1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.
2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.
3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.
4. Don't worry about the last dollar. Take your money and go to the beach!
5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.
6. Buy the strongest; sell (short) the weakest.
7. Nothing is guaranteed. Nothing.
Saturday, February 20, 2010
Buying AGQ, BGU (Post in Progress)
Will try to buy these for a 2 week to 2 month trade, on a pullback on Monday or Tuesday, around 1100 on the ES. Conditional stop around 1090 on the ES. Target is ES 1200.
Reasons:
1. 13 DMA of PC ratio.
2. NYMO positive divergence on 1040 low was very similar to that on the March and July bottoms.
3. Bears getting squeezed.
4. This is Wave 3 of 5. It should last 2 weeks and take us to 1160 or so. Inexorable rise.
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