Click chart to enlarge The chart above is of OEX (the S&P 100 index). All of the indexes have the same formation, so this could just as well be the SP500 or the Dow, it wouldn't matter which. There is a clear ascending triangle forming on the indexes. Resistance has been well defined over the past 6 weeks or so, and the charts remain in a Stage 2 uptrend, trading above uptrending moving averages. It is our strong feeling that it will not be long before the indexes break out to the upside. We also believe that that final surge to the upside (the blowoff) will mark a top, for the time being anyway. But one thing at a time... let's wait and see if there's a blowoff rally first. If so, we'll be selling the rest of our index position and getting back to 100% cash.
7 comments:
Keep an eye on this chart. We're right at that critical threshold. A rally here would surely be explosive as it would break through this resistance. But are enough people really that stupid?
To insure against such an explosion, FXP Jan 8 puts (FVWMH) are only 25 cents. If we get a big rally in the next couple weeks, and FXI goes up 10% (to match its 52 week high).... well you do the math on that.
I have been quasi-retired for the past month or so, but I did make a trade this week. (Yep, you guessed it, another 3 bagger.)
Channel trade for your consideration. HAO uptrending and going through regular bounces (lately) off the 50 DMA and off the 40% RSI every (approximately) four weeks. At the bottom of the channel the last three days and headed up today it appears. Good luck to all. Merry Christmas and Hanukkah to all.
HAO chart
I think the NASDAQ is doping.
Thanks Joe, we'll check out HAO. Pulled the trigger on AIXG at 32.25, a very small purchase. Gets our feet wet and forces us to keep tabs on the stock. We're siding with Trump on the state of this market... it's gone too far too fast. Just a matter of time before people realize they're paying North of $3 again at the pumps and this market is going to drop back sharply. At that point, we'll back up the truck on the LED stocks if they continue to show high relative strength. Let's hope for an early 2010 rally in which to dump the rest of the ultralong index plays. No way 2010 is as good as the last 3 quarters of 2009.
Meant 33.25 for AIXG. 32.25 is stuck in our head as being the number from which our portfolio started when we began this blog. Not that the dollar matters, as we should be paying $17 for AIXG.
Here's someone famous that agrees with you, Snot.
correction coming then slow growth
Of course, there are always experts on both sides, but this expert is putting a lot of money where his mouth is.
Thanks for the link, Joe. We got the upside breakout for the indexes. Now let's see if this is their last leg up. AAPL looks as if it's blowing off, setting up for a decent selloff. We're going to start selling off the rest of our ultralong index holdings, and are primarily concerned with AIXG going forward. Its recent pullback provides the perfect entry point for those who wish to buy 5%-10% of their position. We don't feel that it's time to back up the truck, as we feel that the stock has outpaced its value for the time being. Overvalued momo stocks get hit the hardest when the broader market corrects, and we feel that we're in for such a correction sometime in Q1 2010.
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