Lessons

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.

Wednesday, April 28, 2010

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.
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