Thursday, June 24, 2010

Macro Market Thoughts

This guys is just been on fire since 2007. I can't help but listen.


Sent to you by Dominic via Google Reader:


via T3Live Blog by Brandon Rowley on 6/24/10

By: Scott Redler  

WE are market Timers and our Mantra Has been to TRADE THIS MARKET BOTH LONG AND SHORT

In January the Uptrend broke and it lead to a 9% correction off the highs. In early May the same type of Uptrend broke leading to a 13%-15% correction. If you followed the rules and sold correctly, you had the luxury of testing longs into Major support 1040-1050. If you chased the market at the highs and "bought excitement" you probably capitulated your longs into the emotion of the correction.

The February 5th Reversal lead to a move to new highs. The same Type of Reversal pattern happened on June 6th.
We put a scenario on the table that the rally could lead to a Head and Shoulders Top pattern on June 6th. You measure it along the way. The big area we said to watch will be 1120-1140 to see if it Creates a "Right Shoulder" or does'nt. My eye of the storm theory.

Monday June 21st the market powered to the "Resistance Area" (1120-1140) and we sold our longs into the excitement.
Our "Go To Stocks" all made the most impressive moves, with some Laggards even playing a bit of catch up.

Last Thursday into Friday June 10th-11th was the time to Enter longs, this is when we talked about the Tech sector getting ready to show some momentum. (went over this on CNBC with Larry Kudlow as well). Monday June 21st was your day to lighten up as most on T.V got excited.

Market hit the 50% Retracement Level and sold off hard at 1131—this was time to take some profits as we sold into the Excitement of the China Currency News

This should mark the Top of the "Right Shoulder" of the Head And shoulders Formation I've been isolating since the rally began from the 1040-1050 area.

In the past few weeks we've now seen a Very Poor Job #-- Retail Sales are very soft—Housing is not getting better.
The U.S picture is showing signs of a soft patch-double dip. I do feel the July earnings picture will be Lack Luster
Europe problems still not solved
Koreas still a problem
Israel and the Middle east

On a Micro level we could see an oversold bounce here around 1070-1075. BUT for Investors. I think you will get a better entry in the stock market around 940-980 on the S&P and 9200-9500 on the Dow- This should take place in some point later this Summer. That is the measured move of the bearish technical pattern I've been isolating for weeks.

In Real Life Terms- As a professional trader I will test small longs around here the next day or so. But I have money I want to start a 529 account for my sons College education. I will make the lump sum deposit around 950 at some point next month or so, and then it should do well if I add $150-$200 a month till he goes to college. He's only 20 months old. If you are a baby boomer with a lump sum, I'd say keep in the bank and protect it to live your life

We will get confirmation of this if the Neckline of heavy support breaks at 1040-1050


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