My Reasons for my bearish call

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On Monday, the first trading day in 2010, I changed my neutral call I made back when SPX500 was @ 1080 on September 23, 09 to a bearish call @ 1130. This is a trend call that should take months to change. I go on the record now for an imminent pullback from that level at ANY TIME and stays there. It can start today, tomorrow, next week or whenever Mr. Market wanted it to come but it will come. Notice that the last time I made such bearish call was almost a year ago on Feb, 09, 09 (click for chart and blog). So this is a big change for me if you follow me carefully.

Click here for more details about previous market calls

Also I go on the record here that on Monday and Tuesday I started and went full core positions but not limited to the followings: TZA - DRV - FAZ - TYP - EDZ - SSG - BGZ - MWN. Not only common ultra ETFs but also cheap call options long-term dated out of the money on some of these ultra ETFs. I also have a position in ZSL that I'm in and out of it but I have core holding as of today. Not an advice to follow. Just to put things into prospective. If you don't know what am I doing, how I do it, and go ahead and just do it anyway, I don't want to hear from you EVER and I mean EVER! :)

Beside the tools and charts I posted in the previous market analysis articles (Here and Here), as well as the charts I post live in The Hub, I will detail in a series of articles the reasons of why I went with this call:

~ 1. Volume - Click!
~ 2. Money on the side? - Click!
~ 3. Sentiment (IIAS) - Click!
~ 4. Elliott Wave count - Click!
~ 5. The VIX: Click! - More later.

As usual, I hope this will find you and yours as much as you wish to find yourselves. Be happy!

Comments

[luvvinit]

What do you make of copper still going up. Usually that is a leader....thanks...

[GoodVibe]

That is true, luv. Copper is hot but at one point a hot thing will overheat and melt away. :) I do respect the price but never defer to it. I will have a chart for it. Chasing commodities is the risk-trade, same as junk bonds. Once risk taking subsides, Copper will be one of the victims. I just posted a chart on the LinkUs hub about the Aussie - https://admin.minyanville.com/assets/FCK_May2009/File/Theal/0110/markman0106102.png - It is a currency fueled trade as well, which I believe the main reason for the copper huge gains in 2009. Some people believe it is a fundamental reason based on future demand, which I can't speak of. I will leave this to someone smarter than myself. Take care!

[Marc T]

hi GV!

You said that you started a position in ZSL. What's your limit for this counter trend push? I'm starting to get uncomfortable with my silver shorts.

Thanks!

[GoodVibe]

Hi Mark - If you are uncomfortable, chances your size is bigger than your risk tolerance. ZSL is a creature of volatility and constant trend. It can make a new low even before silver make new high. So it will all depend if we develop a steady up uptrend in silver. If not I will keep my position and add to it especially if the downtrend in silver catches wind. So watch the nature of the trend as well as the price. Notice if you are not familiar with me - I don't give another person ANY personal advice about any exact position especially when their money (big or small) on the line. Trading is as personal as it gets. I believe it is wrong to give an advice without knowing you personally. I hope that helped. If not, my sincere apology in advance for your time. GoodVibe

[Kirk]

My pick is SPXU .... I am in 1/2 long position as of today's close... I will either buy more on a pullback (that means if market rallies more), or I will buy more by adding to a winner, if market sells off immediately. Jobs report Friday is here in 2 days!

[luvvinit]

GV, do you keep a link to your full chart list? I am sure you covered this elsewhere, sorry if I missed it.

[Jman]

I agree, timing when the next correction is almost a total guessing game, and so I focused on the long term charts again. One thing that stands out as a warning for major turns is how the $VIX reacts over a period of time, and usually some kind of divergence (higher $VIX/low indices etc) is eveident at those turns. Take a look at my latest updates if you got time.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3449922

PS. I think you do a great job using and explaining the indicators in your charts. Thanks for taking the time to post all your views.