Fundamentals tell you what to buy/sell. Technicals can tell you when to buy/sell.
By Daniel at 1 June, 2009, 11:42 pm
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Nothing is perfect, but I’ll tell you, AAPL @ 85 was a screaming, death-defying, insane buy. GS at $60 was not, because no one knew if they were finished or not (at least not us laymen.)
FAS @ 2.50 looked like absolute doom - headed to zero, but if you watched the TA breakout when it dumped from 8? to 5 ish, that could have been a good time for you to book 50 - 100% profit.
The key now for me is letting this uptrend play out, and then firmly DOUBLE TOP. That’s TA, pattern recognition, whatever, but it’s representative of human beings. The latecomers want another shot at the uptrend and the winners like the chance to double down on a pullback. When that double top explodes, we will retest the bottom (W-shaped recovery).
The key is to be long on the short ETF’s then (FAZ, SRS, etc.) Watch OIL, OIH, DIG, and DUG too. When oil double tops the market will fall with it.
Look at FAS 2 months ago, left for dead at 2.32. It moved to 13. I will not be surprised if FAZ, left for dead between 2 and 4, gets talked down by pundits who say we run the risk of these leveraged ETF’s going to zero.
Note how FAZ has traded 222 million shares (one of the biggest traded stocks/ETF’s, period) vs. FAS’ 174 million. More people are buying FAZ and losing everyday. When the pullback and short trend hits, people are going to pile onto FAZ and it could rocket. Then, the latecomers will pile on.
If the market goes down, the press will openly question Obama’s “mojo.” “Sucker’s rally” will be all over the news.
–A trader
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