I trashed the bearish count posted yesterday as the market made a new high and now it looks like an Ascending Triangle is taking shape targeting 1513. I mentioned few days ago top picking was not easy and what we are seeing is just a good example. The market is very overbought and from what I read this is the longest bullish run for the S&P 500 since 2004, also the RSI has the second highest reading since 2001!. So while traditional technical analysis screams a top, the bottom line is that the Trend Average hasn't even been tested (the TA has been catching up to the market instead) and you guys know if the TA doesn't turn, the market will keep going up. I expected a rally in the US to catch up with the rest of the world when the Fiscal Cliff was resolved so I am not surprised at all, but what I have to nail down is the right count for these waves. So I moved the 3rd wave one notch and now have the 4th as 1491 and if we go by this count and the 5th wave ends up equal to W1, then we magically get 1513. So we'll see if that works and like I've been saying lately, the question is not so much as to where the top is as I am confident we are near one now but whether the market consolidates and then does a 150 point + bull run or if it sells off as many if not most people doing wave counts are predicting. There is that bullish long term count I posted a week or two ago and the bearish rising wedge, the Trend Average will be the ultimate judge in all of this. I don't know what is the short float now on the SP500 but if the market breaks through major resistance on the next intermediate bullish wave (1565?), there should be a substantial short squeeze and many will jump on the long side. Just look at Netflix, a great company which had ALL trends on the bullish side (something I would NEVER short under those trends) yet 25% of the float was on the short side last week so when the news broke that they're actually doing just fine it went up 70%.. in one week. Talk about a shorting bloodbath..
Anyway, today I ended up selling my VXX hedge for a position trade given the Ascending Triangle and the bullish MACD cross that I follow. So I will be buying it back hopefully at 1513.. China and the HSI have rolled over and have started their correction, so the US will be catching up on the bearish side soon too.
Have a Great Weekend!
Main S&P 500 Trends
Short Term Trend = BullishMedium Term Trend = Bullish
Long Term Trend = Bullish
Long Term Portfolio
- 80% Long in Red Chips traded in HSI (Mainland China stocks traded in Hong Kong) since September 2012. Only position trading 30-40% of portfolio for cost improvement. - Sold 10% on 12/27/12, Sold 10% 01/22/2013
Short Term Margin Trading Strategy
- Bought 1000 VXX @ $25.78 as of 01/16/2013, Bought 1000 VXX @23.68 on 01/22/2013 - Sold @22.68 to position trade on 01/25/2013
- Bought 1000 VXX @ $25.92 as of 01/15/2013 - Closed @25.96 on 01/15/2013 . = +0.04
- Bought 30 AAPL @ $509.50 as of 12/14/2012 on margin - Closed @514.50 on 12/17/2012. = +5.00
- Bought 1000 XIV @18.62 as of 12/13/2012 on margin - Closed @18.70 on 12/14/2012. = +0.08
- Bought 1000 XIV @18.80 as of 12/05/2012 on margin - Closed @18.88 on 12/07/2012. = +0.08
- Bought 1000 XIV @18.41 as of 12/04/2012 on margin - Closed @18.63 on 12/05/2012. = +0.22
- Bought 500 VXX @29.23 on 12/03/2012 - Closed @30.12 on 12/03/2012. = +0.89
- Bought 500 VXX @30.77 on 11/23/2012 - Closed @29..68 on 11/27/2012. = -1.09
- Bought 500 VXX @31.54 on 11/20/2012 - Stopped out @31.11 on 11/21/2012. = -0.43
- Closed position 500 @ 18.26 on 11/20/2012. 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 = $2.05
- 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.
Net Profit since 11/08/2012 on open and closed short term positions = $2,625*
* Margin position is usually $15-20k
* Margin position in gold is $4k
Retirement GoalAs of 01/02/2013 - 13.5%*
* Percentage gain for total liquid portfolio that started in September 2012, Goal is to double portfolio for retirement by September 2015, with 100% being the ideal retirement level.