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.

Sunday, April 25, 2010

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.
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