You are witnessing a blow off top in precious metals today and some serious yen action, that can only be described as “detrimental” to Japanese exporters. I am confident in my opinion that we are in the last days, if not hours, of this current uptrend. Having said that, I blew out of my largest long position, BAC and GMCR, raising my cash position to about 50%.
With the cash, I will take 5% and add to my underwater VXX position. Remember, it’s a play on the market, not an individual name. There are limits to momentum and traditional correlations can only be ignored for so long. Again, you cannot have a stock market rally with Yen and long bonds going through the roof. We are now up 10 of 11 days on the S&P, making this another mind-boggling rally, that feels mechanical in nature.
Volume is very light; but I am not a big believer in volume, unless the move is big. For the most part, we’ve been stair stepping higher, as short sellers wait in the balance for a chink the the proverbial armor. It is my belief, that chink will come in the form of a fucked up Japan (racist pun NOT intended).
As for me, I do have one bullet left, with regards to a TZA average down. I will not be executing that order today. I much prefer to see how the market will open tomorrow. As for VXX, I will intentionally miss out on the initial move, in order to place my last average down with precision.
Soon.[youtube:http://www.youtube.com/watch?v=y9v_GX56Qes 616 500] If you enjoy the content at iBankCoin, please follow us on Twitter