Archive for June, 2009

A most interesting line…

Posted on Jun 29, 2009 by .

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090629spx

The horizontal trend line (we often call them signal lines) under the present formation (878.92 on our chart — ignore the yellow box with the 768.82 in it) is right on the top of Basing Points we identified months ago.

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Who’s afraid of the big bad 200 day moving average?

Posted on Jun 25, 2009 by .

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090625indu

The simplest, and simple-mindedest, moving average system is to buy when price crosses above the moving average and sell when price falls below the moving average.  Of course in mule, or sideways, markets you get whipped like a stubborn mule — or the mule of the Marquis de Sade.

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Erosion, like rust, never sleeps…

Posted on Jun 23, 2009 by .

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090623

090623fre

We bailed on C and scaled out of most of FRE.  The ability to set a stop and honor it is what distinguishes successful investors from those people who lost 43% in the great Bush bear market.  The profits on these trades ranged from 10 to 73%.  As we said when we bought them they were lottery tickets.  The markets are looking iffy at this point which is another reason for exiting.  Meanwhile our trades in F and BAC and even AIG are scandalously profitable, and there is no reason to exit them.

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Signals.

Posted on Jun 22, 2009 by .

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090622spx090622srs090622fazToday’s action (we speculated last week there would be shooting this week, and sure enough….) is a signal to add to the short position.  In additon to our black boxes, crystal balls, ouija boards and general hallucinagens we have a secret collaborator who lives in our ancestral home — with the billy goats gruff — Switzerland.  When the gnomes speak we pay attention.  He has suggested two trades we like the look of:  SRS and FAZ.  We will take some for our personal portfolios.  The risk is obvious.  Just under the nearby lows — about 2% we’d say.

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Teetering at the tipping point…

Posted on Jun 20, 2009 by .

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090619induThe present upwave, started in March is now 76 days long without a “correction” or downwave.  This past week the Dow was down 3+% in what might be the start of a downwave.  The upwave has rounded over and has not penetrated the all important high of January.  In the SPX this high has fallen, but not with sufficient strength to convince us that a new bull is at hand.  At this point we think a downwave is overdue, and we speculated the week past that a light short commitment was warranted.  But basically we are tepid both directions.  There is no evidence to support either direction at this point.  When the broad market indices are anomalous you must look to individual issues for direction and do what the individual chart dictates.  The question to ask is, would I buy this now?  Given that it appears a new phase of the market has started we wouldn’t be buying anything which didn’t hit us in the face with a show of power.  In short, everything is in limbo.  Perhaps we are waiting for the big put sellers to get out of their positions at the end of the month at expiration.  We will be pitching our positions in FNM, FRE and C if the lows of the last few days are taken out.  We bought them in the panic — along with Ford and BAC which look worth holding.  Next week could see some shooting (and not in Iran– or rather, in addition to Iran).

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