Saturday, October 6, 2012

The Week Ahead - Inflection points

I am a voracious reader, and love to explore all viewpoints, even though I hold certain convictions already.  This allows me to test my assumptions and their validity.  My view is we have a struggle over the next three weeks, ultimately moving higher, but with alot more volatility.  I think Friday gave us a test of that.

Reading what the cycle guys, the Gann guys, and the fractal guys (guys is a neutral term, I am from Philly, after all) are saying, is to expect a pivot of some sort this week.  The problem is everyone is pointing in different directions or saying it will be big, but not sure which way.

I think caution is warranted, some swanlings are hatching; California running out of gasoline, Obama totally checked out of the debates, Iran going into hyperinflation, Spain et al running out of cash, pretty crappy earnings reports coming out, strikes popping up everywhere, food inflation crushing the 3rd world, Foxconn losing control of their factory, fiscal cliffs, and higher taxes for 2013.  Now is that a wall of worry to surmount, or a tsunami coming our way? Or a Ghostbuster movie trailer.

I have gone from trading the daily, to the 60 minute, and now I am writing credit spreads and day trading on the 10 minute. I will be very careful owning any equities for now, and I was shorting volatility, but that can be fatal here soon and I stopped.  I am keeping UVXY on my watch list as a canary in the coal mine, also AAPL (which is the market).

On the bright side, this week offered great trading again. I expect the entire run up to the election to be closer to Friday's action.  Stay engaged.  Follow me on Twitter (select upper right of this page), I have a great trade and a way to play what I think is going to happen.

Here are my favorite charts, and my thoughts embedded.  Enjoy.


  1. Going thru some charts this Saturday evening (having returned to work, this is my only spare time!) and what jumped out at me was the chart of UUP (and a similar chart of EUO). Looks like the dollar has based here and is ready for a bounce. That would drag the precious metals down into the ranges you have outlined above; in fact probably all of the above charts would fall in response to a rising dollar.

    1. Rob, what I worry about is that the dollar tags the underbelly of the trendline it broke, then falls away.

  2. Bob, drop me an email if you are going to that Hawaii solar training