Monday, February 1, 2010

Short Squeeze Day

Today GS squeezed the heck out of shorts. SWC, PAL, AUY, CENX, ANV did very well. As joe expected SWC, and PAL held the 50 DMA on Friday's closing and this morning right off the gate they went back up and closed strong for the day. S&P closed above 1087. Gold was up nicely ( up $22), oil & materials up, dollar retraced, SMN took it up the rear end. As I have always said, beware of those algos. We shall see what tomorrow brings. Print machine was on today, some call it Quantative Easing 2.0, heheeee !

Glorious day for the ponzi. Wish I had a crystal ball, but you gotta believe they won't end it here. My 61.8 fib is still in play. So beware shorting. As Joe has warned they can drop the miners to hell. I still have a feeling they may shake out the miners some more but gap trading will still work. DTO was beaten senseless. What a blood bath. Anyway I expect more surprises for all this week. If market gives you an entry on EUO between 18.80 and 19.25 take it, Euro could very well be in trouble, read the following link:
http://www.hurriyetdailynews.com/n.php?n=central-banks-shift-assets-hurting-the-euro-2010-02-01

Do not be confused by the recent action. My core of miners is full. But the intermediate call is for further weakness in the miners. At least we can HOPE. May not occur. But if they push the ponzi to 1240 on the SnP. The core will make a nice trade. For most here hold a core and Keep the majority in CASH. Trade the gaps if you are on a computer.....otherwise hold a core.

9 comments:

  1. Medium volume day, Exxon earnings and other factors and a UUP retrace triggering a commodity short covering didn't help the cause. 1087 target slightly exceeded. The trend can still be considered a strong DOWN unless volume picks up significantly including a daily close over 1104. 1095 is a hurdle if upside continues. Without a breach of 1104 on significantly higher volume than today, there is no bullish case bigger picture. If it reaches 1104 the chances of reversing there are high based on the current technicals.
    On a side note I hope the Fast Money curse does not latch onto the miners. We all know the CNBC record, a mention there is pretty much like ingested arsenic. Don't fret the direction, just play what comes. GL Tomorrow. - Analyze.

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  2. Wait, wait, wait Kli,

    You and your gang are now jumping into cash???

    Well, well, well. How can you guys be in cash if we are about to get hit with hyperinflation? Wouldn't this deplete your purchasing power in terms of essentials?

    I guess it's probably now safe to ask without hearing that "essential" word again. Are you guys now in the deflationary camp?

    Because the last time I checked, when the USD goes up in value, and prices "of essentials" remain constant, you are essentially gaining purchasing power. I want to hear your explanation for this one. Lol

    Dny

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  3. Dny......NO overall true deflation till late 2011 or 2012....we trade here...stagflation for the rest of the year....unless you missed O's budget today....If they take the market down hard with the dollar strengthening then miners take a beating....trade it how you wish...no dfference to me

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  4. This market is confusing many.

    I see several newsletter writers recommending to go to cash. On the other side I see IRA/401k people who want to know if its time to buy the dip.

    You cant invest in a Ponzi you can only trade it or stay away from it.

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  5. Yowsers, look at gold....has to be miners in play today. - Analyze

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  6. The daily technical chart on GDX was looking good into yesterday's close to picked some up. I am buying it directly under the 200-day MA, which is a no-no. I expect a nice bump today and over the next few days, regardless. We'll see...

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  7. Played AMZN short instead of miners, covered here. - Analyze.

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  8. Oil hit $77 and DTO getting trampled! What's everyone's opinion on shorting oil at these levels, maybe ahead of the inventory report tomorrow? Seems like it was oversold around $72 so it got that much needed bounce, I believe it may begin declining again, possibly down to the $60s...

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  9. Yeah Kli,

    I agree with you that miners will take a beating if the USD strengthens. But I don't see an IF there, it is happening and it will continue to happen for a while.

    Anyway, I don't play miners and not even gold at this point. It's so much easier to play SP500. Gold will have it's chance, but initially, it is set to sink with the market.

    Oh.. and another thing, you guys keep focusing on these "baked" in actions. The fed prints, Obama passes a budget (like Bush didn't spend more than all 100 previous presidents combined), etc. But what about the amount of credit getting wiped out every minute of the day, are you guys considering that?

    Dny

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