The broken trendlines we have been fretting about have come home to roost, like chicken little. And we have definitely started a new downwave. The power bar November 4 which finished in new highs was a bear trap. Excuse us while we get the teeth out of our leg. Well, as we said at the time you have to honor your method and for everytime that you get your leg caught there is another time when you take some money out of the hide of the contrarians. This time they won. Using warmed over Irish anxieties and tea party fears of downstream deficits they have managed to neuter a fair little upwave. That’s ok –contrarians only win in the short run. Trend followers always win in the end. We blew out our trading positions in the Qs and SPX
Five tradinjg sessions ago we opined that gold looked to suffer a reversal day. That was true, and it is even truer now. The upwave is broken and so we must sit through it (or trade it). The long term trend is totally unfazed by this reaction. It is yawning with boredom.
TLT has completely tilted. We went long in our personal accounts on TBT October 14 and true to our absent minded professor image have not added on. You should be smarter.
Don’t touch that dial. Important letter coming this weekend.