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, May 10, 2010

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.

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