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Wednesday, May 13, 2009

The Bull Market vs Bear Market

From WebSurfinMurf's Financial Blog

The bull is fighting the bear market, trying to keep its gains. I am in the camp that the bear will win fight in the next 7 business days. Lets take a look at what was happening with S&P 500.
Notice we are close to hitting the 200 DMA, as first mentioned as a target on this blog back on 3/4/09, and several times after that.

Remember, there is NO GUARANTEE we will hit the 200 DMA. It is quite possible the "Bear market" wins against the Bull Market rally before then and the market takes a nose dive. That is why I have been yelling from the rooftops if you where caught long from August 2008, to consider taking some investments off the table to lock in the gains of the last 9 weeks.

Lets look at the chart, and the trend line, notice we will have our answer in the next 7 business days.
From WebSurfinMurf's Financial Blog

My problem is I gotta be in it to win it, and I got in ahead of this decision point getting short in a big way. But so far, the shorts are doing great in this bull market. Also gold miners are rallying quite well up. This may be a poker tell of what is to come. The over-extended stocks are starting to trend down, while fear is putting money into gold miners for safe keeping.

Lets look at the short plays from April 30th, 9 business days later. (Put mouse cursor over symbols for current prices/charts)

ALL of these stock plays assume you short the stock.

Stock 4/16/9 5/12/09 Percent Gain
AAPL 121.45
BAP 50.01 54.98 -9.9%
BBY 38.5337.06
EAT 18.7816.36 12.9%
DEE 82.72
DECK 62.33 54.94
WYNN 33.4745.18
new entries 4-24-095/12/09 ----
34.89 12.0%
new entries 4-29-095/12/09 ----
26.37 12.4%
CAKE 17.6515.05 14.7%
BWLD 40.60

With the exception of WYNN, the plays overall are doing pretty well, considering it has been a bull market for the last few weeks. As previously mentioned almost all trading ideas came from Happy John. At the TheBullzAndBearz.com, for 5 bucks a month, Kirk lays out the charts for most of these plays, and other plays. He also had a stop for Wynn, which if I had listened, would have cut my losses at about 10%. I can't recommend highly enough for 5 bucks a month to pay for Kirks service, even if just for the chart analysis.

I'll cover depending on each chart and/or when I think the market has over-all been extended too far down.

AAPL is looking like a GREAT short. I may buy more puts on it tomorrow. If WYNN pops up to 50, a great shorting opportunity.

NOTE! I fully expect one or two disaster days, where all of these shorts make a run up. After that however, I would expect a quick pull back down, perhaps even over-night. So I would prefer to be in it since the dates listed over trying to catch an exact top.

A quick look at GDX chart below. I was HUGE long GDX starting at 17, but lost my way at some point. I have only some GDX, but I still have tons of baby gold miners. In any event, I think I would need an announcement that gold can be made from lead to shake me from my current positions. As you can see, GDX @ 42 will be a critical line to cross.

It is possible that the gold miners form their own independent "bull market", and act differently from the rest of the market. Therefore even though my positions are doing absolutely fantastic. there is no way I take one share off the table. GDX target could pass 200 in the next few years, and I wouldn't rule out 1,000 if things go really really bad in the world.
From WebSurfinMurf's Financial Blog

So there you have it a complete round up. I'll post an update on the Lottery Tickets Season two in the next few days. Good Luck. If you are thinking of joining some of these positions, and want "minimal risk", if the SPX does hit the 200 DMA, its a great entry point.

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