Monday, November 19, 2012

Bullish Outside Reversal

Today's rally confirms the bottom I speculated on last week and given the strength of the rally, the bearish waves that started in mid September looks like a double zig zag. The market was not only able to capture the Trend Average (1374) but closed over the 200 DMA as well (1382), so this looks like a bullish outside reversal (or bullish engulfing pattern) at this point. Obviously, the market must maintain these levels and ideally break through the 1400-1405 area. Going by the bullish flag pattern alone, the target is 1400-1405 and maybe history is repeating itself this year? last November the market bottomed and rallied around this time in a very similar form so we'll see the rest of the year will follow the same pattern.

I cashed out of half the XIV position and raised the stop of the rest to break even, so I made back my coffee money and some more :)

Main S&P 500 Trends 

Short Term Trend = Neutral Leaning Bullish
Medium Term Trend = Bearish
Long Term Trend = Bullish

Long Term Portfolio
  • 100% Long in Red Chips traded in HSI (Mainland China stocks traded in Hong Kong).

Short Term Trading Strategy 
  • Sold 500 @ 17.79, raised stop to break even on the other 500 as of 11/19/2012. Bought 1000 XIV @15.98 as of 11/15/2012 on margin - position trade cost improvement 4 cents, so net cost $15.94 as of 11/16/2012 - Profit so far $1.85 on 500 shares
  • Bought 1000 XIV @16.88 as of 11/14/2012 on margin - Stopped out @ 16.66 on 11/14/2012. = -0.22
  • Bought 1000 XIV @15.67 as of 11/08/2012 on margin - sold 1000 XIV @ 16.25 on 11/12/2012 = +0.58
  • Margin positions in Gold initiated 11/06/2012.

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