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Sunday, March 6, 2011

Market Thought... update

My current market thesis has not changed since Feb 23rd, via the 'acceleration' post. The market appears to be drifting, and for the time being, the drift is sideways. The threat of drifting lower, to the 62SMA is still present, and I still think the downside is limited to the 62SMA as per the 'filter the noise' post.

A few trading notes:

1. I entered a position in the TBT on Friday. If the only scenario is rising rates, might as well be positioned for it. The only instance I can see 10yr rates actually decline is if global instability rises significantly. Right now it is very contained, and various indicators are saying the global economy can more than handle it.

2. I am very tempted to short gasoline, via UGA puts. It's a technical call, with a bit of macro-economic trend mixed in. Gasoline is very overbought, and frankly, I thought current prices would have been the very high-end limit of the current summer driving season (if getting this high at all).

Basically, the Slow stoch is showing a very overbought condition, with a ton of bullishness from the DMI. (The etf is showing a more bullishness than the charting of the continuous contracts.) This should support the CCI to elevate as the price rises. If the CCI rises over the next few days, I will take on this trade via July 2011 50 or 55 strike put.

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