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Sunday, 29 January 2012

NFLX - interesting chart

On the weekend friends told me that they recently joint Netflix and so did many of their friends. Way better deal than So far I really liked the Lovefilm deal. Additionally I had this stock already in my watchlist as its chart looks really interesting: downtrend is definitely broken. It started already it's uptrend with high volume. The question now when to get in. Depending on the market I might take a small position tomorrow already. However, I'd prefer a small pullback first...we'll see.

Tuesday, 24 January 2012

Monday, 23 January 2012

Position Update

Took a short position in Gold and in ORCL. Both with relatively tight stops.

Sunday, 22 January 2012

My short candidates are...


Let's see if they are triggered.

US Dollar Index

Usually the USD index is negatively correlated to the S&P. Lately however, the correlation was strongly positive. Investors believe in the US economy again which results in big money flowing into the US. In the mid term I expect the uptrend in the USD index to continue. In the long run however we definitely go south.

Market overview

Finally back again from an amazing holiday in Australia...Stocks made a nice move up.
What happened?
Despite a downgrade of several European coutries investors seem to find their way back to stocks again. There are several reasons: America's industry, still the leading benchmark for stocks, delivers promising data, companies provide good quarterly reports and good alternative investments to stocks are missing. On the other side there is still the European debt crisis. However, investors either start to believe in the reforms or they don't care about this issue that much any more. North European indizes and Germany belong to the top performers in 2012 so far. This however, also fundamentally makes sense. German blue chips make almost 50% of their business outside the EU and about 25% within Germany.

What to expect now in the near future?
S&P: The sound short term uptrend is facing now the mid term downtrend resistance line. All investors are aware of this line and most of them probably expect the S&P to bounce to the downside from there. Additionally many indicators show an overbought market. I expect a small bounce to the downside. But I'm sure this line will fall soon. Many investors are already short in expectation of a falling market. As soon as this line falls the market will jump up since all these shorts have to be covered.
Bonds: TLT is still in kind of neutral area. However, TLT failed several times to make a new high resulting in lower highs. A first reliable indication that the uptrend in broken would be a break of the red line on which TLT is sitting right now. I expect it to fall soon.
Gold: Gold is running into a huge falling wedge which started in Sep 2011. In the short run we see a properly developed rising wedge which is about to break soon. I expect a break of the rising wedge resulting in a minor drop of about 5% (probably together with stocks) to the red line from where the price will bounce up and breach the falling wedge resulting in rising prices (together with stocks).
Strategy for this week:
stocks: In expectation of a consolidation i will set tight stops to my long positions. Additionally i might look for a few stocks to short.
Bonds: In case TLT will move below the red line i consider to increase my position in TBT.
Gold: I probably won't trade the bounce to the downside. I wait for a good opportunity to go long again.

Good luck!

Friday, 13 January 2012

Went short BBBY

Why? Uptrend might have been broken with recent spike down, huge gap to the downside with huge volume is closed and might serve as reliable resistance (which is equal to a backtest of a huge broken rising wedge), negative divergence with RSI and MACD started in April '10, might end in a double top, markets might consolidate.

Stop @ 64