We have been warning our members to be careful buying at these nosebleed levels and today those who got greedy and chased after the winning stocks, got beat. Most sectors ended in the red and the commodity driven areas were especially off big on Tuesday. As the Dollar bounces here, profit takers should continue to bludgeon the overextended commodity related issues but with so many extended charts we could see continued selling across the board.
In fact on Tuesday Treasuries fell, equities fell, commodities fell and both oil and gold fell as well. Basically everything has gotten so overbought it had to come down at some point. There is some talk of a failed 10 year treasury auction from today but no reason to panic. When the market goes lower people fish for any reason of why instead of understanding what an overbought and oversold chart looks like. As our member know we got in 2 days before the late August rally started and have been taking profits for some time, selling our stocks to the traders whose market timing is wrong. Luckily for us that is 90% of all market participants which gives us plenty of liquidity for when we cash in.
Our SPDR Gold Shares (GLD: 135.59 0.00 0.00%) position looks to be reversing off its all time highs but so far is just a normal pullback.
As the US Dollar continues to bounce off recent lows, the market finally began to get back to reality and started its long overdue pullback. The good news for longs is the major indices are still trading above their 10 period moving averages (pink lines). This is where aggressive buyers show up to buy in extremely strong markets so it will be important to see if we have an orderly pullback into that area or if we slice right through.
Obviously if you find aggressive buyers at these minor support areas you have an extremely strong market on your hands. Due to the fact we have gone so far off the bottom we feel it is more likely that we at least pullback to the 21 day moving average area (blue line).
Our short term profit target on Goldman Sachs (GS: 166.55 0.00 0.00%) was hit, allowing us to lock in a 6.75% gain since our Oct 26 entry point on ½ of our position. We have now moved our stop to break even for the remaining portion and now have a free trade on (barring a gap down).
Locking in profits on FuelCell Energy (FCEL: 1.43 0.00 0.00%) seems like a much better move Tuesday after it fell over 8% intraday.
We are up almost 6% on ProShares UltraShort 20+ Year Treasury (TBT: 36.49 0.00 0.00%) when everyone else on the street was taking the other side of that trade. You heard it here first and are already in the money on this one if you took this unique pick.
We have some concerns over our Akamai Technologies (AKAM: 51.56 0.00 0.00%) trades. They are in normal pullback mode but they lost their Netflix (NFLX: 170.46 0.00 0.00%) deal to Level 3 Communications (LVLT: 1.05 0.00 0.00%). This could be the start of pricing pressure for AKAM but the charts will tell us how to play this one and so far we are hanging on.
NEW SETUPS
Bank of America (BAC: 12.27 0.00 0.00%) short on a move below $12.13.
No comments:
Post a Comment