Potential New Market Highs Next Week

The worst that could happen as far as recent main news has happened and just look how the market has reacted. The level I had been mentioning (1498) looked like it was about to be tested early in the morning but traders used that dip as a buying opportunity and the market reversed quickly from the 1501 low. It seems as if people who were hoping to see the 50 DMA have realized there's a good chance we won't see it for a while so they figured they'll buy at the first dip so as to not be left behind. So now we have the Inverted Head and Shoulders I had speculated about few days ago and the target on that one is 1555. Also, looking at W1 on the intermediate chart (105 points) and where I have W2 marked, the target for this W3 (or 5th of the W3) is 1567 so things are looking bullish right now. We could see another test of the 1498 level again early next week but as it is Monday could be very bullish if markets around the world rally after seeing a reversal in the US market. I have been mostly right this year on the direction of the market so maybe I'll get next week completely wrong. But based on what I see on both opinion and fact, new market highs are highly likely at this point if sellers fail to come in and take out those key levels (1498 and 1485). Perhaps the all the time high for both the DOW and the SP500 will be taken out soon and btw I made a mistake on who corrected me on the SP500 high, thanks WR for pointing that out and TDD for correcting me.. I am usually half as sleep when I am reading comments in the morning. Lastly, the TA is trending sideways but if the market opens higher than 1510 on Monday and closes above it, the the TA will be bullish again. But for all intent and purposes it is bullish after 3 market closes above it.

As for trades, I missed the low today to cover my hedge for what would have been a good profit since I was sleeping and the reversal was so sudden. But I was able to cover on the second dip for for coffee money so I am ok there. I've also been adding longs and I have to do the math but I think I am a bit over 90% long only on the market, all in China shares. If we get that IHS target, I'll be shorting to hedge again.

Have a Great Weekend!

Main S&P 500 Trends

Short Term Trend = Bullish

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