Sunday, December 5, 2010

Quick week-end summary

Steffan made a pretty good TA of RUA on his blog, please make a read:

The only thing what I miss is a  clear bull situation on SBV. Selling volume is still elevated, it means smarts still sell. Market is still not safe. That MVO on the 1d chart is pretty impressive, and at the moment it eliminates, I expect a pullback. Make no mistake, from now I rather suggest to try to pick the bottom of the upcoming small correction and DONT SHORT. This market has an extreme power behind.

Then who buys?

Smalls and the FED.

Smalls are always make a mistake: buy expensive and freak out at cheap. In order to make money we need to buy cheap and sell on strength. So large investors used last days to get rid of their portions.

And FED. QE2 is in full steam and protects market against any major fall. Let me show you something.

In the last few days we could see sell on strength signals.
Smarts were ready for a next selling cascade, and the job report on Friday was a great opportunity to do that.
Chart above shows what happened. As you can see, market started to fall at the moment of announcement, (automatic algos scan news portals and evaluate in seconds). After HFTs joined to the party, selling continued. FED started to debase dollar, you can see, the 500%+ volume change in the most critical moments and made sure stock market will stabilize. As USD fell at full QE2 steam, silver made an extreme rise with huge volume insertion.
For the time other market participants joined to the party the storm was over. Smarts gave up for a the friday and now they might start to think to make money on long side. No one wants to step in front of Ben.
What I feel will happen is a max 1-3% correction in order to make a dip buy and then, a massive bull cycle starts resulting a completely debased USD. Price of this rise will be serious, next correction in few months will be massive and fierce.
Anyway for that moment let's enjoy the bull show and check the moment when market is not safe: that's the moment to pull our stakes back and be in cash.

For the next days we just sit, enjoy the show, and when market is over of the upcoming minor correction, that's the time to start to buy.

A few months ago I posted a chart identified by my AI, as a W-shape recovery pattern.
Let's see how is it progressing.

Silver, gold: I expect a correction in PM sector, maybe drags down prices lower than the recent lows. That will be a clear signal to make a buy without thinking.

If market makes a clear bull setup without any dip (I seriously doubt), then our remaining stakes make money and we did not miss this bull, we just buy our additional stakes again.

Good luck!

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