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Trading Log: Hang Men on the $spy and S&p500

Been a tough week coding, but its even tougher gauging the market direction..

Since the last post i have been opening 3 positions:

• Short Sp500 ETF on the SGX. I think the market is due for a correction. it hasn’t come yet but the article below seem to think that we are long overdue for one.
• Long GDX. Purely based on MACD reading. I would need to watch this closely. Gold Stocks seem to fare badly when the market is not doing too well in this deflationary bear. I wouldn’t want this to turn on me.
• Long DBC. Forming a nice bottom.

Today’s article comes from Martin Market Report. do go over and take a look at some good technical analysis.

With the major indices having lost a good amount of momentum, and the market pretty much having gone straight up for 7 weeks running, here and now seems to be an appropriate place and time for a market correction to occur. A look at the weekly candlestick charts of many major indices show that a weekly hangman has formed in many of the charts. This in itself means nothing until the pattern is confirmed. Confirmation would be in the weeklys and show a strong down week this week. Strategically it would be a good time to sell here. The pattern is refuted if the indices move to new weekly highs.

There is another reason, a correction is likely to occur this week. That is that there will be a need to rescue the bond market by keeping interest rates in their tight range. There are two things that can help the bond market.

1. Happy talk from the Fed, and Treasury.

2. Negative action in the stock market.

I think that the market is going to get “Number 2″ this week. But remember, a move to new weekly highs refutes this and dumps “number 2″ on the bears.

Here’s the bond market action. A “save” is very much needed.

[Read More at Martin Market Report >>]

Related posts:

1. Trading Log: Weekly Strategy 23 Aug ’09 $USD,$EEM,$SPY
2. Trading Log: Weekly Strategy
3. Trading Log:Weekly Strategy 30 Aug ’09 $spx,$eem,$gdx
4. Trading Log: $EEM – Trend still in tact, but some worries here and there
5. Trading Log: S&P 500 down 4.66%

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