GOOG morning, would you like an AAPL?

I think Goog at 630 and AAPL at 390 or so will be good buys for 10% up moves within 1-3 months. We should see these prices around Jan 10. I will probably buy April or May calls and also go long in my IRA via TQQQ and TNA.

I think GOOG will go to 700 and AAPL to 440-480, depending upon Jan quarter earnings.

Some smaller equities will go up more but Goog and AAPL have very liquid options. FSLR and TSL may double.

I am saving money to buy around Jan 10.

Trade

I plan to go short /TF and SLV around ES 1265 (TF 750) and will pull all shorts by 1210-1220 (or DX 85.7 and VIX 28). I would be super happy to get that trade.

Getting Bullish? Sure, but bearish for 2 weeks

SPXEW suggesting further downside.

/DX will breakout soon. Going to 90.

Like SPXEW, TNX suggests further drop soon.

Jan 15 should be a nice low.

2012 will be good.

Chop in the next week, then up like a rocket.

Bullish

Buy TNA at RUT 720 if possible.

Buy TSL at 7.20 if possible.

Short term

Confusion

Watching DX, TNX, TSL

/DX about to break out? But TSL looks bullish! Could easily be a fake out.

I think AAPL at 383 ends bounce.

Buy America?

The following is a comment I recently made at bluechipbulldog.blogspot.com.

Something very interesting is happening on longer term /DX (dollar index) charts. Monthly MACD is making a bullish cross. Also, there is a strong, class 1, MACD divergence. A close look at a 20 year DX chart suggests strongly that the next LT (20 year) move will be a very strong up move. On the daily charts, we are at ST resistance, but a cup and handle continuation pattern should overcome this.

Unlike in the recent past, this /DX bullishness may not be bad for equities. As Brinkley has pointed out, very often currencies move in direct correlation with equities, of the same country. Jack (Springheel - channelsandpatterns.blogspot.c...), showed, in a recent post, how this positive correlation affects equities in the short-term.

To me, this suggests that longer-term, we are entering a buy America stage. I know that most of you Americans will think I am crazy for saying this, but charts don't lie. By "buy America," I don't mean buy American equities. I mean buy land or property in America, or buy the dollar. This makes sense to me on multiple levels, fundamental and technical.

Equities will probably stay in a bear market for another 1-3 years, but 2013/2014-2034 should be a super bull market in equities (akin to 1980 to 2000). The bull might even start 2012 onward, but I currently prefer the 2013-14 outlook. Regardless, we should get a major low in 2012, along with a DX high around 90. The equities observation is based upon a simple 100 year cycle analysis of major bull and bear markets.

If I am correct about this, the DX should hit 90 within a year or so (and probably much sooner). This may just happen by Spring 2012. I know that most on this blog are ST traders (as am I). However, most of us also buy and sell property and get fixed or variable interest loans. So this may be relevant.

Buy List

Buy price 1, 2; target, position size

TNA ... sell TF 770; TNA around 53.5; first target - eventual target around 60; 20%?

TSLA 31.4 ... sell 39.5; 15%

FAS 14.8; first 16.9; then 21 or 22. 40%

LEI 1.78 1.84 sell 2.25 eventual 2.50; 15%?

C 31.4 ... sell 34.2 then 38

TSL

JKS

TZA

Will sell part position on TZA tomorrow at 32.3 or so.

Will buy again on bounce.

Am targeting 700-710 on the RUT.

More Movies!

On Monday, I will sell F and LEN to buy more movies!

NFLX

Plan to buy some movies tomorrow!!!

Bull and Bear

$TNX, $WTIC (oil) and interestingly the TRANniesare suggesting a bullish case. Bullish MACD divergence on the daily suggests upside. Same with the basing patterns on several equities.

Copper and Base metals are NOT looking great. That is the major bear case. The dollar is looking strong. The 60-minute suggests further strength to come. Longer-term, the dollar may have bottomed.

Possible that Copper and Base metals are looking weak in part because of dollar strength.

NFLX

Down to 109. something and then up to 136. Will sell at 115, buy 109.

F, TSL and JKS still strong buys. ES 1161 may bottom this leg down.

Summary:

Will buy NFLX 109.

Will buy JKS 8.3

Am Long ZSL until tomorrow.

Update

I will keep pushing long until 1260 ES and new highs on the NDX (2425). Take profits and reload. Keep watching the NDX and the RUT.

1. TSL target 15.65.

2. JKS Target 13.

3. FSLR Target 90-100

4. NFLX Target 150 then 200. will try to buy at 112.4 or so.

5. TNA?

6. AGQ? at 120 (target 140) or AG at 16.2 target 20.40.

Update; Solars

1. long ZSL at 13.94; Plan to sell around 22.

2. Will go long AGQ on Wednesday at Silver 25 or so.

3. Will buy one or two of the following: TSL; JKS; FSLR.

4. Will buy TNA at Russell 640 or so.

Update:

1. TSL at 6? target 15.65. Try 6.5. 6000

or

JKS at 6? Target 13. 6000

2.FSLR at 60? Target 90-100 6000

NFLX at 120? Target 150 then 200.

3. TNA at Russell 640 - not happening. sorry. Try 653. 8000

4. AGQ at 120 (target 140) or AG at 16.2 target 20.40. 5000

My current view of the market is that we are setting up for a big move up. Big. Especially in the NQ. Look at the NDX chart. It is a thing of wonder. I wouldn't be surprised by new highs on that chart.

Silver, TSL

Next Tuesday- Wednesday, I will probably buy AGQ (double SLV) at Silver (at 25.6) and TSL (not sure about the price yet).

I will also buy SOXL. Not sure about price.

Tomorrow (Friday) I will go short the market via BGZ and possibly ZSL.

After next Wednesday, VIX is going to 19.8, with a brief stop at 30. VIX 3 month Puts would be an awesome investment for those interested in options.

TSL, BGZ

- Will try to buy TSL at 6.07 tomorrow; ST target is 7.80.

- May also try to buy BGZ at SPX 1140. Target is still 1030 or so. This will take guts, but I believe that this is the right trade. Even if we don't go all the way to 1030.

Positions

1. Have been short via TZA from Tuesday (bought 45.6). Sold too early today - at 49.5.

2. Will try to buy again around 50.2 or so. Targeting 64-65 on TZA in 2 weeks. Will exit at about 1020 on the SPX (about 12% down from current levels) on the Dow.

3. Making a list of stocks to buy in two weeks (around October 12).

I am looking for doubles in 2-3 weeks from date of purchase. Looking at TSL (at $4 or $5, not sure), SOL (1.6o?), JASO ( ),... These guys are trading at 3-4 times earnings, and have 6-7 days of short covering in them. May not buy at the bottom, but will try to buy around October 12. I think these guys will double (or more) in the two weeks of earnings season.

Warning: I think many of these have another 20% downside, so I definitely am not buying now!

TSL (at $4 or $5, not sure),

SOL (1.4o?),

JASO ( ),...

ANR ($15 or so)... target $30. A coal company and I hate coal, so maybe I won't buy. :(

UPDATE 9/30:

Currently considering this allocation: TSL 25% (at $5); ANR 25% (around $15); SOXL 50% (around SOX 286 or 302).

update

Bullish:

$TNX is looking ST bullish.

Our business is booming.

RUT is decently strong.

Some equity valuations are dirt cheap, especially when compared to expected bond yields. Intelligent, long only managers should be buying here.

Bearish:

Today is new moon.

SSEC broke bear flag, leads SPX.

NYA and RUT both broke bear flag, look to be retracing to the line of the break.

Conclusion:

Further strength in the RUT would indicate that we are going to 1250-1260 on the ES. That would be a monster fake out for the bears.

Tomorrow will be the tell.

TNA

Will try to buy on Tuesday at 37.5 or so for a trade to 42.50.

Edit: Will try to buy between 38 and 38.5.

Actually,...

Perhaps looking to go short. Not sure. Will watch Monday's action.

Closed Shorts; Looking to go long

Looking at these:

TNA

YINN

TXN

Outlook

1. Hammer on the 10 year note:

http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=1&mn=0&dy=0&id=p71267183058&a=235052232

2. At all time lows (December 2008) on the weekly.

http://stockcharts.com/h-sc/ui?s=$TNX&p=W&yr=4&mn=5&dy=0&id=p44608524031&a=234623991

3. Hong Kong (HSI) at 38.2 retrace of entire bull market and good support. HSI is a leading indicator, IMO.

http://stockcharts.com/h-sc/ui?s=$HSI&p=D&b=1&g=0&id=p68835916138&a=241970015

4. SSEC shows positive divergence with SPX.

5. /ES bounced off 61.8% retrace of 1100 - 1206 move.

6. $COMP at double bottom levels.

I think possible bounce hereabouts - to SPX 1220-1250.

Then, in September, a lower a low in equities and a higher low in bonds and HSI. Similar to October 2008 - March 2009 divergences.

If not, double bottom around 1090-1100 and bounce to 1190-1200.

Just my 2 c.

New Trades

Bought TZA at 47

Sold TZA 52.5

Bought TQQQ at 57.31 (/NQ 2094) - This is probably a ST trade, but not sure.

This is how I'm playing it

/NQ goes to 2260.

/ES to 1220-1225.

DNDN to 20.3 (about 90% gains from here). First stop 16.40.

Edit: Reconsidering DNDN now.

Lessons from this crash

1. Rely on my own analysis.

2. Meditate.

3. Be comfortable with not doing anything.

Hi there! Having fun yet?!

I think the fed will wait out the panic tomorrow. Then when things have stabilized (next Tuesday?), and the bounce has started, the Fed will kick in with news about QE 3. That's when it will be most effective.

Tomorrow we see 1180 or so on the /ES.

Then over the next 30 days, we're going to get a monster bounce. Within a month or so, we'll be at 1320 or so on the ES. Then we drop. And wait and see.

ST ES (S&P E-mini) Roadmap

1264 (today/tomorrow August 2/3) -
1280 (tomorrow/Thursday)-
1220 (August 15) -
1250 (August 30) -
1150 (September 15).

Big Picture

1. Breath is weak, and has been getting weaker, as happens before the end of a bull market. The NYA closed below the 200 day and will have resistance above now. The RUT closed barely above. The NYA and other indices have large H&S patterns. The $BSE has a target of at least 16,000 (IMO). And Gold as been on a tear. Also, short-term, we are now entering the down phase of the moon cycle. New moon is here; we are headed for a full moon. This indicates further bearishness to come.

However, before a bull market ends, sentiment is usually very positive. We haven't had very positive sentiment since March or April. Of course it's possible that we are already in Wave 3 of the bear market, and March/April was a top.

However,

2. A few indicators indicate that we made a short-term bottom today (or will do so Monday/Tuesday). These are divergences on 5 MA and 10 MA of advancing stocks on the NYSE and on New Highs (positive divergence in New highs but not yet in New lows. The Russell printed a hammer.

3. A few other indicators (VXW:VIX) also indicate a bottom, perhaps an even longer term bottom.

4. At this point, I plan to go long on Monday or Tuesday. I will be careful with longs. Whether we are in a bull market or not, I think we get a bounce here or Monday. After the bounce, I will likely check out and consider going short.

Monday, Monday morning

1. FAS at 24.7

2. SVM at 11.3 (top pick)

3. AG at 24.4 (top pick)

4. YOKU at 34.3

5. AGQ (at 214?) top pick.

Silver is at $41 resistance. If it breaks through, it's going to 50. I think it will break through, possibly with some hiccups. A lot depends upon this stupid debt deal.

Thursday

FAS at 23.6

TQQQ at 86.8.

AGQ at 214?

YOKU at 33.5?

Wednesday's Plan

I may buy only one or two of these.

Buy BGU at 83.2.

FAS 23.2?

Buy SVM at 10.9

AG at 21.8 - 22.5 zone.

Sell SOHU at 86.2 or so.

BAC at 9.3

'Response to John Mauldin's Most Recent "Thoughts from the Frontline"

This is a response to an article that can be found here:
http://www.johnmauldin.com/frontlinethoughts/back-to-the-basics/

Sir, you say: "The following graph is from today’s Wall Street Journal editorial page. They use it to show how much Democrats allowed the budget in terms of GDP to rise and spin out of control.// I would point out that in the 8 previous years, under Bush/Hastert/Delay et al., there was also a rise in the growth of government, as the chart shows. While it was not as large, it was clearly there."

This clearly shows your partisan bias. If you had taken a moment to question the WSJ's graph, you would have realized that the Obama-Pelosi congress had nothing to do with the budget increase until late 2009, well into the parabolic phase of that graph. There were two fiscal stimuli in 2008 under the Bush Administration: the $168 billion tax cut and $700 Billion TARP in October 2008. The funds for the latter bailout were disbursed in 2009. The Obama-Pelosi administration did pass further budgetary stimulus in 2009 (The American Recovery and Reinvestment Act) totaling about $880 billion, and funds were disbursed in 2009-10, but that was about half of that parabolic climb. That second stimulus is responsible for the little (and much needed) road reconstruction we have seen in the DC area. Thank god for that!

Further, please examine how your data about government investment verses growth rate functions when analyzed properly, with a lag of 3-5 years in GDP growth. How do you think China has achieved its stunning growth rates over the past 20 years -- from private investment? Really? How do you think America was able to boom from the 50s to the 80s. Hint: The answer has something to do with infrastructure. Government investment has been responsible for highways, education investment, and military and space technology, all of which led to subsequent massive growth in the private sector. As you perhaps know, sir, the internet was not discovered by Al Gore. It was jointly discovered and developed in the military, the National Science Foundation (NSF), and several universities including MIT, Stanford, UCLA, and Harvard. University research is subsidized by... you guessed it ... Government Spending!

RSP:SPX

I think in Wave5, as breath thins, it is natural for RSP (equal weighted SP500) to trail the S&P. The RSP:SPX chart looks ghastly right now. If you look at it in isolation, with MACD, you'll see a declining channel. However, IMHO, what you see is quite common in the beginning of Wave 5. To see a complete Wave 5 comparison of RSP:SPY and SPX, look at this chart, from 2005 to 2008:

http://stockcharts.com/h-sc/ui?s=RSP:$SPX&p=D&st=2005-05-18&en=2008-01-16&id=p51575768793

Note that RSP:SPX peaked in around March 2007 and the October highs in the SPX didn't even make a dent in RSP:SPX ratio.

Now look at the same chart for the past 2 years.

http://stockcharts.com/h-sc/ui?s=RSP:$SPX&p=D&yr=2&mn=0&dy=0&id=p67588881632

PMs

Buy AG around 21.

AGQ around 193.

I think we get a little more downside in the indices today and tomorrow.

Master Surfer

http://bluechipbulldog.blogspot.com/search?q=master+surfer

PMs

Probably Buying on Weds-Thurs

AG $19

AGQ $170?

AAPL? TQQQ?

Bounce not done, but after bounce more downside ahead

SPX, BSE, SOX, RUT should come down significantly further than these lows.

QQQ could double bottom at a slightly lower point.

1280 ES is buy zone

I plan to buy EDC around 36.7 and INDL around 38. Probably BGZ or SOXL around ES 1280. I'm long a small position of AGQ.

Positive divergence in SOX vs. SPX, EEM vs. SPX, AAPL vs. SPX, etc.

Also look at /NQ (NDX) circa 2256 (or 2007) highs. Very strong support.

This is a great buying opportunity, at least for the short-term.

CORRECTION: I believe that this correction may end around 1250 SPX or 2200 NDX. Accordingly, bounces can be shorted. However, we should still see a bounce on Monday.

Best Guess

SPX goes up to 1375 - marginal new highs - before fall. This happens around May 25.

Then we get another fall to SPX 1220-1250 or so.

I may buy a small position around SPX 1328, if we see it tomorrow. Strictly ST trade. Stop 1320.

Sold EDC, BGU, QQQ calls today.

ST Bullish; IT not sure; LT bullish

I am very short-term bullish. (3-5 days).

Beyond that, I am not sure.

Intermediate-term, I am not sure. We may need to go back to the 2007 highs on the QQQs and NDX before further upside. That is another 3-6% down.

I am long the QQQs, BGU and EDC until resistance.

I plan to short the EURO at 1.44. It may get to 1.45 or so before falling further.

Emerging markets (EDC) may be at or close to a bottom, though. Rates also, may bottom soon. Both tend to lead the SPX by a little bit.

The NDX also tends to lead the SPX.

Outlook -- Look at the NQ (NDX)!

Silver and Gold should get a good tradable bounce. GDX is at support. Will try to go long AGQ here - for a trade - at 169. If I miss it, oh well.

Short-term NQ (NDX - Nasdaq) has more to fall, but Intermediate term charts look bullish. Maybe a bounce in the next couple of days.

ES should fall to 1320 or so before bounce -- along with NQ.

Dollar may be forming a nice, tradable inverse H&S. Or it may just rise until overbought.

Watch: TSL, AGQ, EURUSD.

Best Intermediate-term trades:

1. Short EURUSD -- look at DX for levels.

2. Long NQ at support 2300 -2330 range.

3. Long AAPL at support 320-30 range?

4. Long GDX - now! at very good support!

Equities

MT picture is now bearish.

I am looking for a bounce to short to the 1320s.

Silver - should get a shortable bounce soon.

Silver Dollar

Silver will bounce from the 40-42 zone. There is strong support there. I am expecting another run up to the $50 range, and possibly higher.

Dollar is starting an up leg, at least in the ST.

More Upside in Equities Likely

ST bounce in equities likely from nearby levels.

1. Out of TZA at $35.3.

2. Still in ZSL. Average price $18.15.

Update

Lowered Average ZSL price to $17.6. Now down big on this trade. Silver is parabolic, which means mean reversion is likely, which means this trade has now become a 1-3 month hold. I am at full position size, but will try to sell bounces in ZSL (and buy drops), to bring down my purchase price.

Change of Direction

Equities are setting up for a withdrawal of liquidity, in anticipation of the end of QE 2.

FSLR and TSL recommendations are void. I should have posted this earlier, but have been very busy.

I stopped out of FSLR at 150 and plan to get out of TSL at around $29.

I am looking to buy TZA around $35-35.5. I think we will hit the Feb lows again.

ZSL would also be a good play, after a bounce in Silver. I am expecting Silver to retrace big. Will post targets after some work.

EDIT:

ZSL is a buy around 19.15- 19.30 zone.

TSL, FSLR

TSL at 26 and FSLR at 147.5 are top buys. TSL target is 48 in 1 month.

I am quite sure about these. Technically and globally, this is a top setup.

Sold TSL

Sold TSL at 27.88 - top of range. Will buy again at 27.1. This is a top buy.

Will sell SOXL if I get 52 today. Will buy again.

SOXL, TSL,

Bought SOXL at 47.5, ST target 53.

Bought TSL at 27.1. This is MT buy. Target is $47-48.

SLV, AGQ, SOX, URANIUM, UNG

Silver and Gold look like they're setting up for big shorting opportunities. Judging from the GDX chart at least. Silver is a short at 38.

SOX should go down to 410 at least. SOXS was a buy today at 61.7, but I didn't pull the trigger - work reasons. I may buy tomorrow at around 62 or 63.

I will buy SOXL in the 47.0 to 48 range.

Uranium stocks may have bottomed today, and this is a MT buying opportunity.

Bought UNG today at 10.57. ST target is 11.00. Will get out then and reassess. This is also a LT buy, according to the chart.

Correction should take us to SPX 1280 before a bounce.

TLT at 90-91 range is a buy.

1. May buy TLT calls or TBT Puts at HOD today or tomorrow.

91 is buy zone. Not 90.

2. RUT to 840 may be a good ST long.

Change of Mind

Equities to continue up until Thursday/Friday.

Will stop out of TZA tomorrow, take profits on SOX.

SOXS at 51.7; TZA at 38.7

May be too early on the TZA. Looks to me like we may get some more upside until Thursday-Friday.

SOXs is at a nice profit and may take profit around 35.2 to reenter later.

TZA is part position; may add if RUT moves higher. Stop is above Feb highs.

NFLX still looks like a good short. Would've been better $10 higher.

TLT, SOX short, AGQ long

TLT is a buy at around 91.56. TBT Puts can be bought around 38.8

Indices are nearing a major top.

I may risk a SOX short via SOXS at 49.8 or so. Stop 48.

/DX nearing a bottom of sorts. Non-farm payrolls on Thursday/Friday?

AGQ is a long at 166-169 zone. Target at least 195.

Trading Axioms

http://www.ritholtz.com/blog/2011/02/the-zurich-axioms/

INDL long?

INDL long Monday?

Maybe.

Prognosticating

So far, I am treating this as a two wave decline. Dow and SPX will touch the 50MA at least. Bonds (TLT), which are in a bear market, will retrace at lease 23.6% and possibly 38.2%.

However, there is a distinct possibility that this is the start of something somewhat bigger. the NDX is at the 50 MA, and did breach it. It could sink a lot more than the others, quite possibly to the 2007 high, at 2210 or so, another 4% down from here, for a 10% correction. There are major divergences in the New Highs and other breath indicators, both in the short-term and in the intermediate-term (from the April and November highs). Also, there was increasing complacency in the trading community and the blogosphere - do stocks ever go down, was a constant refrain.

The safest policy is to go long bonds TLT upon a bounce in equities. Shorting NDX may also be worth exploring, as might shorting SOX or other erstwhile high flyers.

However, if this was the beginning of something bigger, I do expect there to be a substantial bounce before another fall. At major tops, drops are initially bought. There is a great deal of volatility. This is a ST buying opp, not a selling opportunity.

My Biggest Faults

1. Knowing how and when to stop out.

2. Taking on too many trades.

TLT, AGQ

Looking to re-enter TLT around 90 - 91 range.

AGQ 165.3; Silver $31.9.

Looking for shorts

Will wait for good levels.

Out of TLT long, but will re-enter around 90.

The Big Picture

Remember the big picture:

Year 3 of Presidential Cycle.

We went up too much too fast. Much of the gains are already made

QE 2 continues until June, then QE 3.

Bonds are indicating that we are at the beginning of a larger correction - uptrend in Bonds.

This decline could easily become a 5-10% correction with the larger uptrend fully intact.

Emerging markets are still in free fall.

In the bigger picture:

It's very unlikely that we came all this way to stop before SPX 1360 and RUT 852 (double/triple top).

Finally, in the even bigger picture, this is a bull market in equities correcting. Remember, in the very big picture the bottom was 666. This is all a bull market. And we have crossed the 61.8% retrace on the SPX.

Buy DBA on the dips.

ST

I am long and looking for higher prices before the correction continues.

RUT 852? SPX 1260? Maybe not that much.

MT

Long bonds again at TLT 90.

LT

Still a bull.

VIX, Silver, ES, YM, TF TLT,

VIX is showing positive MACD and RSI divergence on the daily charts. Should go up to 21.4.

That's when I plan to go long equities.

Silver is a buy in the 31 - 31.5 zone.

Gold is a buy around 1380.

ES and YM (SPX and DOW) outperforming TF, NDX by a mile! Very interesting. Oil services, I bet. DOW ES very strong!

DOW, ES may become a global hedge. Not TF. Large cap US equities.

Bonds going nuts. I will stay long TLT calls for now.

PMs

Will try to get out and long AGQ on Monday/Tuesday. I think we will get a dip in Silver and equities next week. Silver is going to 35, but will hopefully dip to 31/32 first.

AGQ buy around 163.

GDX is going to 62 - 62.5, but will dip to 58.5 first.

GDXJ target 44.5; buy around 38.5. Look at AG.

UEC

Really hurting on this UEC trade.

Not only losing money but also could have made a nice 5-10% profit if I had trailing stops.

Instead I had a target.

Also blocking funds that I could have had in AGQ.

Remember that there is nothing as bearish as a failed breakout!

Will try to get out of position on Monday.

TLT update

Long TLT at 89.2. Should have waited. Will touch 89 and possibly 88.75.

Stop is 88.75.

TLT, TYD, GBPUSD

Looking to buy TLT calls at around 89; TYD at 51.5

GBPUSD may be a good short at 1.628 triple top.

Still also looking for bullish plays on pullbacks.

TNA, INDZ, UEC, JASO

TNA will go up to 92, but may correct at around $87. I went long from 82.55 and got out at 86.2, too early.

INDZ is a buy at 29.5 or so.

UEC - long average price 6.3 or so, getting impatient. Looking for 7.4 but may get out sooner.

Am long JASO from 8.1, target 9.2.

Long TNA 79.2

SOLD TNA AT 82.55. Will try to buy again on Monday. ST target is 83.9.

Edited - ST target is minimum 84.4, but quite possibly 87.

I.T. target on TNA is 92 - 93.

Today's list (What I may purchase)

AGQ at 148; target 156

INDL 36.2; BSE at very strong support. At least a bounce here. HSI is also at very strong support.

TNA 77.5?

Short GBP

SP will double top at 2007 highs

SPX will double top. That’s when the bear market will start.

Next serious pullback when the RUT double tops. For now, long RUT.

Plan to get long TNA today and tomorrow. Also looking at INDL long.

Best Method For Trading

(For me)

1. Find individual stocks that are the best patterns. Find optimal entry. Set buy order. Find exit. Set sell order. 5-15% moves.

2. At all costs, avoid shorting bull markets, except as a hedge, with a small position.

3. At all costs, avoid going long bear markets; same rules as #2.

4. Avoid shorting or going long indices. Find individual equities in pullbacks from the major trend. Remember, in a bull, individual equities (and even sectors) may double or triple while the overall index moves up by 10%. Don't be afraid of the work. If you can't find individual equities to go long/short, that means you shouldn't go long/short. Maybe the trend is changing or there will be a reversal soon.

5. Maintain 2-4 different positions. Don't put all capital into one position. This enables you to move on from one losing position. Always be looking for other positions; other equities.

6. Always know the exit point -- or where you will exit this trade if things don't work out.

7. Plan to make money in the long-term. No doubling in two weeks.

Barry Ritholtz on Shorting

from The Big Picture (www.ritholtz.com)

Basic Rules for Shorting Stocks

1. Shorting Momentum names is dangerous: Unless you are Superman, never step in front of a speeding locomotive

2. Valuation alone is insufficient reason to get short a stock — History teaches us that cheap stocks can get cheaper, dear stocks can get more expensive

3. ALWAYS work with a pre-determined loss – either a physical or mental stop loss — Never leave yourself open to infinite losses

4. Fundamentals tell you WHY to short something, not WHEN to short it. ALWAYS have some technical confirmation before shorting. Make a short selling wish list, then WAIT for technical confirmation. (We use Money Flow, Short Term Trend lines, Institutional Ownership, Analyst Ratings).

5. It is tough to be a contrarian: During Bull and Bear cycles, the Crowd IS the market.

You have to figure out two things:
…a) When the crowd is wrong — Doug Kass calls it “Variant Perception”
…b) When the crowd starts to get an inkling they are wrong

At the turns — not the major trends — is where contrarians clean up.

6. Look for Over-owned, Over-loved stocks: 95% Institutional ownership, All buys or Strong Buys (no sells), and 700% gains over the past few years are reasons to put names on your short selling wish list. (That is how my partner Kevin Lane found and shorted Enron and Tyco back in the 1990s).

7. Beware the “Crowded Short“– they tend to become targets of the squeeze!

8. You can use Options to either juice your short returns, or pre-define your risk capital (options)

Update

Out of 3/5 of short position at ES 1290; Still long Silver

Case 1 30% probability

The bear case:

ES 1310 is very strong overhead horizontal resistance. Look at a 3 year weekly chart.

NDX was rejected at 38.1 retrace of entire 2000-2008 bear market. NDX and GOOG charts look tired; time for a break.

Dollar is charging, finally.

Rally is very long in the tooth.

Daily RSI on the NDX is indicating a negative divergence. SPX too, but NDX is more clear.

Earning season over - sell the news.

Case 2: 45% probability

The bull case:

However, equity PC data is indicating a ST BOTTOM.

We may be making a bull flag under major resistance.

And a LOT of people seem to be waiting to get long.

And this is a godawesome bull market.

This may be the last leg up before the pre-summer fall.

Case 3 25% probability

I think there is also a possibility we see 1315 then a fall.

Plan now? See reaction to employment report. Prepare to take a loss on the remaining short.

Update

Will probably get out of shorts on a pullback. Still like Silver.

Update

SP may climb to 1290 and possibly double top at 1300. IWM will hugely diverge.

/DX is still weak, thanks to QE. This should put a bid under the larger caps, but not as much under the small caps.

I am short the Russell from ES 1283, after getting out of earlier shorts circa ES 1274.

Short until 1245-50 zone

I plan to stay short until 1245-1250 on the ES.

I am short via TZA. Sold IWM puts at 1274 ES but will buy again at about 1283.

Market Update

SPX down to at least 1235 or so.

Wave A down to ES 1261.

Wave C to 1235.

Gold up to at least 1375 or so.

AGQ 134 at least.

NDX may have peaked. Possible. Nice short for now.

SPX will double top (with 2007 top) this year or early 2012.

In mid Feb go long.

Next Month

1. Equities:

- I see a small bounce in the week ahead, then a 50 point drop in the S&P, probably from 1280 to 1230. Drop should start around AAPL earnings.

- From 1230, I think we rise to 1330 or so by March-April.

- In March-April, I think we start a 1.5 year bear market in the United States.

- Problem is that this is against the Presidential cycle, so I'm not yet sure on the bear market. Maybe we get an extended Wave 5?

2. Silver/ Gold: I am buying this correction with AGQ in the 138 level. I see us going up from here.

3. BSE can be safely shorted up to 18500 at least. Then we will get a big bounce.

Some of my Trades:

1. Long AGQ 138

2. Looking to short India (long INDZ at 26.2 or so).

3. Looking to short SPX (long BGZ at $8.4 or so).

Took profits on a quick long EDC trade this morning.

Took profits on short Silver trade.