Tuesday 26 June 2012

Bear Flag and Unfilled Gap.


I am not an expert in TA, not by a long shot. More of an arm chair technical analyst. But it looks like a bear flag to me. What do you think?

Also there is this area of unfilled gap which I have been writing about for a while and that is my target area before any bounce. Well, if the market decides to ignore that gap, I cannot argue with it but I think chances are high that tomorrow we will see another down day and maybe we will get a chance to fill that gap. That is also the area of strong support. All in all, not yet right time to play for the bounce.

If you look at the chart of yesterday, we were due for this green day. Should I call this an Analog? Nah! I don’t have much faith on Analogs. They are fun to watch when they happen, but it is suicidal to take action based on Analogs. We better have some other edge in trading or investing.

Nothing changed fundamentally in the world today. Despite the tension in Middle East, Crude did not budge much. Gold is hanging there by a thread. Euro land remained front and centre of the market. And no one is talking about the bigger mess that is America. But this constant up and down without a clear direction is draining for both the bulls and bears. You really have to be super smart to win in this market or luck or both. The last sell-off which took SPX from 1358 to 1314 has severely discouraged the bulls. Today it gained a mere 6 points which it may give back tomorrow and some more. If the plan is to discourage retail and then jack up the whole thing on super light volume, then it is successful. We will soon know. Even if we want to play for a bounce, it has to be super quick and for a very short time.

Every world leader is talking of growth and austerity. The leaders of the failed states like Greece or Spain are blaming Austerity for the ills of their country. But where is this “Austerity” that they keep talking about? They have not reduced spending. Per latest report, Greece did not reduce the number of its public sector employees that it agreed when it took the bailout. Why I am not surprised. What austerity measures Spain took or for that matter France or Britain? What % of GDP they saved through Austerity? What these countries have been doing all these years if they are talking about Growth only now? Politicians are same everywhere be it Spain or Uganda. May be now-a-days they are less corrupt in Uganda.

But these things will run its own course and nothing will change however we may shout. We just want to eke out a living and survive from these crooks. That’s it for today. Thanks for reading http://bbfinance.blogspot.com/ . Please do re-tweet of you think it is useful.

10 comments:

  1. Where do you believe gold is headed? Also are you still holding on to GLD?

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    1. I took a position in GLD before the last FOMC as insurance against sudden QE, although I never expected it. Gold will go up only when QE is announced which may be August. I plan to get out of GLD even if at a loss, in the next bounce which is coming soon.
      Long term, I think Gold can reach $ 2500/ OZ but need a better entry.

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    2. Expecting GLD to dive to 141 before a bounce comes.

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  2. Hello, first of all thanks a lot for keeping us well informed, really enjoy to read your blog! All i know is since i follow you (not so long ago 3-4 weeks) you have nailed the market. So, congrats for that.

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    1. Thanks :)Sometimes I get lucky but I really do not know any better than the next guy.Otherwise I would be retired by now.

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    2. Thanks :)Sometimes I get lucky but I really do not know any better than the next guy.Otherwise I would be retired by now.

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    3. I think you are at your best, when you have no position. Our position often brings bias..

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    4. You may be absolutely right and have given me some thoughts to go over. If I ever decide to do full time market news letter, I should have no position as it could result in positional bias.
      Thanks for the new idea.

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  3. There are gaps stay unfilled for months, for example one in the beginning of February has been filled 3.5 months later. This one is probably going to be filled much faster since the market is not so strong.

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    1. You are right. There is no guarantee that this gap will be fulfilled this week before the bounce. However a touch below SPY 130, upto 61.8 Fib level would satisfy the call.

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