CNBC has on its front page, if today was a capitulation bottom. Well we are close, but not yet there. We still have at least 2 more large sell time periods, which could potentially be more damaging than today. But the good news is a rally is close, as we said in the previous post.
Our plays - we will short on strength but with reduced position sizes. We covered some of our gold short, while letting the rest run with a trailing stop.
Good luck.
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8 comments:
I sold my SDS at 105.50...I couldnt believe it..I am going to get back in after a bounce S&P 950?
In the meantime I might get some SSO. I want some AMR but I am going to wait until it gets down to 5-6ish..maybe at the end of the month.
After the huge selloff in oil and commodities, oil is rising tonight before the OPEC meeting. They may slash production big-time to stop the decline in price.
http://www.bloomberg.com/apps/news?pid=20602013&sid=ao2AklAO8ZWo&refer=commodity_futures
Is this a bottom? Amazon got crushed afterhours with fairly good earnings but light guidance. So it goes for anybody nowadays. POT reports in the AM. Last time they reported fabulous earnings, remember what happened? It was freefall from then till now for all commodities. So many people have gone partially or all to cash, because they can't figure this market out. Those people could short it to oblivion or they could spark the mother of all rallies, but there would need to be the mother of all catalysts. Even another coordinated rate cut wouldn't provide that in this recessionary climate. I think we are in for a long term cloudy picture where we are still scratching our heads like we have been for over six months.
No hil, hold on you will know when the bottom comes along. I thinking there will some huge game changing event over the weekend.
Did you see the various descending triangles on Snot's blog? And, as someone pointed out, his DOW chart looks like one too. Descending triangles are bearish and often there is a breakdown at the end of them. Job numbers tomorrow. Will it be tomorrow? Maybe next week? I'm almost all in cash, but not quite yet. I have a friend who is long on margin. Dangerous.
I wonder how many redemptions are occurring every day for hedge funds and mutual funds? Until those stop, the market will have a hard time going uphill.
POT did well for about 2 minutes today, then it went down.
Possible long: look at KFT.
I would advise a wait before KTF if you did not already get in.
Snot has been long for some time now, even when he is drawing bearish charts. I simply don't understand his strategy.
Anyways, the turnaround is very close, probably monday or tuesday. I am going to cover shorts on any gap downs and weakness and wait for a capitulation.
I am getting scared too now.
The last month or so I have made a profit of 8%. If not for UNG, it would have been double. So not playing until I see the capitulation.
My guess is monday.
I sold my SDS at 111, holding on from 90 or so, at the beginning of the week. No more shorts for me. Started nibbling on longs for now, about 2% of pf (ofcourse other than my bag of natural gas).
We may bottom on monday or tuesday, but it is very close.
Smart choice not to hold that short over the weekend. Nice trade. I'm guessing that shorts covering is what is holding it up today. Monday may be the capitulation day, since today wasn't. Then Tuesday the FED will cut rates and things will be ok for 24 hours. :)
haha yes, just picturing a scene in my head like in cartoon. There is a financial tsunami coming and hank and bank have a 1.5 inch long rate cut to try and stop it.
On a more serious note, imo, the rally will last weeks or even months.
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