IYR is in intermediate downtrend. Sell short between 67 - 68$, if the opportunity arises. Stop 71.5$.
Monday, June 24, 2013
Please read my previous post before you read this. Read this May 4 post, because reading this will provide a better context for you to understand the current post. In those posts, I have outlined roughly that a break below SPX 1590 would put this market on an intermediate sell signal. A break below 22.75$ on GE would do the same as well.
MHCAX is one of the indicators I follow to see where the market structure is. I have an intermediate moving average scaled. Right now, this indicator is in an intermediate sell signal. After 2009, the only intermediate signal was in the summer of 2011. If you look beyond 2009 in the past, there are few times when this indicator whipsawed the hell out of followers. If you follow the markets ardently, you will realize that there is no holy grail. You have a set of indicators and watchlists to follow your game.
GE is one of my indicator. I outlined previously that 22.75$ is my line of difference between bull and bear. Right now, we are (almost) there. Not quite. I expect some bounce here and then go down, no guarantees. We could go down from here as well. Either way, we stay short of SPX below 1590.
ST - Bearish
IT - Bearish
LT - Bullish
Thursday, June 20, 2013
The 1st serious dip below $1600 was vigorously bought. Nobody took the dips around $1700, nobody bought. Everyone wanted to be smart in their own right. The price was in a box for several months between ~ 1550 to 1800 for several months. Everyone had it in their mind. So, the wait finally materialized when Gold dipped below 1600$ this year in April. Many people I know seriously bought at a discount price of 25%. Whoever missed buying on the 2008 dip. On the 1st dip. They were actually waiting for 4 years to be smart. Within 2 days, sellers were out of gold coins. And selling at a super premium. Then comes the big shaft. Till 1320ish. I thought the 1300s would wait for a while. And rally to 1475 or so before going down again. But, last night the sell off was brutal once again. Down 5% in 2 hours. Now, Gold has a serious resistance at 1320$. Let's forget downside for a while. We are looking for upside, right? Just like I thought 1550s would pose serious resistance to Gold at 1300s, now 1320 poses good resistance if we look at the chart going back to July 2010. So, if we want the price to see an ascent to 1500$, 1320$ should break 1st.
I am guessing 1200s should hold for a while. Knowing the "Spiking slow and falling hard" theory, I wouldn't be surprised if 1200 breaks down. And I know you don't mind, because you stood staring (without selling any of your metal) all the way up and you will do so on the way down as well. To be honest, I planned to sell some of my ornamental gold above 2,000$. But, it never came. See, I had a plan. So did many others who held gold coins. I never had any "gold coins" but just ornaments and paper Gold. I trade paper Gold on a regular basis but the ornaments' sale never fulfilled. I will have to wait till the next big cycle. Well, I won't live that long, so no worries anyway. When Gold dipped below 1600, many people said it was just the beginning (of the bull market), so let's buy more. It turned out to be the beginning, but of the bear market. Chart below shows that, read the circle.
My indicator tells me that we are in the beginning of a bear market, with the 1st tick below 0 occurring in May 2013. Many pundits define a bear market as a price below 20% off the highs, so my indicator does satisfy that technical definition too. For the good of the bulls, I hope the parabolic rise holds, I want to see atleast a touch of 1500$ from below. But, seriously, if I have to be honest, I see a meeting with the blue line in the next 12 months at 900 - 1000$ price. If Gold price waits that long, that is. Because somebody wants to see Gold lower sooner and in a hurry.....
Please help me by copying the message "ditto" to silver traders as well.
Wednesday, June 12, 2013
With widespread panic going on right as Nikkei futures at -6%, All ords taking out 2013 lows, I think it is time for a timely update. On May 21st, this is what I thought. I suspected volatility, but definitely not a 5% correction at the time of the post. But, knowing this pyscho market, I was mentally prepared. The next day, ofcourse, gave us a clear indication and I planned accordingly. Bar few trades for meagre profits, my account has been mostly closing positions in the last 2 weeks. As of now, my account is 100% cash as indicated in the post outlined above. The chart that called "the top", where is it now? I am sure you are super curious. Are we at a bottom? I don't say that till this chart confirms. Unfortunately, it confirms at the end of the day and almost at the end of the after hours. But, based on the close, I initiate positions the next day. I suppose that has been working okay for me. I would say we are almost at a tradable bottom, but I definitely need price confirmation to say that. Based on the trendlines, I have 1616 - 1623 on $SPX as price confirmation on the hourly close. I will initiate market longs above that price. I will not short above an hourly close of 1590 on $SPX. If SPX closes below 1590 on the daily chart, then the intermediate outlook will turn negative as well. There is absolutely no need to undue take risks with this year being so good so far. Ok, now, coming to our chart, I have the indicator on this chart hitting the upper extreme where it had called for a bottom several times in the past 15 years. Beware though, if it decides to go extremes, like in summer of 2011 or 2012, you will be cooked. Hence, you need to have a price confirmation for a reversal. Till then, I would be happy to sit out and enjoy the sun.
ST - Bearish
IT - Bullish
LT - Bullish