Yesterday while the US$ index made a new high, equities and gold ended in green. And people have started believing that this time will be different. I hate to be the bearer of bad news. Sorry, no Virginia, there is no decoupling of USD and Equity. Not yet. Every time dollar has risen without having an influence in the ES, the SPX rebalances in the next season. This was one of the reasons I went short last evening before close. Even today US Dollar index climbed higher.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Wild Ride Thursday, Part Two (by BBFinance)
How was your ride? Thank goodness we are cash and cushy and out of the harm’s way. This market is a recipe for disaster and perfect for losing money. This is what I meant when I said that the direction is not clear. However, those who were screaming the death of Euro and Eurozone in the morning hours fell silent by mid-day when the index has covered most of its early day loss. Surprise, surprise!
Thursday’s Wild Ride (by BBFinance)
Was it just luck that we sold our long positions yesterday? Call it whatever you want, I must always thank God for showing me the right path and remain humble. Yes, it was a good call to sell and close the long positions. Thank you Lord.
Official End of Santa Rally (by BBFinance)
So there was little bit of juice left in the market after all. The day started poorly but ended OK. I however closed all my long positions in the morning, for two reasons. You can view the trading results here; http://bbfinance.blogspot.com/p/portfolio-update.html
Reason one is that I think this cycle has reached its top. It does not mean we will start down drift tomorrow. On the contrary, tomorrow we may see another attempt to breach 1284 in SPX. But I am no longer comfortable on the long side even if the SPX goes up few more points. The risk reward calculation does not justify it. So I would rather take the profit on the table and run. Leave something for the next guy.
Nightly Report (by BBFinance)
On December 27th , 2011, I wrote that I expect the SPX to go up in the 1st week of New Year. (http://bbfinance.blogspot.com/2011/12/final-friday-of-2011.html )
