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.

Wednesday, February 23, 2011

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.


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