Wednesday, September 1, 2010

Elliott Wave Update

"The rally we saw today has the strength to become a real rally, so I am expecting a further rally to challenge the 50 day MA at 1086"

This is what I wrote last Friday after Bernanke spoke and seems like this is exactly where the market is headed. The difference is that the 50 day MA is currently at 1081. However, it seems like the market still has one leg left and if w1=w5 then that projects to 1089. The triple bottom reversal projects to 1085, the 13 day EMA is at 1087 and the 34 EMA is at 1093. So we'll probably see the 5th leg stop in that price range. I sold all my longs today at 1075 and took a full short position. However, by the close it seemed clear the market wanted to go higher so I sold half the SDS position I had taken at 1078 and looking to buy it back around the levels I mentioned.

EW Portfolio Update

Portfolio 1:

1/2 SDS

Portfolio 2:

1/2 SDS

Combined return 19% since 07/10 vs 1% for S&P 500 long or -1% short.

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