1498 Level

The wave today added looked very impulsive and the new high on the DOW makes this new wave likely bullish W1 of a W5. I had been hoping the market would at least test the 50 DMA but if the market indicates its done correcting, then we just need to follow the trend. I am looking again at the 1498 level which has now turned support. If this holds on the next bearish wave then we will have a nice Inverted Head and Shoulders targeting the all time high at 1555. Technically W2s are free to retrace 99% but that level holding would be a clear marker. The only way this bullishness could be reversed if bringing down the index to a lower low (below 1485), which still could be a possibility. But given the fact the market is expecting a failure for a budget sequester deal and already aware of the potential euro problem, any good news could be used as an excuse to mount a big rally.. specially if there is some sort of compromise on the budget.

I bought back some hedge at 1512 through SPXU (not that crazy VXX which now trades $3 less than couple of days ago) and bought back 5% of my long term portfolio through FXI at $38.55. So now I am 85% long and will add the rest when 1485 is confirmed as the low as we will probably see a worldwide market rally.

Main S&P 500 Trends

Short Term Trend = Bearish

Medium Term Trend = Bullish

Long Term Trend = Bullish

Long Term Portfolio

• 85% Long in Red Chips traded in HSI (Mainland China stocks traded in Hong Kong) initiated September 2012. Only position trading 30-40% of portfolio for cost improvement. - Sold 10% on 12/27/12, Sold 10% 01/22/2013 - Bought back 5% 02/27/13

Short Term Margin Trading Strategy 

• Bought 1500 SPXU@ 30.98 on 02/27/13
• Bought 2000 VXX @22.38 on 02/12/13 - Stopped out @22.38 on 02/14. Bought back @22.05 on 02/15/13 - Sold all 2800 VXX on 02/25/13 @ 24.30 = +2.05
• Bought 1000 VXX @ $25.78 as of 01/16/2013, Bought 1000 VXX @23.68 on 01/22/2013 - Sold @22.70 to position trade on 01/25/2013. Took loss $2.00
• 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

* Position in gold is $4k Posted by Author at 6:48 PM