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, May 18, 2011

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.

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