Sunday, November 21, 2010

Weekly review

Two days ago, I declared the recent downtrend over and turned the swing trend arrow around from red to green based on the strength of the technical indicators. Friday's action confirmed that. Look at the latest daily Dow chart. Thursday took us to the top edge of the descending RTC line. That's a bullish setup. Friday's action was entirely above the line. That's the bullish trigger. Notice also how the indicators have all bottomed and begun rising. And finally notice how volume hit a weekly low on Wednesday, the low point of the week, then rose Thursday and finally rose more on Friday. All bullish signs. My long hat remains on.

And although this isn't technical, I can't help but observing that two important pieces of news came out today: first, Ireland finally cried Uncle and decided they needed some help from the EU after all, after denying it for quite a while now. Second, it turns out that North Korea is going into the Atomic bomb business in earnest, to the complete surprise of absolutely no one. With the futures up half to two thirds of a percent this early in the evening (it is now 8:35 PM EST), I'd say the market chose to "accentuate the positive, eliminate the negative". But I have to say that in strategic terms, the implications of a belligerent nuclear armed North Korea run by paranoid schizophrenics are of much more concern to the security and stability of the world than a bunch of Irishmen who can't keep books. Still, you can't fight the charts, and I don't intend to.

Finally, historically, the shortened week before Thanksgiving usually does pretty well. I'm at least not looking for any major meltdowns between now and Turkey day.


Last week was kind of a disappointment for me. Although I was up three days out of five, I finished the week essentially flat. A bad day on Tuesday, the day the Dow tumbled 177, is what did me in. After a full week of trading, I lost all of $58. Oh well. This is the sort of thing where I can take consolation in my low price/high yield portfolio. It still spun off interest last week. So right now, I am up 24.34% YTD, on track for a 36.6% annual return. The Dow meanwhile is up 7.43% YTD.

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