Wheeee! Isn’t this fun?
We were so giddy with excitement on yesterday’s dip that we went with 12 new long positions while the markets were heading down and the people who didn’t read my morning post were panicking. Things could not have gone better for us as we had a great spike down that let us lighten up on our many successful short plays and turn around and put that cash to work establishing what we hope will be some nice long-term positions, even though long-term in this market has been “more than a month” this year…
Fundamentally, nothing has changed and we’re not letting go of our disaster hedges (in fact we added one yesterday too) but we are happy to do a little bargain hunting from our mainly cash positiions as our Discount Stock Buying Strategy gives us a built-in 20% cushion in our first round. That takes us all the way down to 8,500 on the Dow before we even have to worry about dollar-cost averaging, which also helps us sleep at nights – a nice bonus!
It looks like we also picked the right day to go long on oil and the Euro and short on gold but those are more directional plays and we will be taking money and running as those run out of momentum since we do not have 20% cushions on those entries. We still have our technichals to get through and despite our amazing V-shaped recovery yesterday, Asia was not all that thrilled and only managed weak bounces with the Hang Seng failing to retake 20,000 (19,944) and the BSE still below 17,000 (16,875) while the Nikkei barely held their critical 10,200 line (10,242) in today’s trading and the Shanghai is still languishing at 2,594 but at least has averted a total disaster below 2,500 so far (300 on StockCharts).
There’s no need to annotate these charts – our foreign friends are in deep trouble until they get back over those “death-crossed” 20 dmas (blue lines) and will not be impressive at all until they get over the red 50 dmas. Europe is up about 1% this morning for no particular reason and that’s not reflected in the charts but we’ll be watching the DAX closely this morning to see if they can stay above that critical 6,100 line, which they’ll have to do if the FTSE and CAC are to have any hope of regaining their upside momentum.
Unfortunately, a lot of German…
