On March 6,2009 the Dow Jones posted a low at 6,469.95… Fast Forward to this November 5th, just 18 trading sessions ago when we traded to a high at 11,451.53…
I am not trying to call a high, but for a very long time, if you’ve been following my daily musings, I have felt that a rally up to 11,469.95 was inevitable. For some, a high at 11,451, just 18 points away from a perfect 5,000 point rally, was close enough.
I myself got bearish there and although it took a little time, had my short positions pay off. I still have some 10,700 puts on which I will hold onto. However, for me its more important to make money than to not admit a position was on the wrong way. I could care less if I am right or wrong on my analysis. Ed Seykota told me that when I met him in San Francisco in 1991. Detach your ego from your decisions. Make a decision and then manage the results. Sounds so easy… In practice, as competitive human beings, very often we attach too much to “being right”.
That being said, I think we will see the 11,469.95 level pierced here before the end of the year. And I still think the Dem’s will play it up, with a cover on Newsweek or Time with Obama riding a bull from the 09 lows for the “5,000 point bounce back”.
I will want to sell it there the first time. I will want to sell it the second time. The third time we test it, we should move above and “explore the space” above. Right about that time, we will have some guru making the rounds on all the morning tv talk shows, telling the public “Where to put $1,000.00 to make the most of the rally”… where were those dudes back in March of 2009? Most likely sitting in their darkened clothes closets with their eyes closed, rocking back and forth, hoping the market bounced back… They certainly were not out preaching the gospel of buy and hold at that time. If they were, they would have been right, but they would have not had an audience.
So that’s that. Look for that high print.
Good Trading
