Friday 3 February 2012

Crows In The Oven!

My knees are paining from the long prayers and I am not even a bear!  So the lessons learned are that never go against the 1st instinct and greed kills. Because of that I have missed almost seventy points rally in SPX and is now worried about saving the capital however small capital portion allocation it may be. I have crows in the oven and if by February 17, the market does not pull-back in a significant manner, those will be my breakfast, lunch and dinner.  

Calling the top or bottom is a risky business and in future the strategy will be different. For this particular short trade, everything including Cycles and TAs failed. And knowing that the reversal is round the corner does not help either. At least for this cycle, the predictions are working out correct. The cycles pointed out top by February 2-8 and here we are.  

Today, while equities and AUD were jumping out of the window, other risk assets were actually down. Gold, silver, oil, Euro all were down. So while I want to get bullish, I am unable to become one. May be my inability to believe is costing me money. I should JBTFD. But if the employment situation is improving and economy is on the mend, as O was saying today, then what happens to the QE trade. Will it unwind?

And here is a chart by great Mr. Cobra who is a treasure trove of market indicators.

I encourage readers to visit his site.

But we have a new high today and rarely a new high is the turning point. So it is quite possible that Monday, February 6, we will see the momentum going and SPX will reach 1360 before any pull-back. That is just fifteen points away.  At this point it does not matter if it is fundamentally meaningful because the entire rally has been fuelled by liquidity and the law of gravity has been suspended by the Fed.  

2012 is going to be the year of the Bulls. Reason I say this is because of the humongous long Euro position that the commercials are building up for many months now. Here is the latest for this week.
When all the CBs are flooding the world with free money, call it anything, it is still QE. So we might as well JBTFD. 


  1. Yeah Cobra used to have the best free TA sites on the web. Now it's for pay and my cheap ass refuse to fork over the 10$.

    I thought Oil was up today, according to USO. Also, I don't think gold is a risk on/off indicator. It kinda does whatever it wants.

    The rally will end when I start having trouble falling asleep because I keep thinking of the money I will be making from the morning gap up.

  2. Like you said - Wash...Rinse....Repeat....

    I agree with Steve.

    "It may sound unusual or inconsistent to be strongly bullish in the short run and strongly bearish in the long run. However, a sharp February rally will induce people to buy high, while the subsequent multi-month retreat will cause them to eventually panic and sell low. Since this would result in the maximum number of investors losing money, it's almost surely what is actually going to happen."

  3. in dollar chart....the lower bollinger band has gone down too much ....almost all the time ...dollar does not reverse without touching the lower bollinger band.....and if it goes lower from here....expect 1400 in SnP correction till about 9 Feb

  4. Thanks for the COT chart. On another note, the drums of war are getting louder.

    "... Yaalon’s comments appear to reinforce earlier suggestions by other Israel officials that the window for a possible attack is closing and Israel would need to strike by summer to inflict significant setbacks on Iran’s nuclear facilities. The officials spoke on condition of anonymity under standing guidelines.
    Khamenei answered by repeating Iran’s declarations that it will never roll back its nuclear program, which he had earlier said was now part of the country’s “identity” and a cornerstone of its technological endeavors. ..."


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