Three Rising Valleys and Fiscal Cliff Resolution Odds

The market closed above the 50 DMA again and should the market stage a rally, the intermediate trend will change to the bullish side. Right now the markets are waiting for a resolution to the Fiscal Cliff and if we go by patterns, there is a 65% chance there will be a resolution fairly soon. The reason is we have a Three Rising Valleys pattern in place, which is a very bullish pattern that is about to break out. I searched for exact stats on this pattern and the winning rate is about 65% so I am basing my odds for the Fiscal Cliff resolution on historical stock market patterns. Because as it is, they are playing political poker and the public is in the dark on which way the Republicans are leaning. So let's see if the politicians can deliver this on time so we can have a monster Christmas Rally!

I didn't trade short term today as I am waiting for things to clear. But my FXI longs hit $39 (after hours) and I am hoping the US rallies so this thing can shoot over $40. I am going to start checking into ticket prices to Rapa Nui soon..lol

The odds for the Three Rising Valleys pattern are from Fidelity and here is the link:

https://www.fidelity.com/learning-center/technical-analysis/three-rising-valleys-pdf

Main S&P 500 Trends

Short Term Trend = Bullish

Medium Term Trend = Neutral Leaning Bullish

Long Term Trend = Bullish

Long Term Portfolio

• 100% 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.

Short Term Margin Trading Strategy 

• 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 = $2,395*

* Margin position is usually $15-20k

* Margin position in gold is $4k