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.

Monday, April 12, 2010

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.

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