Monday, October 3, 2011


FAZ daily: Rocketing into the higher megaphone

FAZ 1-minute: Shook out weak hands early

7:35 am (Hawaii) Before I hit the sack after a busy work weekend, Dow futures were hovering between -50 and -140. Spot gold was reaching higher. No sight of bullish news out of Europe. And I was long out of any FAZ, just all cash.

I woke up a little while ago to see FAZ had made a run in the past couple of hours from the 66-67 level that I sold at (on Friday). Now the Dow is down 212 (it was at -140 or so 30 minutes ago) and FAZ has risen above 73. That recent pennant has been completely left behind, something that hadn't happened with other recent pennants. The other ones took several days of consolidation before making a move higher, then lower (or lower, then higher) as the shape of a new pennant formed.

What's also interesting to me is that the speed of the moves is accelerating. Traders are getting less interested in political rhetoric and correctness and seem to be paying more attention to the reality of the Eurozone situation. In other words, political sugarcoating is yielding to the fact that Greece still refuses to cut costs and Germany's people are done with supporting their neighbors.

Update 7:43 am FAZ has begun to sell off after the spike above 73, now trading below 72. This is to be expected after a run of more than 10% no matter how effed up things are in economies near and far. Yes, I wish I'd held those shares instead of selling at 66.00. But I didn't have to stress over the weekend about any BS political maneuvering that would've boosted the bankster stocks and hurt FAZ. FAZ is up 9% and the banksters on my Debt Spiral list are down 2-12% with NBG at the bottom.

This pullback is good for anyone seeking a new entry or re-entry point. Not saying I'm in soon, but I'm watching. Just refuse to chase anything up 8-10%. I missed it. It's history. Concentrating on now.

Longer term, I was waiting for a drop to 55, 50 or lower. That's why some consolidation made sense. But with no backstop in Euroland (like our Fed), things are instantly flammable. FAZ could easily go to 81 (recent high) from here now that it's hit 73. Then on to 100. But I am still cautious about holding any FAZ for long here because any announcement/propaganda out of the EU/Greece/Germany would turn this market around. It's all headline risk. As fast as FAZ went from 66 to 73, it would sell off to 60 even faster.

No comments: