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Thursday, January 28, 2010

Dollar Update

There is no question that the trend is up. I do have some doubts relating to the short term movements.

I don't know if we're in the final wave up since the low making a complete 5 waves up and the first wave up (1) therefore starting soon a wave (2) correction or if the correction we had for most of January was actually wave (2). If this is the case we're in for a powerful move up since 3rd waves are the most powerful ones.

I'm still long the Dollar even on my short term stuff, and since I cannot know for sure (I am 50-50 on both scenarios) I just let me stops be triggered if that's the case.

Anyhow, here are the charts for my 2 scenarios:


As for S&P, I had the timing very right yesterday unfortunately 1115 was not achieved and it only reached 1108 off market hours. Anyhow I'm happy with a 20 point profit anyday of the week. Near term, the juncture is the same as USD index but in reverse...

If we see momentum surging both in S&P and USD Index, then the wave (3) scenario will be my main preferred one.

Wednesday, January 27, 2010

TIIIMBERRRR Version 2.0 - not so fast

As I've said before we needed a new low that sported weakening momentum and strength, characteristics of 5th waves. We have had all that and S&P is at strong support so, in my view of the current price action we should go up correcting this whole move down in a 3 wave fashion (up, down, up).

In my opinion is time to either tighten the stops on positions or liquidate shorts and reverse... or if you don't want to get out of shorts, hedge them with longs.

Here's the intraday graph



But even so, one always needs to be careful since the movement can always extend. Nothing is 100%. What we have here is a potential very good risk:return setup based not only on EW but other things such as a cluster of supports, weakening momentum, etc etc.

Friday, January 22, 2010



I was expecting a drop but not this hard... I thought the trees were coming down on Monday only. Oh well, better for me... more bling bling to my pocket :-D

Anyways the trend is clearly down still, although it looks like we're having an extension, I think we may have some rebound on Monday or so...

Now, just because I say there might be a rebound (not only just due to EW structure but because this area has a good support) either don't trade a freakin' rebound or use freakin stops !! I say this because someone came up to me a few weeks back saying he lost money on my advice when I said there was a rebound due on EURUSD, when I clearly stated the trend was down and the goal was to spot tops, not bottoms and he went long anyway.

USE STOPS ! No one will be right every time, and most important than stops is money management. Don't be greedy trying to hit the jackpot, trying to nail that one trade that would set you for life: IT WON'T HAPPEN. Work your way up step by step, just like in a staircase fashion.

Good traders think in a perspective of how much one can lose, bad traders always think how much they can win with a certain trade. All you gotta do is take care of your losses, the winning trades and the profits will take care of themselves if you TAKE CARE of your losses. Cut them short !!

There is a saying that goes "Bulls make money, bears make money, greedy pigs get slaughtered...".

To complete, this actually is a good place to go long (both EW and TA call for a short term bottom), as long as a person uses a stop in case this keeps going and going down. There is lot of support here, and as bearish as I can be I'm not blindfolded and don't expect this to break supports at first try.

So, after all this rambling here's the chart...

Thursday, January 21, 2010

SPX Update

This is my short term view for SPX.

The decline is almost a textbook EW form. It should come lower. I'm basing the 4th waves on the alternation rule, but it may instead of a triangle go a little higher. Yet the short term trend is down therefore I'm not interersted in getting long or trying to pick bottoms...

USD Very long term view

Following are my views on the Dollar very long term (I'm talking years). There are 2 possibilities... One is very bearish and another is very bullish, but both are very bullish for the next months or even couple of years. The problem is at a certain point they diverge.

În white is the long term bullish count, and in blue the bearish down the road.

These laast couple graphs show us why the trend has changed and it has a very good potential. Lot of positive divergences.

Bumpy ride

Good morning everyone...

Nothing new in markets paradise...oh wait! Wrong...

The dollar is in such a hurry have you seen the index lately?

It is following the path I projected a couple months ago so nicely... for anyone that wasn't watching let me put you up to date...

I also referred a couple months ago, that I believed the US Dollar to have made the bottom while the indexes needed one additional leg up, just like it happened in 2008 but in reverse (the indexes were in wave 1 down while the currencies were still in the 5th wave up).

The same seems to be happening now... Currencies had their way for wave 1 down, while indexes were on their B wave. The 2nd correction wave on currencies matched with the last C wave up of indexes.

Now it seems currencies are beginning their waves 3 (the most powerful in EW terms) while indexes just started to roll over.

It still needs confirmation and the daily trend is still up, but if this carries for more one or two days the trend will definitely will change even on the dailies.

My opinion this may well be an important top. The first target now is around 1100 points on S&P, and at this pace it seems it will reach it quickly.

EURUSD seems to be in a hurry for 1.37'ish...

Wednesday, January 20, 2010

Good night everyone...

The drop today, makes me think we're about to roll over with first target at 1000 points.

There are huge divergences going on and to me this smells like DANGER ahead...

Check the divergences that have been going on since pretty much the start of this rally... once the rally goes pop, it will drop very nasty in my careful out there

Sunday, January 17, 2010

Long time no see...

Good weekend everyone...

There have been a lack of posts lately from my part. Today I'm updating a few foreign charts.

Our Sensex from India and introducing the brazilian Bovespa. I'm also very very bullish in this one for a long time. I've said it before that apart from India, I think a few other countries in Southeast Asia are in bull markets in my opinion as well. Those are South Korea and Singapore and also Indonesia, and add that to Brazil.

Brazil actually I believe it's very similar to India. We're in a secular bull market, and this rise is only the start of a Primary 3rd Wave in EW terms. So there's lot of bull market to run in these ones. My opinion is these SECULAR bulls will last around 20 years. Of course we'll have simple bear markets in between, which I've made clear in India for example. I think we'll have a simple Bear Market around the 55,000 level in around 7 years or so. It will be something like this past bear market OR due to the alternation rule in EW terms, some kind of a sideways market (a triangle) very much alike the Dow Jones in the 70's.

But that is still very far away.

My opinion for the last few months was that a top in India was to be reached around the 18,000 level for the end of Wave (1). Indeed it seems to be struggling around that area, and it seems Wave (1) is pretty much finished.

Now the problem is 2nd Waves can retrace deep. I wouldn't be surprised for the coming 2nd Waves in the markets I consider bullish, to be deep, especially considering what I expect from SP500 and other markets. I expect new lows on Western countries' markets, so in this case the scenario could be, all bullish markets to follow SP500 in tandem until a certain point and then diverging.

The bull ones going up, and SP500 and most european countries keep declining.

Still, for long term my bias goes to keep adding capital every month to a fund exposed to these markets (Brazil, India, etc) much alike a passive investing strategy.

As long as these graphs don't show a SELL signal, I wouldn't be worried. If they happen to show a sell signal, I'll issue it here right away, and the prudent thing to do may be to get out. But so far so good, nothing is looking grim on the horizon...

Both trends are up both on Daily and Weekly charts, so we should be good :)

The LMP portfolio is also looking good, and from now on my screeners I will incorporate companies from India and Brazil as long as they also trade in NYSE. We should get a few goodies by incorporating both those markets.

Sunday, January 10, 2010

Portfolio Update

Hello everyone. I first am sorry for not updating the site lately, but it has been kind of hard to keep up with everything that comes in my face.

In my opinion market commentary, I don't think I will be doing as much in 2010. I don't think people take much advantage of it, and then how can people know I am putting the money where my mouth is?

For this year of 2010, I will be more focused in working on  my systems (both the Portfolio and the trading system).

I am thinking deeply of joining some kind of website that audits a person's trades like for example. I need to start building my own official track record with a known entity.

What is collective2 you might ask? Well, go to the website and read... but to sum up, is a website that links my accounts to their server and everytime I make a trade or a recommendation, it issues alerts to whoever is following me. So for instance on the LM Portfolio if I'd say to buy a stock at open tomorrow, it would issue to your e-mail, cell phone or whatever. There is also a possibility to make it automatic. Let's say you'd trust my recommendations enough, you could link your brokerage account to Collective2 servers and everytime I'd make a trade, the position would be opened on your account automatically.

So that will be my goal for 2010. Starting to build a track record of my own and audited as well.

If you're thinking "Oh no, what's the price tag of that?" Zip. I will be issuing alerts free for a long time in order to build that audited record. I will be using both the LM Portfolio as well as the trading system. I don't mind sharing really...

So, I'll launch a poll here on the sides regarding this issue... if you feel that something like would be beneficial just answer YES if not just say NO. In my humble opinion, this would be a step forward to have a more transparent record of results, than just a spreadsheet posted here in the website.

Let me know what you think.

Finally, I'll post the spreadsheet (oh yeah the spreadsheet) of LM Portfolio and it's performance all updated with the last purchases etc.

The cells filled with grey belong to stocks that are not anymore part of our portfolio and were sold.

Sunday, January 3, 2010

2010 resolutions and LMT update

Hello everyone. Happy new year :-D

I hope everyone spent a good time during these holidays. 2010 is now in front of us, and it should be a tough year economically speaking in my opinion. During this year we'll have a lot of possible catalysts to reignite what we experienced in 2008. What happened in 2008 was mostly mainstreamed in the stock markets and the sub-prime factor, this year though the catalysts will come from the mother of all markets: sovereign debt. Greece, is in deep trouble, and no matter what the IMF says or their prime minister they soon will have to either default on their debt or to get intervention from the exterior, which in my opinion is a matter of months in order to happen. Portugal and Ireland would soon follow Greece's footsteps, unfortunately for me because I live in this beautiful country but is managed in such a bad way... sooner or later we will also have to recur to foreign help.

For the USD I think it will be a rosy year indeed. What I see from USD right now is a lot of strength signals and it should lead the index towards the 90-95 level. At least it's what I expect.

Now regarding the Low Maintenance Portfolio. I know we're a few days behind, since I didn't make any new posts the last 9 days. The change date should've been the 26th, but oh well, just a few days behind won't make a single dent on our expectations.

So for tomorrow we're selling from the Portfolio the following stocks:

- Terra Industries
- Valco Energy
- Garmin
- Time Warner (this was our star stock for the past year with 200+% in profits)
- Marvel (which was sold when Disney made the announcement)

The capital coming from the sales of these stocks will be allocated into 5-6 new stocks equally. If you're new and have no stocks or have only the stocks from past September, then 25% of your initial capital should be allocated equally between 5-6 stocks.

So the new stocks will be:

- Cherokee (CHKE)

- Aeropostale Inc (ARO) - (can't believe how I didn't remember this one before... I bought a lot of clothes in this store when I was in the States...although in EW terms and techically I don't like it, but hey this is a fundamental/value based strategy not TA)

- FluorCorp (FLR)

- Graham Corp (GHM)

- Sturm, Ruger & Co. Inc. (RGR)

...and finally:

- Gamestop. This one already is in our portfolio and once again made it through our screening. Since I believe in the company, and since it still shows up as one of the best companies around, then we can save ourselves some transaction costs and keep this one in the portfolio.

So in summary, we have 3 small caps and 3 medium caps (one that already was in our portfolio).

Let's hope that all of these turn out like Time Warner.

Note: Prices of sale and purchase taken into consideration will be tomorrow's OPENING price.


There is a problem with this post. I made a mistake to name Graham Corp. (GHM) since it was already in our portfolio from the previous quarter.  Therefore we're still missing one stock. This stock is Energy Recovery Inc (ERII).

I will consider tomorrow's opening price for this pick, so the results provided on this site could be easily attainable for anyone tracking it.

Once again I apologize for the mistake 

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