It is my fervent wish that May 22, 2013 becomes a day permanently etched in my brain. I can conjure up the days October 11, 2007………March 6, 2009……….even far-off dates like March 10, 2000………without having to look up any of them. They are all major turning points when the market switches from multi-year bullish to multi-year bearish, or vice versa.
I’ve been disappointed so many times over the past four years, that I take nothing for granted. Indeed, shortly before the close today (Thursday), I trimmed my exposure from 80% to 66%. If we plunge hard on Friday, well, I’ll regret it, but I have to apply a judicious amount of risk management to surive this insane market we are in. I still am in 90 – count ’em – 90 different short positions, and I will cheerfully increase my exposure if it seems logical.
I am trying to project just how far down we might go. For the Dow Composite, I think 4750 is just about the most ambitious we can dream right now.
For the Russell 2000, I’d say 900 or so is the most wild-eyed target I dare offer.
As for the Transports, oh, something like 5800 or so.
The above is just a sampling of the kind of conjectures I’ve been formulating. I depend on technical analysis largely for two things: (1) to let me know when I’m wrong, and should therefore leave a position; (2) to let me know when the risk/reward is no longer favorable, and I should take a profit.
Another fact I’m cognizant of is that all these little “crises” we get have been tamped down, one by one, with each one tamped down more quickly than the last; to wit:
So above we have, from left to right:
(a) the debt ceiling crisis, which was the last really good “down” market we experienced;
(b) the Europe-is-going-to-hell crisis, which mysteriously abated for about a year, although it seems to be creeping up again;
(c) the sequestration/debt crisis, which sort of fizzled out near the end of 2012;
(d) most recently, the “tapering” crisis, which is investors realizing that, $16 trillion of debt later, Bernanke is considering maybe letting off the proverbial gas pedal just a little bit.
Of course, with $16 trillion (and rapidly growing) of debt, the United States is screwed and tatooed with interest rates skyrocketing the way they are. The explosion of rates skyward is what Bernanke himself described as, errr, a “little puzzling.” Thanks, Professor!
I just want to bemoan my gold miners analog one more time, just to get it off my chest.
In retrospect, I can now see that this analog was one of the greatest charting calls of my entire life. It was, forgive me, brilliant. I shall balance this obnoxious statement by saying that I am ashamed of myself for completely blowing this trade, because I got scared out of my mind about the “mutation’ the analog took on, as circled in blue. My analog turned out fabulously, and miners are still being cut to ribbons, but I have barely benefited from one will surely be one of my best market insights ever. Sigh……..
Speaking of honest-to-goodness bear markets, bonds are still getting pummelled, and I think my outlandish target of about $100 on TLT is looking more reasonable every day.
Today was the best trading day I’ve had in a long, long, LONG time……….certainly for all of 2013, and definitely going back well into 2012. But there’s no such thing as a Happy Tim; if things are going against me, I’m miserable, and if things are going for me, I am under-committed! All I can say is that I’m glad I didn’t have any freakin’ longs!
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