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.

Thursday, August 26, 2010

Not sure

Not sure about longevity of bounce. We may be headed down into the 900s. I may exit longs (at least partially) on a good bounce. We'll see. I may sell September calls agains the December ones.

On the other hand, the dollar isn't going up at this time (from the little I can see of price action while working at another job 12 hrs a day) and I am a LT equities bull.

Monday, August 23, 2010

Bought BIDU, TYO

Bought Bidu December calls at BIDU 79.5. Stop 76.5. More downside possible, but that's fine.

Bought TYO at 42.5. Contingent stop 40.00.


Friday, August 20, 2010

Just bought BIDU, EDC. Trying to buy TYO.

BIDU December calls; EDC, and EEM December calls.

We may not bottom until mid next week. I expect to modify these -- sell on rallies and buy dips for the next few days -- while maintaining a core position.

Thursday, August 19, 2010

LT Trades

I am close to intermediate-term trades in shorting U.S. Treasuries (TYO) and long(ing) emerging equities with EDC. (Within 5%). These will probably materialize some time next week.

Wednesday, August 18, 2010

s.t. con fu sion --> l.t. clarity

ST

1. Bond rates (TNX, TYX) are close to strong resistance, suggesting a strong move up in Equities.

2. EURUSD is toppy, suggesting a move up in the dollar, which generally would correspond with a strong move down in equities.

3. Continued bounce in equities and EURUSD for now? Next week, I think dollar jumps and we bust through resistance on the bonds, fall to 1050-1060 in equities. Bonds go up in last-ditch fake out top.

LT

The best trade is long bond rates. I think we could go up a little more in bonds, but shorting bonds across the western world is the LT trade.

Sunday, August 15, 2010

SPX; EURUSD Update

1. TRIN quite oversold on a ST basis; also this is Opex week. Bounce soon? Daily slow Stochs on RUT are already below 30; Slow stochs on Bonds are at 70.

2. EURUSD may bounce soon (from 1.2600 - 1.27 to 1.300), but ultimately may go down to 1.245 or so (61.8% retrace of recent up move).

3. Strong dollar (weak Euro) will create headwinds for SPX. SPX down to 1060 then up to 1100 or so, then down to 1040?

4. Copper could easily fall 2.5% from here before support.

Conclusion: ST bounce likely but there is more to fall before support. Short with Euro Puts or BGZ.

Friday, August 13, 2010

Sold YCS at 17.90

Still expect further strength in USD/JPY but at ST resistance, also want to free up capital.

Wednesday, August 11, 2010

Short JPY

Bought YCS at 17.35. May add at lower levels. Target around $19 but to be refined.

Friday, August 6, 2010

Short SPY at ES 1111 - Wow!

What a close.

I guess the market is telling us that QE 2 is coming after the Fed meeting next week. Shouldn't try to short a market with NAAD 10 MA this high. Should have known.

Will trade out of part position at close to break even if possible; purchase Puts again at around 1130 or so.

The Big Question Is:

Is Deflation bad for equities in a zero interest-rate environment, with QE 2 looming around the corner?

I think we saw a high in the SPX and may see another one later this month after QE arrives. I will start shorting the EURO at 1.34 or so. The EURO should eventually go higher, but the SPX may have another top later this month. The NAS may have a lower top or double top later this month.

SPX predictions: 1113 (August 12) - 1095 (August 13) - 1102 - 1080 - 1140-60 (before August 25).


Change of Mind - OUT of SPY at 1107

This may be it for the SPY, for the time being. Still long the EURUSD, though.

ES may go up to 1110, but then down to 1095 minimum. EURUSD is going to 1.335 or 1.34 before a breather.

Long SPY at ES 1109.5

Will try to go more long at 1105. Target 1130 or so.

LONG EURUSD at 1.32 and 1.324 target 1.34

What the commodities market is telling us is that: thank you, United States, for the terrible data, but you're not THAT important. You might catch up, eventually. Until then, watch my rear end.

The world is pulling the U.S. along, and it's not the other way around. Horse - cart switch.

The SPX will not crash until the EUR reaches 1.35.

Wednesday, August 4, 2010

State of the Market (SOTM)

1. BIDU still going up like a rocket.

2. QQQQs really ST oversold - as seen from TRIN.

3. 50% of crash resistance at SPX 1120. Big resistance at 1128.

4. AAPL not listening to BIDU's call.

5. EDC not going up after big day.

6. EURUSD definitely taking a breather. Down to 1.31 definitely and quite possibly to 1.304.

I will long EURUSD at 1.304 and 1.31. EURO is in Wave 4. This will be choppy. Short starting 1.345 or so. 1.35 will be big resistance.

I think August will be choppy for the SPX and we will form an intermediate-term top. Shorter-term trades in August might be fruitful if bought at the margins: for instance, long SPX at 1100-10; short 1130. Starting 1130-1140 I will probably start building a longer-term short position.

Correction: I may start building a longer-term short position. At the moment, I am more inclined to go long in the 1100-1100 range on SPX and the 1.295 - 1.3115 range in the EURUSD.

Tuesday, August 3, 2010

Closed EURUSD short; long for a quick bounce at 1.3202

Now out of EURUSD long at 1.319.

Will stick to swings from now - no day trades.

Won't go long EURUSD at these levels. Too overbought. May short again at ES 1130.

Sold AAPL Calls at 259.5; EDC at 29.6

Too early obviously. These were yesterday's trades.

The SP500 should go to at least 1130 before resistance.


Initiated one-third short EURUSD at 1.325

Closed out EURUSD long at same price.

I plan to add to this position at higher levels, if EURUSD goes higher.

This is a ST trade. Still bullish on EURUSD until at least 1.345.

Sunday, August 1, 2010

Commodity Markets, AUDUSD indicating that QE2 may be coming

Also take note of Fed Bullard's statement last Thursday. Fed meets in 1.5 weeks, but announcement could come any time before then, including this Friday.

Watch out for the helicopters.