The Dow Jones Industrial Average will be under 6,000 when it bottoms in February 2013.
Now that I've gotten that prophecy out of the way, we can move on.
The next paragraph is NSFW and, thus, not safe for any of you residing in Topeka or otherwise offended by anything saucy. Please skip if you so desire.
A guy picks up a hooker, and when they get to their hotel room, he asks her how much it's going to cost. "$200", she replies. So as she begins undressing, he lays down on the bed and starts jerking off. Upon noticing this, she asks, "What are you doing?!?" He replies, "For $200, do you think I'm going to let you have the easy one?"
And that, my friends, is where we are at. Because last week was "the easy one." I made it abundantly clear that I was executing my Come to Butthead plan, and I remain positioned within the confines of that plan. I stated on Thursday night that I had 100 short positions. I remain similarly situated right now, even after Friday's drop.
In my opinion, it's not just "price" that pays, but the willingness to step up and actually take a risk. Otherwise, you're just a spectator, not a speculator.
But the drop we just saw was kind of obvious to anticipate for anyone with even a passing acquaintance with basic chart patterns and a quantity of testicles greater than one.
Now we get to see just how far down this market will be permitted to go. Besides TPTB, we also need to be somewhat concerned with the meaningful amount of trading executed at levels beneath present levels, which creates a certain amount of support.
I will say that my bottoms-up approach to trading this market tells me that we could have a clear pathway to 1050 on the S&P before TPTB jack things up with their QuEasy plans. My short positions all have gorgeous charts, and I've got 160 other charts that are quite tempting as well. Short-term support at 1160 is quite close, but if we can manage to break that level, my goal is 1050 before I cover.
Should that come to pass, the combination of (a) QE-whatever; (b) whatever dumb-ass programs Obama implements to save us all; (c) the anticipation of the Facebook IPO will all combine to goose the market much higher – let's say to somewhere beneath 1300 – before All Holy Hell Breaks Loose in 2012. It's going to be spectacular.
So that's where I am on this Labor Day weekend. Totally short, looking to get more short, looking to 1050 as my exit, and confident of my positions.
In closing, I will say that although I got buried in orders for my Bathroom Reader, I've still got about fifteen copies left. You can read about the book on Amazon and, if you send me $15 via PayPal to email address trader.tim.knight@gmail.com, I'll not only sign the book, I'll pay for sending it to you via priority mail. Sorry, sold out! Have a fun Labor Day, Slopers!
