Thursday, April 28, 2011

Q3 coming and so is another big rally

I think the last time I saw a wave like this was the break out wave from 1040 back in early September 2010. The market is showing a lot of strength and all assets are going up across the board. And I think the message is clear, people are going to move away from holding cash (In US dollars) and try to hedge against the dollar's depreciation by going into commodities, precious metals and equities. And in the not too distant future, everything we import (and items that are priced internationally such as corn) will see a big increase. So the plan is to go long in the first pullback on foreign equities, oil and some commodities on the rest of my portfolio that is sitting in cash.

I went hedged today as the count has become unclear at this point. The E-minis have a better count but the cash market looks like a rocket so I am not going to make predictions based on waves until I see something clear. The daily RSI is at 70 and many indicators are overbought which favors a pullback. But overbought can get even more overbought, so I'll just wait it out.

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