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MARKET DIRECTION CALLS
August 2 2011 - Selling Intensifies
August 1 2011 - Bear Returns
July 28 2011 - Before The Open
July 27 2011 - Down But Are We Out?
July 20 2011 - Stock Market Volatility
July 18 2011 - Investors' Nervousness
July 15 2011 - Earnings VS Bleak Data
July 14 2011 - Below 1310
July 13 2011 - Ugly Looking Chart
July 12 2011 - Razor's Edge
July 8 2011 - Nasdaq Leads The Way
July 5 2011 - Expected Weakness
July 1 2011 - Overbought
Jun 28 2011 - July Rally?
Jun 27 2011 - Mixed Signals 
Jun 21 2011 - Bottom Or Bounce?
Jun 16 2011 - Raising Cash
Jun 15 2011 - More Downside To Come?
Jun 14 2011 - Bounce or Bottom?
Jun 12 2011 - Batten Down The Hatches
Jun 6 2011 - Bounce Sometime Soon?
Jun 2 2011 - Sell Signals and Warnings Everywhere
Jun 1 2011 - How Bad Could The Selling Get
Jun 1 2011 - Tread Carefully - Markets Remains Overvalued
May 31 2011 - Success - 100 Day Moving Average Tested
May 17 2011 - Be Careful Out There
Apri 18 2011 - Two Bears Compared
Apr 13 2011 - Why I Bought Puts Today
Apr 4 2011 - Breaking The February Highs
Mar 16 2011 - The Art Of Being Wrong
Mar 15 2011 - Market Remains Resilient
Mar 11 2011 - Trend Is Down
Feb 25 2011 - Trend Turning Bearish
Feb 11 2011 - Still Up - But Watch For June
Jan 3 2011 - Trend Remains Positive
  MARKET DIRECTION CALL
S&P 500
April 13 2011 - Why I Bought Puts Today
Technically I had believed back on April 4 that the S&P would break through the February highs, however while the DOW did just that, the Nasdaq yesterday hit the 50 day Moving Average and broke through. Today it is having a bit of a bounce but the Nasdaq that has led so often since the March 2009 lows is now showing that old familiar double top. I am not sure the double top is in place and technically it's always hard to know exactly how the market is going to react but it has been thrashing about for several sessions and technically the Nasdaq now looks very weak. It could easily move down to the 200 day which would be a very bearish sign indeed. Below is the Nasdaq chart for today.

Below is today's S&P chart - yesterday we moved back to the 50 day and almost the same pattern has emerged - double top.

Meanwhile the DOW chart (below) does not confirm a double top and it has not touched the 50 day EMA either. Instead the DOW did break through Feb highs to set a new intraday high on the 6th of April at 12,450.93. It closed near the highs for the day but has not been able to move higher.

Overall the market looks weak and tired. Institutional buying continues to dry up. The only real plus is that April is one of the more bullish months of the year, but I cannot trade based on that type of statistic. I have to rely on my charts and my instincts. All the charts but 1 are flashing market top for now. Therefore I bought SPY puts this morning on the move higher. As is my strategy, I have a large cash cushion already built up in the SPY puts so I can afford to be wrong. But the strategy of the Cautious Bull which I implemented in January, tells me to close positions for profits and wait for better opportunities which may emerge shortly.

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
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