Jan 30 2010
Boom
Game over. Why am I happy about this? This is why. That currency hedge was 20% of my net worth. Selling foreign currencies near the bottom for the US dollar = good exit. 10% win over 2 years, not the greatest, but I’ll gladly take it.
Up and away it goes. If you believe in Elliot waves, this right here is wave 3 and the USD index is going to 81.
Meanwhile, the S&P 500 broke the critical 1080 level this week and the next solid level of support is down around 1030. If you consider the price action the last few days to be a bear flag, then the target on the break of the flag also comes out to about 1030.
However, looking at a weekly chart we see that the 38.2% retracement from the peak to the piss bottom is 1014 and that level is also worth watching. Below that, there’s nothing meaningful until 950 which is where I last had my nutz cut off shorting the market. Thankfully I wasn’t too stubborn of a bear that time.
Technical analysis always looks good in retrospect, but man, that big fat downward trendline was spot on. It’s nearly perfect. Also note that this is the first time the index has been under to 20 week moving average in quite some time.
Am I going to trade this? Absolutely not. I’ve come to realize that there are much more important things in life. I am perfectly happy with getting 1.35% in my savings account and buying US Treasuries in my Roth IRA. Yes, it is dull boring, but I don’t care.