Monday, November 12, 2012

Getting close?

The market has not bounced as swiftly as I had been wishing so the counter rally so far leaves an opening for
another wave down. Ideally, that wave would be a capitulation wave so we just have to wait and see. I still believe
we are at or close to a bottom on an intermediate basis so we'll see if the 200 DMA can hold even in an sell off (a day that gaps down and reverses back to the 200 DMA). Also, the the VIX has been dropping while the market has not made any significant advances and that signals traders are betting the bottom is near. Obviously, they could be all wrong but I am starting to think the market is just buying time and setting itself up for a year end rally.

I ended up selling my XIV position given my feeling that we might have one more leg down and luckily this thing went up 6% today. So I am back to 100% emerging markets, $0 in the US markets for now.

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

Long Term Portfolio: 100% Long (China and HSI Only)
Short Term Trading Strategy: Bought 1000 XIV @15.67 as of 11/08/2012 on margin, sold 1000 XIV @ 16.25 on 11/12/2012. Margin positions in gold initiated 11/06/2012.

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