Going for an all time high?

I mentioned yesterday that the DOW was probably going for the all time high and with today's rally, we might just see that high before any substantial pullback. And who knows, maybe even the S&P500 will do the same as it is just about 2% away. Again, the markets are very overbought on almost every technical and sentiment indicator there is but the market is free to continue its bull run, I said in December the US would catch up with the world if the Fiscal Cliff was resolved and this is exactly what the market has been doing. To give you guys an example of how markets can throw everyone off, look at the second chart from China's SSEC. You can see where I first spotted a potential top based on technical analysis and waves at the top of the Fibonacci bars. There was divergence on the RSI, bearish cross on the MACD, etc. (but not its Trend Average) and I took 10% of profits there (and the other 10% before the Fiscal Cliff resolution based on risk management). The markets suddenly reversed and now it's much higher and still very overbought, so we could well see the same thing here in the US. Also, that chart I posted yesterday from 1997 is on a weekly basis and look how technically overbought it got. A traditional TA or Wave person would probably have missed most of the bullish run in 1997. This is the reason why I've stayed 80% long during all this time (despite what is now almost a 25% bull run on Chinese equities with NO correction), I trade 20% on "opinion" (RSI, MACD, Waves, Sentiment, news, etc.) and 80% on facts (the 3 main trends). So to people who don't like missing the markets, I would recommend using a similar approach so you will be at least partially rewarded with your decisions. I am currently 20% "sad" that I missed some of the bull run but then I get happy when I see the other 80%.. :)

Have a Great Weekend!

Main S&P 500 Trends

Short Term Trend = Bullish

Medium 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 Goal 

As 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.