Thursday

Bloodbath

Post a Comment May 20, 2010 – 12:22 pm |   | Permalink |  Print This Post |

Our indicators spiked even higher last night! We fired more shorts in the Dax in our personal portfolio.

It appears that DAX is currently taking a beating - do NOT be deceived, it is still very high compared to other markets (China, Australia). Looks like tonight could be the night that the Dax will crumble. India is next (if you think they have been hit, wait a few more weeks to see what awaits India’s NIFTY). We have read quite a few technical blogs continue to insist that we are in a SECULAR BULL MARKET! I don’t know how they can be bullish in a market like this.

We rang up a US Real estate company last night to enquire about a $5000 USD 3 bed room house in Detroit. Yes you got that right, it’s $5000 (NO ZEROs missing, I confirmed that with the agent). Asked what is going on in Detroit, she says “Its bad sir. Everyone’s losing their jobs.” She sounded SO EXCITED when I said “Could you email me your best property in your portfolio - starting from the most expensive to cheapest. Especially anything by the beach that can be rented out”. I have no intentions of living in the US, but with the USD relatively weak compared to the AUD (no doubt its gonna get weaker in the long term if it continues to print irresponsibly), and the price of property dirt cheap, I would not mind buying up a street to rent it out!

Back to our indicators. Despite shooting even higher last night with markets going down (the ASX is dead!), it suggests there is more downside to go. We will hold back on opening more shorts for now, unless India opens up tomorrow (ie western markets up today). Markets that have fallen alot (China, ASX etc) will try to double peak in the next few weeks/months. Most peaks are followed by subsequent peaks that are very close to it (or slightly above). The market is deceptive so approach it with scepticism and a healthy degree of paranoia.

Conclusion:

1. Hold shorts

2. If ASX(or Nikkei) tank overnight by =/>2% we will open some long ASX hedge.

3. We will also be putting in some low ball bids on our favourite stocks in preparation for a sea of margin calls tomorrow. (that is if the Dow dies overnight).

4. Be very suspicious of move pre-open. The RUT is down 2% and US Tech 1.7% PREOPEN. This could easily reverse course and close up! We will open some longs if it goes any lower preopen.

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(Just woke up 0700AM Australian time)

WTF?!!!?

Let’s take some profits:

Close Russell Short at 635 (entry 700, 11 May) $100/point - $6500 profit.