LG,
>>...1192 held today, like a steel door.<<
Yes, and the close on the futures at 1187 sealed it shut for now, as the bearish harami for the day is officially in place. The scenario i see unfolding now is a shallow move down, to no lower than the mid 1150's, between now and next week, then another visit right back to the 1192 SPX area, and this time, it's gonna hit it!! None of this pulling up .70 short nonsense!! Once that rally fizzles in early Dec., we have nothing to fear but gravity. I don't know how sharp it will fall, or how far just yet, but I'm sure i'll be surprised in some way or another. Selling naked calls at that point is the sure fire winner IMO, but shorting a futures contract or index linked stocks would work fine too if you know when to trade out. Puts may or may not work well, depending on the slope of the descent.
After tracking the primary bear funds (Rydex Ursa, Ursa Pro, and Prudent Bear [BEARX]) for the past few months, it seems that BEARX is clearly the best shorting fund to work with. Their drawdowns are usually less on rallies, and they typically do better on average down days. They definitely do a better job trading than the others i've seen, as they managed to preserve captial much better than the others during this rally.
Are you still SuperBear LG, the most onerous Bear in all of Texas? <g>
Regards,
David |
