Saturday, March 14, 2009

Why does history repeat itself?

It is likely NOT anything original, but it hit me yesterday as I was pondering on my own miserable performance last week: you know why history repeats itself? because people never change, or can you say that human nature never change? After another big win last Monday, I stumbled through the rest of the week, along the way, gave back a major chuck of the profits from the week before. It could've been another best week had I not exited too early of my GS calls on the Tuesday (bought when GS around 76) or curtailed the bloating confidence and refrained from shorting overbought but trending stocks. One thing becomes crystal clear: if I don't want the history repeat on me, the only solution is a real change of myself.

Do you think you can really change yourself?

Now on to the market:

While I was right on the overall direction, I obviously underestimated bulls' strength in my last weekend's post. In just 4 days, the major indices recouped over 50% of what they had lost in the previous 4 weeks, and convincingly reclaimed some key technical levels (especially SP500 around 740/750). Also noticeable is that for the first time in weeks, there are finally some better than expected economic news. The way-better-than expected earning news at Citi and BAC could be potentially very significant as they might signal the deceleration of the worsening fundamentals of the financial sector. However, I am yet to be convinced that things are really turning around for good, and I suspect that most of the G20 participants this weekend feel the same, otherwise they probably won't bother to get together for a group therapy and vow together loudly so that they can hide the sinking feelings for now.

I expect the market will overall continue to climb next week or two. However, the further advance is likely to be choppy as the major indices have to fight through lots of overhead resistance in the face of overbought conditions. Before the major indices reach their next key resistance zones (NASDAQ-1470 to 1500, SP500-780 to 840, DOW: 7500-7900), I will generally refrain from opening short positions that meant to be held more than 2-3 days. On the other hand, I will consider SW from long side on decent pullbacks of the market.

To sum all this up: The long and intermediate down trends are intact, but the short-term trend is bullish and could turn into something more substantial than a typical bear market rally, in other words, I don't really know what the heck will happen, you?

1. AAPL: SW-MT-L2 from 89-92, CS below 90, IDS below 88, IT=97; Q-S2 from 99-103, stop just above 103, IT=95.

2. FAZ: speculative L2 if it spikes down towards 32/33, CS below 32, IDS below 30, IT around 50.

3. FSLR: SW-MT-S2 from 139-150, CS just above 150, ITS above 155, IT around 120.

4. GS: SW-MT-L1 from 85-92, CS below 87.5, IDS below 85, IT=98; Q-S2 from 105-110, CS just above 110, IT=95.

5. ICE: Q-CTT between MA50 and MA200 with stops just below/above.

6. JPM: SW-MT if it spikes towards 28, CS just above 28, IT=22

7. MON: ST/MT-L2 from 74-77, stop just below 74, IT=82

8. NUE: MT-S2 from 40-45, stop just above 45, IT=35.

9. RKH: MT-S1 from 50-56, stop just above 56.5, IT=40.

10. SKF: speculative MT-L3 (calls) from 100-120, stop just below 100, IT around 150/160.

11. WFC: MT-S2 from 15.5-20, stop just above 20, IT=12.

1 comment:

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