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Closing some longs, adding to January QQQQ puts, maybe shorting EUR/USD


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#1 Jhoe

Jhoe

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Posted 21 December 2010 - 11:59 AM

Nasdaq is right up against some serious resistance....2675 is a 1.618 fib extension of the last pullback in early November, and if you use harmonic patterns, we are getting to the upper end of the potential reversal zone set up in this bearish crab pattern. Not saying the market sells off significantly here, the complacency (which is usually a BAD thing) simply is too strong and for whatever reason most money mgrs feel comfortable holding US equities these days (despite rising UE, a country that borrows a trillion bucks to pay for tax cuts for its richest 10%, rising yields, blah blah blah...I could go on forever), and until something jars this complacency out of bed and rattles the cage a little bit, anything more than a 3-5% correction is extremely unlikely. That being said, I think there'll be a better time to be long in this market, such as below Nasdaq 2600 again, maybe a 50% or 61.8% retracement of the last move up is in order? This might be a good opportunity to get short the euro again, it hasn't really held up well despite a rise in the usual suspects lately, so if theres any sort of pullback in equities and commodities, hard to see the euro hanging in any better, and perhaps we finally see it get down below 1.28 vs the USD where it belongs :) I honestly still can not believe its anywhere near 1.30, after the recent bailouts, considering the increase in the ECB "balance sheet" in the last month or so.