A Bullish and Bearish Case On The Market (3/19/2010)

Alright, alright...  Where are we headed people?  I've absorbed many different opinions from the tele, news stories and blogs.  $SPY made new highs, oil couldn't break resistance...yet, $GLD is making lower highs (watch that new symmetrical triangle though) and the USDX could breakout again above $81. We'll see what happens on Monday post-healthcare vote.  The best thing to do is watch the chart imo.  If the S&P breaks below 1,150 again it will be a failed breakout and potential double top, or a prep for a boring sideways channel.  I will chart out a bunch of sh*t later.   I'll leave you with a bullish and bearish case on the market.  Read this post at Beanieville Inc: Bears calling for major top, again and below is a video of Robert Prechter (Elliott Wave International) on CNBC warning about the next wave down coming. Good luck.


  1. Safest thing to do right now is play ratios. The cartel sells a lot of gold futures and buys a lot of SPX futures, or so they tell me, and thus we have another cup-and-handle on the ratio continueing the secular trend. Nominal stock market has been sideways since 2000 but priced in gold the trend has been inexorably lower.

  2. Yeah agree, remember my post from last month? I went over the gld/spy ratio. It couldn't break above that trend. http://www.distressedvolatility.com/2010/02/gldspy-ratio-at-10-been-swing-dancing.html. GLD/SPY was at .99 last month, now it's at .93. Support is at .90 from AUG '09, below that it's at .80. Does it mean disinflationary recovery, or just market recovery catalyzed by the forthcoming cheap $ m&a wave everyone is talking about?

  3. I remember it well. Seems like a good ratio set-up, time to watch the underlyings for tactical entries while the theta burns a bit. The trouble playing ratios with futures is you end up with a fat red number on one side of the trade, even if the black one is bigger, the trouble is playing ratios with options is that they take time to break and don't obey typical momentum set-ups such as fractal winding. I'm betting the coil break-out is a false one and gold will snap back to out-perform the SPX, whether that means doing "less bad" or doing better.

    Regarding M&A, the space I'm in is white hot with investment flows, the other social game developer in Argentina just got 5 million from Playdom and the talent scouring is on, now every other company wants in on the action. These numbers are trivially small but in my little bubble things feel inflationary.

    Hey what do you think of Hecla Mining? I'm thinking of doing a buy-write but I want to wait until the VIX has another spike and/or the thing gets beat down back to the $4 range.

  4. Interesting about social gaming. I'm pretty sure social finance is in a structural bull as well. It's cool to see the StockTwits stream on CNN Money. Yeah regarding gold I'd like to see some technical confirmation. Three lower highs on GLD, 50DMA pierce on Fri just says wait, but that chart could turn into a $ick inverse H&S at any moment. I'll let those cartels decide what they want to do. Regarding Hecla and SLV I'd wait for confirmation, look at those 3 lower highs. The silver securities are forming decent symmetrical triangles, as is GLD, and they are just a tick above their 50DMAs. So I guess watch next week, a big move is coming though imho.



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