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Wednesday, 21 December 2011

Position update

FFIV - got stopped out!!

Quick market update

SP500: still within triangle, has not decided yet where to go (short term higher highs, mid term lower lows). what still keeps me a bit more on the bullish side are the big impulsive up moves and the tiny long-lasting down moves.

Gold: after the breach of the triangle we might run into a falling wedge. we might be on the way to backtest the former breaking point before we head lower again. the long term up-trend is still intact. closed my short position again

US Bonds: TLT has formed a new short term high but has not reached the high from about 2.5 months ago. This might end in a double top pattern.

Current positions: CSCO, FFIV, AA, TBT and SIFY

I'm off now to Aussie land :)

Good luck and all the best for 2012!!!!

Sunday, 11 December 2011

SP500, Gold, Bonds, USD, Agricultural Commodities - Overview

SP500: Both my trading signals (based on VIX and Put/Call ratio) are still bullish. As expected, the major short and mid term trendlines above the S&P seem to be a tough resistance. Initially I didn'tl like the massive drop on Thursday. However, markets showed a nice reaction on Friday. In case markets shoot up I expect a massive resistance around the main bear market trend line around 1340. All bears will jump on that signal and go short.
US Bonds: In the long run the bond market is in an uptrend. However, it is way overbought. I expect falling bond prices in the short term. The most recent short term uptrend is already broken. Additionally TLT shows a nice double top pattern.

Gold: still in a long term uptrend. In the short term the triangle should break soon (price hit the edges 5 times) bringing gold prices further down. I hope this will go hand in hand with rising stock markets. However, gold and stocks were highly correlated lately.
USD: The USD is forming a contracting triangle now for about 6 years. I expect this index to go lower and eventually break this triangle in the near future. However, China for instance should have a massive interest in a strong dollar. If the Index makes its way above 80.50 I'd expect a retest of the upper boundary at around 87.50 which would send stocks down.

Commodities: still bullish on agricultural commodities

Trading ideas: short gold, short bonds (e.g. long TBT), long agricultural commodities.
Major warning signal: If USD index continues its recent uptrend and forms a "higher highs" pattern above 80.50.

Monday, 5 December 2011

Sunday, 4 December 2011

S&P - what to expect in December

It is still extremely difficult to make predictions. Technically the S&P is still in a bear market rally (as long as the upper white resistance line is not broken) but I still think that the conditions are not as bad as the market expects them to be. Both my trading systems are bullish. However Iran or Europe are always good to change this again.
As expected the last two trading days showed a sideway to downside trading pattern. The S&P made it to the first resistance line and bounced back down again.
After last week's rally the markets are still far away from being overbought. The S&P is still sitting on the 61.8 retracement and is facing major resistance levels on the upside. However, December is usually one of the strongest months. If the technical side doesn't provide reliable signs it might make sense to have a look at other markets.
In my opinion the bond market has found resistance and is about to form a double top (which is equal to a support for TBT, double bottom) and should be able to provide the necessary cash for the stock markets. It just retested its broken short term resistance and will hopefully break its 50d MA soon.
Additionally as long as the USD index doesn't confirm its recent short term up trend by a new high the long term downward trend will be dominating sending the index down and the stock markets up.