Click chart to enlargeThe chart above shows a potential new uptrending channel for the market. It's too early to call it a channel yet, and the last time we started a channel like this, it failed to hold. If we can put in a higher low and a higher high, it is possible for us to remain in this uptrending channel until we get close to the 200dma. On the chart above, the 100dma is shown. This is a lofty enough goal for the time being. If we can put in another higher low so that we get 3 points to connect, we'll be able to do some more aggressive buying on the next drop because we'll have a clear buy and sell signal, the break of the channel being the sell signal. We're going to add some more DDM and SSO tomorrow. We should be able to buy it back cheaper than our most recent selling price for DDM which was 38. EEV is going to damage us now, no doubt. We bought it at 92 and sold half of it at 102, making 10 points. It looks like we'll be down 20 points or so on the other half thanks to China's bailout announcement. This reminds us of the days where shorts got burned each time the Fed suprised the markets with a rate cut or bailout announcement. Now China's doing it. Great, huh? Is no hedge safe anymore?
10 comments:
Here's a trading idea... Buy hk22's Direxion BGU (3 times Ultralong) tomorrow. If we stay in the channel, there should be some money to be made there.
FXI will be good for now
There is some expectation on other boards that the mkt will soon retest its lows to complete a small inverse head and shoulders, bringing DDM possibly below the channel lines yet not voiding the channel. May be self-fulfilling prophecy. Do agree that the mkt is most likely to take the overall direction of channel as drawn, through most of December. Obama cabinet positions will provide some clarity which mkt will like, and most of earnings reports out of way till early 09.
This is a test.
Article on which ETFs might perform better with Obama.
http://www.smartmoney.com/Investing/ETFs/Use-ETFs-to-Build-Presidential-Portfolios/?afl=yahoo
Looks like your gonna dodge a bullet with the chinese stimulus. Only a 4.5% rise which is their average daily move anyway. FXP probably wont drop too much at all now.
Its a mystery to me how China can inject that much money into its economy and the market fail to react completely. I wonder why...
The stimulus is going to be old news tomorrow.
You can't cure cancer right.
My comments sound bearish because I have an open position in FXP.
Snots suggestion of BGU might be good to hedge my FXP position.
The problem is that my FXP position is a small % relative to my cash balance so I don't really care to hold it a couple of months till it hits 180 or add if it ever hits 50-60.
I went to the casino last night but this is way more fun ;-)
Conor,
Some of the news about the stimulus package was priced in near the close on Friday. FXP fell a disproportionate amount relative to the Dow or S&P's rise. If ever you wondered if the playing field is level or not, there's your answer. Goldman Sachs knew late Friday. Everyone else knew yesterday.
i just bot back the fxp shares i sold ah friday @77 for 67. if it falls to 50's today i will add a few more. sell off not as bad as i expected. still underwater, but no sense selling the bottom. anyone else taking the bait here?
With all the gov't bail out their stocks around a world. I am still sit in on the sideline and have not committed to any large positions. I think gov't have to let market work itself out of the trouble. Stimulus is only good for the short time trade...
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