Thursday, April 11, 2013

Target for 2013

The market has continued the bull run and now the bullish wave from 1539 is 58 points, almost matching the strongest bullish wave put in initially by the Fiscal Cliff resolution. And I suspect what is driving the rally after the break out is all the short covering after the all time high was taken out. I talked about this around the time when a solution was found for Cyprus. I figured if that level from 1565-1576 was taken out it should theoretically make shorts run for the hill and I guess I was right on that one. They were just holding out strong until the moon screwed them over.. and since I am assuming this is a short covering rally, I don't see much of a pullback given the fact that there are people like me with shorting instruments (VXX in my case) that will be selling on the dip to get rid of these positions. So perhaps we'll see some sort of sideways correction to digest gains and more short covering before nailing 1600+.

So now that the 1600 target I had for 2013 has been technically met, I'll be looking at the charts over the weekend to see what other possibilities are there after we see a significant correction. Fundamentally speaking, the US economy is doing better but I wouldn't call our current growth optimal by any stretch. I think the best question is will the US economy gain enough traction on its own to survive without any more liquidity infusions. The idea is similar to loaning out money to a money losing business until it can regain its footing, think General Motors.. will it work on the US economy? that remains to be seen as this I believe is a first ever in history. If it does, Bernanke will be immortalized and the markets will go up substantially until the next recession comes.

Btw, that screen cap from Twitter yesterday was the 1589th picture on my phone. A picture of 1589, on the day the market topped at 1589 that just so happened to be 1589th picture on my phone. I was calculating the odds of that happening and it is 1 in the hundreds of thousands to millions (depending on what parameters I use).  So I will be playing 23 lotto tickets (1589 added together) using a combination of these numbers. Maybe that will accelerate my trip to Easter Island! my grandpa won the lottery after all (in 1930's Cuba) and I wouldn't be here today had it not been for that lottery ticket that someone else gave him.. so who knows, maybe I'll get lucky.

Main S&P 500 Trends

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

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