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Wednesday, March 18, 2009

How Far does this bull run?

The bull is running, spilling blood on shorts. On Sunday I created a graph to show the possible upside. Today I refined it a little, with the greater picture shown. Since June of last year, the SPX has not broken upwards the 25, 50, and 200 day moving averages. The market has been in a freefall since.

The market is about to break upwards over the 25 moving day average, with possible throw over the 50 day. If this was to occur, the SPX should break the 50 around 900. The 200 day moving average to me is out of the question. If it does, it will route all pessimists, shorting the market.

So the upside (excluding the 200 day) is 6 to 16% up from here. The down is still about 35%. Moral of the story if you where caught long, and are a gambler, you can wait to see if the 50 day is broken upwards. But if we do, better get quickly protective and get out of your longs.
Between the 25 and 50 is by no means certain.

I think the 50 will get broken, if anything, to screw over the shorters/pessimists. The market likes to take the "easy money", and right now that's the market shorts.

If the 50 day moving average is broken, I may put some shorts (option puts) on companies. I'll re-assess at the time, but companies I want to short are: Deck (deckers), MA (MasterCard), buy SRS (double inverse short commercial), AMZN (No Rush), APPLE (no rush), TOL (toll brothers), Moody's (MCO). If I do, it will be a minor position compared to the LONG positions I have on RJA (food), USL (oil), GLD (gold), GDX (Gold miners), and various gold & silver miners.

For now its watch and see, and I'm not adding to my long positions. I do have OIH, USL, DXO, UCO, various gold miners, PFE, PPH, RJA, FEED, VMW, TBT, MU, EMC. Minor positions in FXI, FNI, and lottery tickets.

From WebSurfinMurf's Financial Blog
***CORRECTION**** There is a typo in the chart above, should read 3/17/09, NOT 5/17/09

And the next time you hear someone NO ONE saw this occurring? Watch this November 2006 video. Some of what he predicted is still yet to come.

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