Apr 29

10:45 a.m Looks like XLE is breaking out of the triangle and SPY is rallying. Keep an eye on UNG for a cross above 20d & 50d. We may have /are in a bottoming process in natural gas. What more, we have bounced exactly of the 20 year trendline at 3.19 (see our post a few days ago on this). Sometimes, it feels incredible that the market knows and respects a 20 yr trendline. As for the markets, could we see 900? Sure. We use a hedged play, we added some XLE again on the breakout of the triangle. We will keep adding SPY shorts every 25+ points or so.

11:24 a.m. sold 90% of our URRE(@ 1.07) bought at 0.63, which we bought a while back now (2 months? - sometime in Dec-Jan)

11:55 a.m. Out of ERX & XLE from the morning for small 3% & 0.75% profits respectively. Double top region, yes we can blow through, but it also attracts sellers. So, yes we can (scalp). Also, we don't have the balls to hold through the FOMC announcement.

12.20 a.m. Looks like another long bull flag.

Feel free to ignore:
WSJ & CNBC had an article saying h0w the rally was fake and things are going to worse etc. Again, at the risk of playing contrarian (which comes easily to us all :-)), in 2008 May, they were saying it is a correction in a bull market, now they are at the other end of the spectrum and the newsletters don't believe this rally. This rally has defied all the bear logic thus far - ascending wedges, various trendlines at various angles, moving averages, low volume, turndates, cycle dates. Such skepticism is probably healthy for the rally to continue. Lots of technical charters (ourself included) have drawn in an ascending wedge and were looking a nice fall to get in. Too many shorts got caught on the silent run from 666 (remember we strongly hinted towards a no-capitulation style rally). Being a bear is still in vogue. DSI (bernstein's) daily sentiment index is buzzing at 60%. So, there is still some room on the upside sentiment wise (according to us ofcourse).

2:26 p.m Sold 90% TBT from the purchase 2 weeks back (we did a post about this) for a 10% profit.

6.00 P.M XLE has proved to be very indicative of the market action. We suspected a rally breakout and that is what we got. The action today in XLE broke above the triangle. We may have a pullback no doubt, but that will be a buying opportunity as long as 842 holds on the SPX. We'll continue to scalp watching the hourly moving averages. We are quite overbought short term so a pullback can ensue anytime. As long as 842 (the low) on monday holds, this market will rally.

Lets look at DIS (disney) as a random stock pick. This broke out of a sideways month long consolidation. The bears would have possibly played this as a possible Head n shoulders. We fully believe DIS can make it to the 24 region (the 200d) MA in the coming weeks. This is classic sector rotation in progress. Some of the tech stocks which have already run a long way will probably go down little or chop around (e.g. AAPL, AMZN), while relative laggards thus far (for e.g. DIS) can run.