Up and Down and Up and Down

There's both strong support and strong resistance, but I think there's a strong overall upward bias. What I can tell you is that there's money to be made in the market trading. I just wish I was smart enough to be able to do it.

Anatomy

Small upside, massive downside, that's my experience in the market. Why? Because I'm a dumb trader. Consider :



I enter the bearish position at the X. Why? I've already forgotten (inability to learn from mistakes). I recall having a chance to get out of the trade within 5 minutes with a small profit. I pass. Then, at the ? mark, I have another change for a small profit and pass again - thinking the upside is now huge as the chart looks very bearish. Then, you can see a huge rally - which took my losses into the $100+ region. I decide it's pointless to get out now because it would amount to buying the top. Plus, it looks like a climax top. I end up holding this position overnight. As you'll see, I eventually did get out a nominal profit. This gives you an idea of how crappy a trader I am.

ETFs, not Stocks for Your Covered Calls

That's the tip of the day from Mr. SR who makes a tonne of cash in the market every day. When you buy ETFs, the volatility is much lower, so you're safer.

My information from the morning is that people think we're at the start of a new bull run. Hmmm... I think we will see more upside because there's some catching up to do to the 200 day MA's but after that, we'll definitely retrace atleast to the old lows.

Will we ever see 5.87 on GE again? SR - No. Me - don't be so sure. When a stock like that tanks, how do you know what the support is? We know what resistance is, but a support hasn't been established yet. We're probably going into a sideways market for a few months. But, in time, you'll see another downtrend and we'll test the support level.

I can only kick myself when I pull charts up - RFMD - sold at 0.75!

Flying Colours

Well, you can't ask for more. The market delivered today. But it has some way to go. I was happy with 69XX, but 67XX was a bonus. Now, how long must we wait for the near-term bottom? If you play your cards right, you can take a 15% gain (or double with margin) on your money if you call the bottom right. 6000 can go to 7000 in a sucker rally the way 7500 went to 9000 before the new downtrend started. Watch for it.

You DOW the Math

The all time high on the DOW was 14015.

Once it established a downtrend, it sank down to 12796. After a rally, it headed south again, rebounding off 11635 - down 9%.

Then, it established a support at 11732 before putting together another rebound. Once that gave in, the new low was 10828 - 7.7% off the previous support.

Then, without setting a new support level, it rallied a bit and then collapsed all the way down to 7883 - 27.2% off the previous low!!

Then, it set a new support level of 7449 before launching another rally. Considering we're already down 8%, and have taken out crucial support levels from 10 years ago, we're probably looking at a 20% drop from 7449. So 6k it is. Childishly simple.

That's More Like It

Another sacred day. But, what's this about the US T-Note bubble? I know one guy who made a bomb buying puts on oil has shorted the US T-Note. But, did you also know that looking at the price trend of the T-Note is very hard? Try it and let me know.

What should you buy? MGEE - utility company, that, I believe, serves mostly residents in Wisconsin. See how well the support has held up. You can't go wrong here. Or so I think. Have I? Not yet.

But we still have a ways to go. We need BRK-A to crack 50k and BRK-B to crack 2k. That's just the beginning for the buying to start again.

6971 was the 1997 low that people were eyeing. We've achieved that. Next is 6356. Let's hope we don't have to wait too long. That's it for 97. 96 has 6236 waiting in the wings. Why do I want to go low? Because things have to get worse before they get better and it's better that we get the worst out of the way instead of dragging things out.

Still Disappointing

After looking at today's market action, my response is, come on, you can do better! We need to break into the 6000's, sooner the better. What people don't realize is that we need for the worst to be over sooner rather than later. Let's sell off really hard right now, then we can all get back in with the confidence that our investment will grow, and all will be well.

Only AMGN and XOM are doing anything worthwhile. Does MSFT have the potential to dip below $100b market cap? Hmm...

One Depression Per Century

A house divided against itself cannot stand. Neither can one that spends more than it earns. I've heard the sentence "this is the day that the Lord hath made" long ago. Today is a sacred day, probably the dawn of a new realization that, perhaps, we are going to enter another depression era. Maybe there will be a new rabble-rouser who will find a class of scapegoats, and maybe in the nation with the world's most powerful military. Perhaps this dictator will reason that his nation needs vast open spaces for new inhabitation - lebensraum. Maybe there will be a coalition of other nations that will arise to defeat him. And then, another economic miracle. Who knows for sure? Maybe the most important thing is to establish a population on Mars so that, in the event of a nuclear holocaust on earth, we're not all wiped out. A new space race, that's what we need for a new economic miracle. Ja?

100% Cash

Not entirely 100% because I have literally a couple here and there, but I'm pretty much out, ready to sit this one out. Now, a smarter risk taker would short the right ones. But that's not me. Unfortunately. Finally, after a big down day, IBD says move to cash. What's the use of being a pro outfit if you can't tell your customers ahead of time?

I admire RBS who told their customers to move to cash last year. Sure, they're worthless now, but atleast they put their customers' interests first.

When BRK-A Doesn't Work

Did you watch the CNN Money interview with the author of Dr. Mr. B? You see Buffet flanked by huge burly minders whispering into their comm gadgets. So much for the image of a grandfatherly old sort who only invests in stuff he understands. And, people pay $100k and upto 2m to have lunch with him, bidding on Ebay.

Can BRK-A get to 74k again? You bet. Where will it settle? Considering nothing is immune to a depression, I think it should shed 80% of its peak value just like everything else. We know that BRK is a laggard, not a leader. So it'll be slower to decline than other tickers, but it'll get to about 30k eventually before people will buy again at the start of the next uptrend. Is it worth more? That's a pointless question. What something is worth is based on which way its value is going to move. And value is based on what people are going to pay for it in the future.

New Year Resolution

Every buy or sell I make will be accompanied by a picture showing where on the weekly chart I made the trade. God forbid I will make so many that I won't have time enough to honour this.