Sunday

The Inflationist: Weekend Summary 250109

Post a Comment January 25, 2009 – 1:38 pm |   | Permalink |  Print This Post |

Portfolio: 25 Jan 2009

Every blog we follow have confirmed a downtrend in Dow, FTSE, and Asian markets - which is quite concerning given our indicators suggest that we have bottomed and should see a major rally this week. Our portfolio is only up >4% after last weeks bloodbath - having taken $1100 profit in the wild swings. The Inflationist remains defiant and a contrarion, confident of our technical analysis suggesting a major rally is around the corner. Sticking our necks out to be crucified publicly is not going to be good for our credentials - and neither will it help our goal of outperforming David Haselhurst. We hope for a crash on Monday (usually does on Mondays), to anchor further long positions (given that the Dow does not break 7550 ie November lows). The Inflationist aims to have about $20/point long in Dow - with an upside target of 8900 (approximately 1000 points from here giving us a profit of 20k). Yes, we are being greedy when others are fearful! Tony Caldaro, one of our favourite Elliott Wave analyst, have suggested that markets have confirmed a downtrend, with “volatility again increasing (a negative), and the put/call ratio suggests traders are too bullish (a negative)”. With all due respect, The Inflationist will defy the masses and go long - potentially a foolish decision but one which the risk/reward is in our favour even if our technical analysis was wrong. Reason being: The EXIT level is CLEAR (7550), and it is not far from here (ie limited and small loss) compared to the upside of 20k (Dow 8900) which is a very achievable target. In our previous post, we told readers to hope for a crash to make more cash - this is what we have been hoping for, and it is not the time to doubt oneself now that our prayers have been answered. Our indicators suggest a multi-week or even multi-month rally is coming. For that to happen, the market will have to rally hard to make up for last weeks weakness. For us to be wrong, the market will have to break November lows at 7550. 

Our mind is clearest during the weekend. Once the frenzy starts on Monday, emotions run high and that is when people make mistakes and not trade to their plan. So our plan this week is to go long, using the Magik numbers as guidance! Do not short the market unless you have very tight stop losses, or are prepared to transfer some of your wealth to us. Good luck.

TheInflationist will also buy some Gold stocks this week as Gold confirmed an uptrend.