The only reason why I’m shorting at this point is because I’m looking for a 50-75 point correction, nothing more. There is a small chance that we can go up to 1220 on the S&P and face a 100 point correction, but I find that highly unlikely. My bet is at 1175-85.

As you read from my March 29th post I started shortin the QQQQ’s and SPY’s at 1175 up until 1225. I had my stop placed at 1230 and my last short sitting at 1220 as stated here. If you listened to my exact words, you would of been running to the bank on Thursday! I’ll be honest though, calling the bottom was near impossible. I’ve never witnessed a single day where we blew past the 50 and 200 day moving averages on the S&P. I exited my QQQQ/SPY shorts around 1144 on the S&P.

Here is a little snapshot of the huge success as recorded by Covester:

Chris P's Track Record on Covestor

I hope this helps everyone, happy trading!

Now for the market, I’ve sold off everything around the 1175 on the S&P. I really don’t see the market surpassing 1185 until we go back to 1100 first. In fact, I’ve taken a small short position on QQQQ (Nasdaq index). If the market continues to move up, I’ll continue to build my SMALL short on QQQQ while I wait for a correction. It’s important to mention that my overall status is still a bull. The only reason why I’m shorting at this point is because I’m looking for a 50-75 point correction, nothing more. There is a small chance that we can go up to 1220 on the S&P and face a 100 point correction, but I find that highly unlikely. My bet is at 1175-85.

Happy trading everyone!

• S&P will be range bound, between 1025 and 1250. We definitely won’t past 1250. I believe our low will be 1050 precisely. If we fall below, buy buy buy!
• Companies that profit and have cash will surge. Companies without the cash are going to get slaughtered. Expect a lot of volatility in the micro perspective of the stock market, but on the macro perspective the index will be range bound.
• Blue chip companies like GE, POM will have a banner years.
• I’m expecting Gold to continue towards $1500-$2000 this year.
• The banking sector will strengthen in the later half of the year with companies like Bank of America leading the charge. I like Citigroup as well.

Overall, this can be a great year for many of us as long as we stick to the right sectors at the right time. I wish everyone luck in their trading!

The Falling Dollar

Word has it that China, Russia, France, and Japan are working behind closed doors to take down the all mighty US dollar. The deal seems to be revolving around the energy sector and pushed heavily by the Arab corner. You probably guessed it by now, oil for the Euro. Or perhaps, oil for gold?

This is speculation, but the recent demand in gold is quite unexplainable. Inflation is not rampant, retail gold sales are actually declinging, but gold price is rising? The only knowledgeable explanation is institutional buying or some kind of unkown demand. Gold can’t rise without demand, and people are having a tough time figuring out where that demand really is. The Independent in the UK has quickly jumped onto this bandwagon and has written a great article worth reading: http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Now the big question is, will the US dollar fail? Personally I don’t believe so but with pressure from around the world as a united front, it certainly can. But it is also important to note that months before the US invaded Iraq, Saddam dropped the dollar for oil. Roughly 1 month ago, Iran has done the same and coincidentally criticism on Iran has climaxed. I’m not sure if I can say this is a coincidence, but its worth noting.

On a personal note, I have been short on the USD/CAD since about 1.28 and have made a hefty profit on my currency trading (I use QuestradeFX for my currency trading). All in all, the US dollar is going to get a lot worse before it gets any better. Enjoy trading everyone!

The stocks which I will be looking at most specifically are Citigroup (C) and General Electric (GE). I like Citigroup at $4.25-45 and I love General Electric at $15.00-50. I’ve taken my first positions late on friday afternoon and I anticipate by the end of October the returns will be substantial. We may see-saw till mid October, but once mid October catches a drift, Citigroup should propell to $6 and General Electric should be at $19. There is one factor that sits in the way and might play against my technicals, and that is earnings. Both companies earn by mid month but since forecasts are fairly conservative, it will be difficult to negatively impact these stocks.

Lets wait and see. Enjoy trading everyone!

Is 1500 on the S&P possible next month? Absolutely not, but in 2010 I certaintly think so. I believe we are going to fight a little battle here at the 1075 range, maybe falling back as low as 1025. But generally speaking the charts are strong and very bullish. We are out of a recession and its only a matter of time till you hear Bernake say it.

On another note, it looks like the US government has no care for the USD and inflation is the clear goal. With that being said, I’ve shorted the USD/CAD at an avg of 1.28 and I have fairly decent positions in GDX, HGU, NGD. I’ve been extremely busy lately with work so I haven’t been able to keep everyone updated as much as I hoped for, but I’ll do my best.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaztRr9ffbyg

If this is true, we can expect many other nations to follow suit. With that being said, it could create a fairly incredible spike. I will keep my eyes on any developments pertaining to this.

• Dow collapsed under 7500 in Q1
• Gold broke the $1000 an ounce mark in Q1

At the time of those predictions, many people doubted me. Clearly, both were nailed with precision. That aside, I’m still a little concerned with how things turned out for me today…

• Shorted HMSY
• Debated on going long on GE, but ultimately opted out of doing so. Things looked icky on the charts.
• Bought shares of AUY (will explain later)
• Built my position on GDX
• Boughs shares of NGD

It was a full day to say the least. Let me review my AUY position…  Ultimately, I’m bullish on this stock but my entrance on AUY was horrible. I sat analyzing the charts for 2 hours after I entered and decided I’m going to hold it over the weekend. Typically, I wanted to wait for a clean pullback in the miners like we witnessed yesterday. Two straight days of pullback would of cleaned up my charts and had me off to the races. So why did I buy AUY? Well gold made a dramatic break upwards and the gains on the miners were modest. I don’t love the trade, but I’m going to live with it.

On another note, we saw another bone crushing day on the stock indexes. The DOW reached new lows, but the midday bounce back has me thinking we are going to see some more volatility going forward. I didn’t touch GE for this exact reason, next week could see sub 7000, and if dramatic enough, that’s when I’ll feel more comfortable taking long positions on consumer staples. Until then, I feel safe in the miners, specifically Silver and Gold stocks.

I hope everyone reaped the gains that I should have today Making only 1% on a day like today feels like crap!