Wednesday, March 24, 2010

Dow Forecast for 3/24/10

Well, I sure blew that last ES forecast! At this point, after today's rally I don't see any real resistance up to the 11,250 level in the Dow. That's the big overhang from the killer fall of 08. I'll bet there's a lot of people who got caught in that and didn't sell on the way down. They're finally very nearly back to even. Once they get there, which shouldn't be too far from now, they're going to sell out of relief over having finally gotten their original investment back after having watched it sink like a rock through early last year. I'll be watching that level closely.

Latest trades:
bought GAZ today at 10.28. I've been watching this for a while and it looks like it may finally have put in a bottom. Last Thursday's action looked like climactic selling to me, and the next three days put in three consecutive green candles, something it hasn't managed to do since last August. It's also reached oversold RSI levels on the weekly chart. At this point it's fairly speculative, so I only took a small position. We'll see how it plays out.

Meanwhile, gold and AUY continue to consolidate just above $10. I still think it's headed higher, so I'm just hanging onto it even though it's done essentially nothing since I bought it last week.

Monday, March 22, 2010

Performance Update

Many people post market forecasts. Even more like to tell us why what's going on is going on. But hardly anyone ever tells you how they themselves are actually doing. So I will.

As of last week, my trading account is up 6.57% year-to-date. I like to benchmark my performance against the Dow, and that is up 2.97% YTD. So I'm beating the Dow by a factor of a bit more than two so far this year, which I consider to be a respectable number. My daily win/loss ratio (number of days I make money compared to number of days I lose money) is 2.12. I am also 28% in cash right now.

The whole issue of performance metrics is actually worthy of a post or two itself. I'll try to write something about that soon.

ES Forecast for 3/22/10

Well, it appears that we have finally stopped climbing the wall of worry. As you can see from the daily ES chart below, it's been basically nothing but up since putting in that big hammer on 2/25 at 1055 (red vertical bar). Now look at the far right edge. The last bar is still being formed - it reflects the overnight trading into Monday morning as of 1 AM EDT. The two bars before are a classic doji, indicating a possible change of direction and a down candle confirming the doji. Tonight, all three futures are lower by non-trivial amounts. ES is now almost 6 point down from Friday's close.

The passage this evening of Obamacare no doubt had a lot to do with this, but it's all in the charts anyway. I will have my short hat on tomorrow.