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Friday the markets gaped huge to the downside at the open but then recovered much of the loss but still closed nearly 1% down on the day after a heavy volume session. This blow came after negative Fiscal Cliff news. With no likely hood of a solution coming before the end of the year, markets may drop quickly. We shall see.
Today the markets moved back up as the Fiscal Cliff looms. With our long positions still intact we will have to wait another day to see where we are headed. Did the market breakout early this week or was it a fake out? We still don't know. A move above yesterday's high will confirm the rally.
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With the fiscal cliff still looming and news running rampant, anything can happen as we have seen the past few days. Just after 2 days of strong run ups by the market, today it gives a strong down day and forms a bearish dark cloud candle formation. All while the VIX spiked over 11% today displaying the fear entering the market.
Meanwhile, the NASDAQ completed it's DEATH CROSS today although most pundits seems to not be taking notice.
Lastly, BBBY posted less than impressive earnings today while FDX gave not so rossie guidance. With all this negative news, FEAR, Death Cross and lowered earnings I don't think this rally can continue. While we all like to rally for the fat man who's coming next week, this time we just may not have enough left to rally over. We shall see.
In the meantime, we will set our stops for the UPRO at 89.25 and go back to SPXU if this triggers. I know that we have been whipsawed a lot lately but that's what we get when we play the stock market. Some days are better than other but at the end of the year we always have solid gains.
Today the markets surged higher on strong volume signalling the start of a new uptrend. While some pundits are calling this a fake out rather than a true breakout, only time will tell. While you know my opinion by now, we still have to follow our proven methods and not my opinion.
So, tomorrow we will add to our positions should the market continue to move higher and UPRO hit 92.50. I don't expect this to happen as a reversal is most likely at these levels but as we have seen, the news is king right now, not the fundamentals.
Today the market got positive news regarding the Fiscal Cliff that cause it to rally strongly.
The SPX re-gained it's 50 DMA while the NASDAQ avoided the Death Cross one more day. Will this rally continue or will it get washed away with tomorrow's headlines. . .we shall see.
As we are still seeing negative data come out along with very weak economic indicators, it will be difficult for the market to rally. However, the News and Rumors pushing the buttons right now, fundamentals are mostly out the window. With Santa coming next week we may see a rally this week to welcome him. It is not necessary but typical. Will this year be different?
Either way, we will follow the market. Tomorrow we will purchase a 1/3 position in UPRO should the market continue to rally and the UPRO hit 89.55. This will also be set as our trigger to sell our short positions by exiting SPXU.
Friday the markets continued their move down as we expected thus triggering our second short position(s). With the SPX back below it's 50 DMA, the NASDAQ just about to complete it's Death Cross, and the Fiscal Cliff still looming, it looks like we may have started our next thrust down which may very well hit a new lower low.
Tomorrow I will add my final short positions should the market continue to move down and the SPXU hitting 39.67 anytime during Monday's trading session.
Today the markets moved down as we expected and triggered our first short positions thus stopping us out of our longs. I expect the SPX to move down to about the 1390 area as my first target but sub 1340 is my intermediate term assessment and in my opinion, sub 1,000 longer term.
Either way we will trade on what the market does, not what I think it will do. With that said, we will add to our short positions tomorrow with another 1/3 of our portfolio should the SPXU hit 39.33at anytime during the trading session. Our stops are currently set at 8% trailing for now.