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So far, the SPX close below 1450 is looking like a fake out, which makes S2 at 1450 (the area I’ve harped on about so many times) valid support despite its breach yesterday.

Either we’ve bottomed, or the market sets up a good shorting opportunity as long as SPX stays below 1484. I ain’t shorting. I did go long AUD/JPY at 98.05 and I’ll ride the rally as far as it goes (target 100.1).

The only thing worrying me is that this bounce was the one that everyone expected.

That being said, we might get one more retrace on the SPX in a week or two, but I’m not holding my breath.

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I hate to harp on about old charts, but my Nov guess was spot on notwithstanding yesterday’s downside fakeout. How the market bounces here determines where it will go from here.

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🙂

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Of all the places, they decide to close the market here:

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Itching to go short here, but I just can’t.

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I’m still holding the belief that the market will probably bottom somewhere around SPX 1450 (or 1438/1433 on an intraday basis). There is a possibility that it might hit S3 at 1414, but I assign that a low possibility right now.

As such, I’ll be looking for bottoming action in the coming days, and will be attempting to buy the dips at select areas on Monday for a hard rally upwards.

In summary, I’m looking for a turn in this decline. My guess this bottoming process may last until the end of Nov before a strong rally going through December (possibly to new highs, who knows).

I will also be looking for a possible bottom in the carry trade currencies, namely AUD/JPY.

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My homework appears to suggest so…

Perhaps the bulls could muster up a six hit combo to the bears in response to the beating they took on Friday.

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1449 remains support for the ESU7, with the next one at 1434.  I’ll be suspicious of any gap ups, but I would consider buying a gap down.

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Expecting a intermediate term top here for All Ords.

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I went long some EUR/JPY earlier and they’re doing pretty well now. Wish I had bought more though.
Update: I thought I had a decent chance at playing the volatile GBP/JPY pair and consequently got my teeth punched out. I think I’ll stay with the EUR/JPY and AUD/JPY pairs when it comes to partaking in the carry trades in the future.

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Here is my EUR/JPY long, which is still open.

Update: That was real gay. Some dipshit decided to unwind their position and took out half of my open profits by stopping me out.

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LT bull still in tact.

No bear market on the horizon, although we are still technically in correction mode. Monthly pivot is at 1488, which will serve as resistance given how overbought we are in the short term. However, I’ve been thinking that perhaps this rally can last longer than most people expect, thus who knows…It can go a long way, just like it did last summer. I think 1405 or 1430 will most likely hold on the downside. In the short term, I still favour a downdraft in the coming weeks, which should finish up this correction once and for all…or maybe not.

Short term chart/targets:

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Long term view: First chart shows the histogram is still very much above zero, which is a sign of a healthy bull market. Second chart speaks for itself.

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I could not be more wrong again about 5800 being ‘near’ the bottom. It dropped like a hot rock to 5600 and has pierced the trendline extending from the 2003 bottom.

It ‘looks’ like exhaustion selling, but I can’t find it in me to step in front of a freight train by buying. I’m scrapping my plan of buying the eminis as I suspect the US might go for a possible washout move as well.

Back on the sidelines with my cash. Preserve your capital at all costs for the next low risk trade.

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Update: Wow! Talk about selling exhaustion. I bought some panic (against my own advice) and put 20% of my cash to work, 5% on the QBE at 25.85, 5% on BNB at 18, and 10% on ANZ at 25.85. I’m wary of buying any more right now, but I can’t rule out another sharp retest. Maybe the short term bottom is in. Long term: it’s lookin bearish.

Hope I don’t regret my purchases.

Update2: Just to let you know, I sold BNB at the near close for 19.5 and half of ANZ at 26.85.  Small profits to make up for my losses when I sold MFS and CGF a week or so ago.  So I’m 5% QBE and 5% ANZ.  QBE reports early next week, so I’ll be dumping it by the end of Friday regardless of whether it goes up or down.  I know QBE tends to surprise to the upside rather than the downside, but given its precarious technical situation, I’ll be hopping off it.  Hope we get some follow through buying tomorrow.

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Carry trade Update:

AUD/JPY Carry trade is still intact despite its ugliness. See chart below. Channel support.

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