I believe we have seen the start of a tradeable bottom. However, I’m expecting a few days of weakness, a pullback, in the very near term.
For the Dow Jones, I expect this pullback may revist the 10 day moving average, which would put the move in the range of 250-300 points down. Notice that Friday’s close, despite all the fireworks of the previous three days, puts the Dow right at resistance.
Over the next few weeks, I expect the Dow to revist 11,750-12,000. I do expect strong resistance in this area.
Every thing is much the same for the [[SPY]] as it is for the Dow, via [[DIA]].
I have drawn two lines of resistance. The lowest I expect to be in play this week, while the higher one will be in play over the next few weeks.
As it stands, I’m fairly heavy short the Dow Jones and Russell 2K via longs in [[DXD]] and [[TWM]].
FWIW, Gary’s got the COT S&P traders going net short big for the first time this week.
Flush-a-roni time.
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Should be like shooting fish in a barrel.
The diETF SDS (short S&P) did not sell off hard enough for me to get long it.
Wood,
Excellent read on the markets. I hadnt actually factored in the short-term overbot mkt conditions into this week’s strategy. Your thesis makes sense from a timing perspective. Looks like the way to play it might be to wait for a pop in oil/natgas on storm fears, which should coincide with a move down in the mkt avgs. Once we get to that 11,200-ish area in the DOW, then build short positions in the oil names and long positions in some of the better biotech/healthcare names.
That’s what I’m looking for. Many thnx for the post. Probably saved me a few bucks and makes for better entry on my new positions.
Cheers,
-Phil
We have a pretty nice wall of worry. This squeeze could go on for some time. Thanks for the charts Wood.
Wood has 2 posts this weekend, other IBC contributors 0.
Odd No?
I agree the squeeze will continue.
However, people will be quick to book profits here, I believe.
I went long DXD this morning at 62.01. Nice gap up helped on the entry!
Dog, I have 1.5 sized position in DXD. If the Dow closes up today, I will add another half for a 2x position. The setup is money, lets just hope it plays as it has in the past.
Wood,
Here’s something in the vein of your “Born to Lose” column a few weeks ago. http://www.hardassetsinvestor.com/component/content/article/726.html
There have been other articles in Seeking Alpha over the past several months that reached similar conclusions.
Somebody please pinch me.
I’d say more, but I don’t want to schadenfreud myself.
I’d say more, but I don’t want to schadenfreud (sic) myself.
That’d be hard.
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Jake: fuck German.
schadenfreude actually.
It wasn’t the spelling that bothered me, exactly. It’s that “schadenfreude” is the act of taking pleasure in someone else’s misfortune. There’s no comparable term in English, hence its use today in the original German.
But it’s a noun, not a verb, and certainly not a transitive verb.
What the hell were you talking about in the first place, Woody?
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