"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions."
-
Sun Tzu

Wednesday, November 30, 2011

2011 Linkfest: How I Trade

 I received a lot of positive feedback on my latest online model presentation. One question was about the trading tools that I'm using to determine turning points and market direction, since the Prezi was only meant to give an overview for investors, who are not deeply into technical trading concepts.

Tuesday, November 29, 2011

PREZI Covestor Model Presentation

I was experimenting with the PREZI online presentation tool last weekend and took the opportunity to create some "slides" discussing the philosophy behind the Technical Swing Covestor Model Portfolio:


Any feedback is more than welcome. I love the PREZI tool. In order to use it effectivly, you really need to forget everything you learnt about powerpoint.

Enjoy

Monday, November 28, 2011

How to Trade a Possible Bounce

Furtures have been strong this morning on Italy bailout news. Since markets are heavily oversold, we might see a nice bounce, which still could be traded from the long side.

Wednesday, November 23, 2011

The Chart Every Equity Trader Should Watch

Since we are all Forex traders these days due to the high correlation between stocks and the Euro, here is the chart that every equity trader needs to watch: the Euro intraday.

Decling Volatility: A Bullish Sign?

The market has lost abound five percent so far in November. Even though I more or less declared myself a bear with my prior post, I have to recognize some potentially positive developments: volatility has been declining in recent weeks. The situation reminds me of the 2010 summer decline:

Monday, November 21, 2011

Is This 2008 Again?

It is quite striking how charts are starting to look similar to the ones of the 2007/08 top. Here is what happened to the S&P 500 then and now:

Friday, November 18, 2011

Covestor Model Portfolio Update

Yesterday was an important day from the technical point of view: major indices broke out of an important "symmetric triangle chart formation " to the downside. Classical chart analysis suggests significantly lower prices ahead. The best case scenario for markets and short-term traders like myself is a quick 2-3 day rebound, followed by a major drop. The rebound would create wonderful shorting opportunities and a weak rally would further confirm the valitity of the breakdown:

Tuesday, November 15, 2011

Determining Breakout Direction

In recent weeks, the chart of the S&P 500 has been forming a "symetric triangle" pattern. Direction of the breakout should determine the intermediate term trend:

Monday, November 14, 2011

Euro Decoupling from US Stocks?

I wrote a post the other day on the FXE-SPY correlation. Since the beginning of November, however, we have been seeing a slight divergence between Euro and US stocks:

Friday, November 11, 2011

Why I Would Still Buy MCD on Every Dip

Here is some cool Peter Lynch type of research on McDonald's:


Lessons from the Latest Intraday SPY/FXE Correlation


The Wall Street Journal recently discussed the high correlation between US stocks and the Euro. Effectively, every US equity investor is a currency trader these days. While the Journal highlighted the longer term picture using a 30 day correlation, it might be interesting to analyze intraday relations.

Wednesday, November 2, 2011

What's Up with Gold?

Today, I increased my long position in Gold. Something is going on and the current price action offers a very attractive risk/reward profile.