 18.1) or so. Gold should correct to 1140 or so. First, however, Gold should rise to 1160 and Silver to 18.25. I may sell my Silver calls at 18.25 and buy them back at the bottom of the third wave.

SPX: I expect a similar 3-wave correction. PMs has started first, so it will probably end first.

Friday, Weekend Update; Silver Target 19.5

Trades

1. Covered GBPUSD at 1.534 for a 60 pip loss. Staying off forex for now.

2. Shorted Silver (at $18.25 or so) via ZSL (bought at average price of 3.74).

I was anticipating a correction in Silver to around 17.8, which I am no longer sure about. If this happens, I will buy it with AGQ, which should be around $59. My target for AGQ (before a bigger correction) is around 66.2.

There are two alternatives:

1. That 1200 is a temporary pit stop which pushes the SPX back down to 1180 or so before a final push up to 1230-1250.

2. We go straight to 1220 or so before a major correction.

I suspect 1 will happen. If 1 happens, then Silver should still correct to 18.2 or so. I will probably buy back most or all of my ZSL at Silver around 18.2 so that I have dry powder for the bigger top I am anticipating. This means I will accept break even, small loss, or pennies on my ZSL.

Medium-term (next one-two months) I am still bullish on PMs. However, as said earlier, they will correct with the general stock market, either on Monday-Tuesday around 1200 on the SPX or within the next week around 1220 or so.

Basic scenario: I think we will small-correct before earnings season and larger correct after earnings season (last week of April).

The next two months will be choppy - large up down moves.

All the best!

Are We Nearing the Parabolic Stage?

Quite possibly.

Thursday

I think the E-minis will bounce here from 1173, which is a nice floor, all the way to 1181 or so, before they fall to 1163. That should be it for the correction, which should end tomorrow. It will be a great buying opportunity in PMs; it should coincide with Gold 1130 and Silver 17.8 or so.

I may try to buy:

1. Silver Calls at 17.8; May $18 calls for 0.43.

2. AGQ around $59.

3. BGU around 1164 on the ES.

4. AUD/USD around .9210.

5. Still holding GBPUSD short. Looking to sell around 1.5010.

Monday/Tuesday

Outlook

Money is flowing into commodities. The AUDUSD just broke out of overhead TL resistance. Is in the process of retesting. I am expecting a positive test, but we are in a resistance zone. This is the big trade here. Long PMs, long commodities, long AUD/USD.

However, in the VSR (today and tomorrow maybe) the USD may rise. There is potential for a ST top in the US indices on Wednesday. This is not clear, but some sort of consolidation in the indices is necessary after a bunch of recent breakouts. Also remember that earnings season is near, and we need a little pull back for a major run ahead of Tech earnings around the week of 4/25.

Tech is the other big trade here. Long AAPL at around 233? 226-7 would be a great entry, but I'm not sure how you would get it. Long BRCM?

The EUR will likely fall against the USD, but in fits and starts. This is a very crowded trade, with lots of non commercials, but its also a fundamentally sound trade. Right now, I expect it to fall to 1.31 or so, within the next day or so.

The GBP will also fall, but it's not in terminal decline and may show some strength against the USD after this VSR fall.

Trades

1. Covered EURUSD at 1.349. Mistake.

2. Shorted GBPUSD at 1.5275. Target 1.5010, but it may go down to 1.4934 or so today or tomorrow.

I may try to:

1. Buy SLV calls around SLV 17.3; Gold 1130; Silver $ 17.6.

2. Buy AGQ around $58.7.

3. Buy AUD/USD at around 0.9240. Target 1.1113.

Week Ahead 4/5 onwards

- I think that the USD will rise on Sunday and Monday, and the Euro should fall to 1.33 or so by Tuesday. I will try to short this move in the Euro. This fall should give a nice opportunity to load up on PMs. I will buy around Gold 1120 even though Gold may fall to 1107 or so.

- The ES should fall with the move up in the dollar. This would be a good opportunity to buy. At this point I expect the downside to be limited to 1150 or so, but it's possible that we will fall to 1140-1145.

I may try to:

1. Sell EURUSD around 1.349. Buy 1.345, then sell a bounce. I expect 1.3300 on this move down and probably 1.3200 by mid week. Sold at 1.3496.

2. Buy SLV calls around SLV 17.0; Gold 1120; Silver $ 17.6.

3. Buy AGQ around $58.7.

Wednesday

Observations:

EurUSD daily looks like it has turned over. We may have begun a move down to 1.298 or so.

11:16 a.m. EST update: EURUSD bounced on a strong German employment and European inflation. Target 1.3640. 1.3640-1.3300? We may be entering a trading range in this pair.

I may try to:

Buy SLV May 16 calls on Tuesday or Wednesday.

Load up on GDXJ?

Buy AAPL Puts on Friday around 143 or so. This would be strictly a ST trade, in anticipation of a sell the news reaction. I may switch and buy calls on Monday.

EURUSD May go to 1.31 or lower, but I will get out at 1.33 or so and focus on other opportunities. Sold at 1.349 for a 135 pip loss. Bad risk management. Will stop trading currency futures for the time being and enjoy the weather.

Buy C June 4 calls for around 0.35.

Sold AGQ for 57.98.

Tuesday

I may try to:

Buy SLV May calls on Tuesday or Wednesday.

Buy AGQ at around 54.6. Bought at 56.55.

Load up on GDX also?

EURUSD May go to 1.31 or lower, but I will get out at 1.33 or so and focus on other opportunities.

Buy C June 4 calls for around 0.35.

Sold ZSL at 4.15 (.8% profit - mostly eaten up by commissions).

Monday Plan

I will try to:

Buy SLV calls on next move down.

Huge move in interest rates coming. Gold is going up. Buy AGQ.

Load up on GDX also?

EURUSD May go to 1.31 or lower, but I will get out at 1.33 or so and focus on other opportunities.

Buy C June calls. Bought C $ 4 calls for 0.40. May buy more tomorrow.

Update: Sold C calls for $0.43. May buy on further weakness.

USD Post - Post in Progress

I see the following alternatives for the immediate direction of the USD:

1. a. The first is that the dollar does not, in fact, make a big move next week; in this case, one alternative would be that the Euro bottoms around 1.3200. 1.3550 - 350 = 1.3200. I give this a 40% probability.

1 b. Another alternative is that the EURUSD has bottomed at 1.3267, and that the dollar breakout is a false breakout. In this case, EURUSD should still descend to 1.338 or so at least, and probably to 1.3335 or so. I give this a 30% probability.

2. The other alternative is that the dollar will rebound big right away. In this case, EURUSD should descend to a minimum of 1.3050 before a correction and probably to 1.2980. 20% probability.

3. The third option is that the Euro will rise up to 1.650 before any correction. I give this a 10% probability.

As you can see, I slightly favor the first course (1 a.) for the immediate future.

This does not mean that I think the dollar has topped. The Euro will have problems in the future, with all the PIGS, problems it has no means for solving (as far as I can tell). But in the near future (1-2 weeks) I think there is a floor underneath - at least until we see what will happen to Greek efforts to sell debt and how equity markets perform in the U.S. However, I do think that equity markets will outperform in April and that risk levels will stay low. Hence, I do think that the dollar will make it's last move for the next few days.

This should mean strength in equities and PMs, for the next few days.

Evidence:

Silver Candlesticks Friday and Monday 3/28. Awesome big green bar on Friday. (Could be ascribed to dollar retrace.)

EURUSD candlestick Friday. Same as above.

Daily RSI 14 divergence on EURUSD bottom. (May not be bottom. Trends don't turn so easy.)

U.S. Debt. Look at the goddamn 2 year TNX chart. A thing of beauty.

Gold weekly trend line, solid move up from touching it.

Gold miners bounced up from TL.

EURUSD overbought on 2 hour RSI - at least a small correction coming soon.

Gold overbought on 2 hour RSI. SLV overbought.

Too cozy. One more touch or fall for Gold.

EUR 1.32 terminal move? Not much strength left in dollar?

Dollar 2 closes above breakout level.

Critical levels on EURUSD - 1.3450, 1.3360, 1.3330, ...,

Bull Market Update - U.S. Indices

Look at this chart:

http://tinyurl.com/yc2bguj

This is the SP500 (in dotted green) with the 5 and 20 MA of CPC super-imposed from January 2007 to February 2008. Notice that between mid April and late July 2007 the SP500 kept rising, as the 20 day moving averages of CPC kept indicating a correction. This is typical of Wave 5s, when bullishness is rampant. I expect a smaller version of that to end this cyclical bull. I expect that we are in Wave 5 of this bull right now.

This overbought phase in the chart above lasted from April 15 to July 15 or so, a period of about 3 months. For three months, the market was choppy but climbing. I believe that we are in a similar bullish phase right now, that will last 1.5 months or so. I also believe that we are already at least half a month into this phase; hence, according to this estimate, we will end this bull move in late April.

There is no point shorting this move now, but because there is limited upside in the overall index, one should only go long on pullbacks.