.jpg)
DUG 9-Month:
Here's the deal with the DUG. Check the 6-Month bottom (obviously seen in July, with the $147 Oil Spike). My question is, why is the DUG now down ALL the way to where levels were when oil spiked? The answer is crappy oil mispricing and speculation. Out of the Top 20 Sectors in the past 10 days, four of the sectors are oil related (positive on an average of 15%, not to mention the #1 Sector being Drilling/Exploration). Oil is getting disgustingly overbought, and a lot of oil companies are beginning to create a round top. Tomorrow, as I called last night, is going to be really, really interesting, my advice being to see what happens during the day tomorrow (if you still have oil equity) and based upon that, hold or sell those positions before tomorrow's close. WATCH THE INVENTORIES WEDNESDAY!!! If you want Inventory advice, travel a little lower and read a couple of posts down (it's completely outlined).
.jpg)
GLD 1-Year
One Year? Moose, are you out of your mind? That's too long of a span! No. I'm not, and it isn't. In fact, I have made a connection to oil and gold, and after looking at the GLD and Crude Oil side-by-side, I've come to the conclusion that if gold fails in small amounts throughout this week, you'll be selling your gold bricks like hot cakes by the middle of next week. Here's the outline: While the oil spike in July was occuring, the GLD was on its way to topping its previous 1-Year high of about $100 a share set in March. Early in the week of the oil peak, the GLD began to dwindle little by little, eventually selling all the way into September to $72.50 a share. Why do I care about these statistics? Because, if you look back to then, you'll see something similar developing now, minus the fact that oil is no where close to hitting even $60. When oil "peaks" at $50-53, Crude Prices will throw an enormous head fake and begin to tack off again, dollar-by-dollar. What happens to Gold? Well, because the GLD is also overbought, prepare for gold prices to retreat as well.
.jpg)
XLF Nov-Dec.
Next up, Financials! Mixed feelings with financial companies, with BAC retreating back to $14 again, and heavy sell-offs today for WFC and JPM. What does this say about the Financial sector? IT'S STILL IN TROUBLE. What can the government do about it? ABSOLUTELY NOTHING. Money Center Banks aren't allowing loans, Brokerages are building up capital from their TARP funds, and the problems will come when the write-downs of Q1 pop up and companies begin to stick out their hands for more ching-a-ling. Benny Boy Bernanke will spit up a couple of quarters for sure, God forbid we let a piece of trash financial company go bankrupt again... Whatever happened to Lehman Brothers and Bear Stearns anyway? For now, I'd build some leverage with some iETFs, steer clear from Financial equities, and watch them get to disgustingly low prices again and then short short short.
.jpg)
$SPX 60-Day
Last but definitely NOT least is the $SPX. The squares indicate V-Bottoms while the ovals indicate Double-Bottoms. (It's tough to predict a V, but most people can spot a double during development of the second leg with ease). We've been hanging out in between the teal lines, which have been prevalent support/resistance hits. Above the green line for a day and a half would push us to 1000, and a day and a half below the red line would push us to either matching our old lows or making new ones. Here's the catch: if we make a double bottom, all we can do is go up from there. If we make a lower bottom than the one made in November, we have the potential to make an inverse head-and-shoulders pattern, which would mean we would have one more bottom to go. If we make a higher bottom, we didn't accomplish anything and we're not out of the clear. The day we hit a double bottom is the day I buy into normal ETFs and sit on them for the long haul. This week, believe it or not, is very very important for the market. Open with a bang, or open in the can?
My plan for tomorrow is to set a buy for DUG @ $21. Anything higher and I'd have to watch the patterns forming for the DUG, for if it's the patterns aren't solidified, then I'm not a buyer. SRS and FAZ are my only positions, and goodness are they pushing well. I have a 50% cash position, and that's only if I want to short a sector I like. Nothing is coming up that's looking good on my sector searches, so that is sitting there waiting to turn into more profit. Patience IS a virtue.
Humor time: http://www.youtube.com/watch?v=AIWTB8POnkg
See, even the Germans were supporters.
Enjoy tomorrow, and trade it safely and with caution!!! And as always...
Keep Tradin'
ZM
0 Response to 'Quick Update Plan'
Post a Comment