Tuesday, June 7, 2011

ITS GETTING VERY WARM IN EUROLAND


This is something to mull on tonight....if we hit the top trend line on this chart( thanx MACRO blog) then It will make a nice gamble ....especially if you have a miners core .....disclosure i own EUO.hehhee..letum pump it...I can wait....

10 comments:

  1. comment taken from B Ridholtz blog...re market here
    Tracy L. Knudsen Says:

    June 7th, 2011 at 12:10 pm
    The answer to that question probably lies in the quality of any near term rebound. 90% Downside Days are often followed by 2-7 days of rally, as Supply becomes temporarily exhausted due to the intense selling. The last four 90% Downside Days since the Feb. 18 high were not followed by a rally intense enough to qualify as a 90% Upside Day. And, in each case, the market did not go on to produce a meaningful and sustained advance. The Feb. 22 90% Down Day was followed by a further market decline as was the 90% Down Day on March 10. While the April 18 90% Down Day was followed by a move to new highs in the bull market, the breakout was by a rather small margin and proved unsustainable. Lastly, the June 1 90% Down Day has been followed by continued market weakness.

    The most recent 90% Down Days that have been followed by 90% Upside Days have had much more positive implications for the primary uptrend. For example, a series of 90% Down Days in August 2010 was followed by two 90% Up Days on Sept. 1 and 3. From Sept. 3 through the culmination of the advance on Nov. 5, the S&P 500 gained 11%. Then, following a 90% Down Day on Nov. 16, 2010, the NYSE produced 90% Up Days on Nov. 24 and Dec. 1. From Dec. 1 until the end of the subsequent advance on Feb. 18, the S&P 500 gained 11.4%. Thus, it appears that the powerful combination of one more 90% Downside Days followed by one or more 90% Upside Days results in a much more pronounced advance in the market.
    The bottom line is the market has now experienced two 90% Downside Days in close succession, on June 1 and 6. 90% Down Days tend to be followed by brief rebound rallies. And, with short term indicators fully oversold (in particular the Percent of Lowry Stocks Above their 10-DMA, which is below 10%), the probabilities appear to favor a near term bounce. The quality of that bounce should help determine its potential extent. The lack of the development of a 90% Upside Day indicating strong Demand is now entering the market would imply the advance should prove temporary and a further decline is likely. With yesterday’s decline, the S&P 500 closed below support at the April 18 low, while the DJI and NASDAQ Comp. essentially closed on that low. Should a further decline develop, the next support appears to be at the March 16 reaction low. This low is at 11,555 for the DJI, 1249 for the S&P 500 and 2603 for the NASDAQ Comp.

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  2. kli,

    is your EUO position a hedge for your gold/miner positions? i would guess if euro goes down dollar up which equals gold down. since the gold miners went down with gold up/flat, i am afraid to see what happens to the miners if gold goes down

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  3. rude.......dollar strengthened during euro woes last summer and gold rallied.....not a direct correlation with gold.....but if the market has a big leg down and dollar rallies hard miners will tank......I don't expect a "hard down" market but I like some play with a dollar rally vehicle

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  4. Kli,

    thanks for explanation, alot of variables with gold. why EUO and not UUP?

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  5. you could sell a June call against your miners. Get some premium. Or snuggle up to Joe and short PZG, but you would be late to that party.

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  6. m. armstrong said in his last article that the dollar could be the vechicle that turns on his june 13th turn date.

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  7. Yes Ken and yes rude UUP is fine also......or I may wind up with a cracking EURO and rallying gold miners move......hehehhehe (probably wishful thinking right here)

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  8. After the beatings I have taken, I will sit in cash til I see something more than a 50/50 gamble. I suppose a July straddle play could be done. A move of some kind is coming soon.

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  9. Ken,

    true, something to think about.thanks, i will say, i was somewhat surprised on the beatings the gold miners have taken without gold getting punished. though i shouldnt have been surprised, because Kli, has warned on this blog, how the casino operates.

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  10. Anyone with comments on OXGN, has been trading all over the map?

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