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Wednesday, June 30, 2010

Market Crash trade on deck....again

The market is on a precarious level today, closing at 1041, a hair above the 1040 mark I previously blogged as critical level. Due to the violent nature of the market decline, a crash trade is on deck. Could market crash from here, sure!. But I am not betting on it, YET, But this could be the start. Target is S&P 500 down to 500-600.

I have some shorts, and some longs on gold/gold miners. Thats pretty much my positioning.
I noticed something very interesting, while the market has declined 14.5% since the high back in April, gold miners are up 6.6% during the same period.

That is a little odd since gold miners are also stock, not a pure gold commodity trade play. Also keep in mind 30 year treasury rates are dropping, fast. That indicates market crash also is on deck. But that also gives the US government to do crazy financial games, and use up the last of America's credit card. If they do, this will be the last push up before the swan dive, and it won't last a year like the last time. maybe 3-4 months. maybe.

Keep true to your stops if your long this market!

So cash is king, as always. Below is a chart comparison of S&P 500 and GDX during the same period. interesting.

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