Tuesday, October 06, 2009

Situation Normal

I've closed out all positions and am now in cash. My brother is winning our trading game with a nice win in FAZ a few days ago before pulling out just in time. That dropoff in AONE killed me yesterday, and I've made a little back today with a quick trade in FAZ, and by pulling out of everything else before it fell off.

Around 11:30 today, I had a feeling that the S&P was getting tired, and that's when I setup the FAZ trade. I considered tweeting it to GreenFaucet and StockTwits, but Zero Hedge had just posted a commentary on how the S&P is headed higher today and tomorrow. Those guys know a bit more that I do, so I decided to keep my opinions to myself for the time being. There was also the thought that some other Direxion ETF might have been better, like a Russel 3x Bear, but there really wasn't much time to check it out and compare.

Right now, I'm clueless on market direction: both Bears and Bulls seem to be getting more passionate about their opinions. I'm still hearing bullishness on this market, but it doesn't feel right! So, for another reality check, here's a weekly S&P:

Roubini's been out there saying that we have to drop now to recover from all the gains made since March. But this chart shows that what just happened WAS a recovery from the October plummet. And now the S&P can go back on the track of steady declines like we've been doing since 2007. But there's good support at 1015, and I see light resistance at 1090, and 50% retracement at 1122. If we break above these levels before the end of the year, my inner Bear might finally go hibernate this winter.

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