Saturday, April 27, 2013

May Day or MAY DAY!

Talk about a successful test for SPY.  It almost ran all the way up to the highs from two weeks ago.  I am not sure if Thursday PM/Friday softness was some profit taking, or worry about comments Bernanke made. As far as I am concerned if the stochastics are pointing up and we are over the 20 on the hourly, shorting is a fools game.

What is interesting though is we have EVERYBODY waiting for the May crash, Bernanke shovelling in money, the euro forming a right shoulder, and the Yen showing no signs of abating. Talk about cross currents. I also read that the Fed and the BOJ are creating much more money than the local Treasury markets need, and I think that is one reason we see the IEF continue to rise with the broad market, and European debt markets getting a bid.

I think the G-20 blessed Japan's moves is the understanding that they will buy up euro debt and keep the game going a while longer.  It is difficult to see a market collapse unless they lose control over the debt or commodity markets, or Bernanke seeing how much extra currency being created feels like he can create a narrative of an improving economy and say he will dial back a bit on purchases of Treasuries next week.

This move still has one more month, and another 5 to 7% to match  the biggest run on record, and Bernanke is not giving us many choices other than stocks to play with.

For the week ahead, I am in cash as of Friday close.  People who follow my signals had a great week.  We shorted DUST, and it dropped $30, and we rode SLW, SAND, SWC and DDD long.  We even made money long VXX and XIV.

I am uncertain as to direction and there is a lot of news and expectations next week.  I'll probably just play volatility and watch gold, silver, and GDX for some scalps with SAND, SLW, and NUGT or DUST.  Cash is a position, even for those of us addicted to the markets. LOL.

I am going to do some basic and advance charting classes in May, if interested you can register here.

Here are a few charts.

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