Wednesday, June 15, 2011

15 June 2011

I received an email from a well-respected friend today telling me he bailed out of all of his stocks (and I needed to as well) because the market is going to crash.

I laughed a bit because the time to sell was 7% ago.  Granted, in terms of years or months, he will probably end up being right.  I am a perfectionist, and one thing I always avoid is chasing a mature trend for pennies only to regret it two days later. 

VIX broke my trendline today and closed above its upper Bollinger Band.  This really could explode now - especially if other signals weren't so oversold. Note that my trendline gives some room for overshooting.  This is definitely earlier than I thought it would happen, but as I always say, anything can happen.  RBS and STD both lost the long-term support I talked about last week, but we can maybe get a better entry on those.
 Medium term extended.
McClellan Oscillator closed substantially higher than its last low despite the indexes making new lows.  Bullish divergence.
A bounce in the short term hold short.  Looks like a retrace to me.

Some silver equities are maintaining strength - see GPL.  GDX also didn't close at new lows today.

Dollar has broken long term resistance line.

"Bankruptcies of governments have, on the whole, done less harm to mankind than their ability to raise loans."
R. H. Tawney

He might have underestimated the size and influence modern governments would end up having.

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