Saturday, April 11, 2009

Forgot about Good Friday

Market was closed Friday. We are now in a medium-term bull market in the stock market despite misgivings about the economy and I will be acting accordingly. For the portfolio on this blog I will be placing 100% into SSO with a market order $22 (which is 4% below market price on SSO corresponding to 2% on SP500), but if, at Monday morning, the market looked like it will not give me a chance then I will just go ahead and change the order to market order at the open. ( With limit order I am taking a chance here that my order will not be executed but after last minute rush upwards on Thursday, there is a good chance that there will be at least 2% intraday pullback on SP500 before heading back up again.) Next stop is around 880-900 on SP500. From the volume momentum it is likely that we will blow past 900 and head to 200day MA, which is around 1000 on sp500, which is only 16% from here. With SSO we will squeeze 28-30% from this move and then wait before shorting with SDS if the market cannot stay above 200-day MA. If we are lucky we will make all the way there. That would be a great sell signal because the actual economy will become center stage at that point, which I believe has at least one more leg down since there is still no capitulation and there is too much confidence in general public. It is difficult to see how such huge (real) losses can be recouped by fake money and not actual (physical and service) output of the people.

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