9:45 a.m. We will be travelling on some work related issues for a couple of weeks. The Put call ratio is 0.64. We can do with some decline. We added some SPY short positions.
12.30 P.M
We will be off in the afternoon and be out for a couple of weeks or so.
A recap our stance:-
Nice decline (at least nicer than the past few declines). More so, it comes bang in on our cycle highs. We showed you a big 34 week cycle coming in UTX (and also the DOW) around first week of sept1. In our cycle model, today was the top of the may 13th (low) cycle. Usually when multiple cycles, elliott wave labels match up we expect see a sharp decline. We will give this decline upto 15th Sep. We must break back below the 1000 and very preferably at least visit last swing low 980 by then.
Accordingly, our PF has various kinds of put and short positions on SPY, FXI, QQQQ, UTX. We also have long positions which are essentially house money in dividend paying stocks like INTC. We usually take profits in stocks.
Now, if we don't see a decline by then - it gives an important signal that the market is rallying even on bearish cycles. We must respect that. Since then, the market can rally into november and even Mar-May 2010 possibly.
Our preferred scenario is however by our cycle work a decline into oct-november. Followed by another advance into July 2010. Fundamentally, we think a second stimulus will be passed by the government or atleast some of the spending of the first one will be brought forward in time.
See you folks in a couple of weeks.
We will off in the afternoon and be out for a couple of weeks.
5 comments:
What's your view on the NASDAQ for the next few months?
Today's breakout in SMH, INTC and QQQQ completes the minimum requirement for a pattern we have been tracking since november. If you know about the 3 peaks and domed house, you know what we are talking about. The market needs to fall from here. We believe Nasdaq will correct > 25%. We have cycles topping out until Sept mid.
We own some qqqq puts longer term into Mar 2010.
If we don't correct by say Sep 15th this rally can carry much further into november, probably even Mar 10.
Thanks for your insight. Have a good vacation.
Are you guys coming back online or wot?
Sorry folks, we have been really busy (travelling in/out of the country) and not trading as much since our last post. We covered some 50% of our short positions around Sep 26. We still own some short positions in SPY. Our trades in COP, XOM and those posted on Sep 10th have kept us more or less even thus far.
We have not had a chance to look closely or run our cycle model again. The turn dates as of the last run were Oct 10th, oct 26th, Nov 7th. So use them what its worth.
We will probably be back in operation by the end of the month.
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