Monday

The Inflationist: Weekend Summary 280209

Post a Comment March 2, 2009 – 1:57 am |   | Permalink |  Print This Post |

Our analysis and target of 6820 +/- 50 points is evolving as expected. Markets continue to fall and failed to turn significantly from 7100, recovering only about 4% (7400) before more disappointing news from banks and government bailouts. Our next stop is at around the 6800 mark, but again once markets make lower lows, its anyone guess where this could go. We were lucky to have released half our initial position at 7400, and some of our Friday anchors opened preopen were released as planned before markets opened. We opened some long positions at 7190 which we will aim to close today at the chance of any rebound. At the time of writing, the US Dow futures have gone sub-7000 as we predicted (6987). More pain will come. S1 is at 7000 as per Magik Numbers from last week; and S2 at 6820 - which fits nicely with our analysis. However, the question is could this be another October crash which will take markets down 1000-2000 points to 5000-6000? Who knows. It is just very unusual for it to evolve so quick. At this rate, this depression will be over in no time. And market makers will not profit as much as if they continue to have the markets swinging back and forth, shaking off all longs and shorts. We will update our portfolio shortly.

Addition: Dow is currently 6950 (low of 6877). Our 7190 position was taken out at our stop 7000. Our order to open at 6990 was triggered and 6880 missed out by the spread. Most of our long frenzy late last week was stopped out (but at levels above current Dow levels). The chart morphology is looking uncannily similar to late June/early July 2008 as per our initial analysis. We expect markets to retest the lows later when Dow opens. FTSE is getting absolutely slaughtered, down 4.3% before, and stopped 10 points above Magiks S2 at 3652. We are still hoping for markets to go down - not too much though! Our portfolio is curently only up 21% since January; it was only a week ago that it was up 34%. Our next trade plan is:

• long DJIA at 6850 $5/point and $10/point 6730 (weekly S2)
• Short Euro/AUD at 2.000
• Short USD/AUD at 0.60

Weekend Summary 020309