Stock Trader Man

Dow Jones up 3 @ 7,555

Gold up 0.7 @ $984.5

Oil down .29 @ $34.67

THE HINDSIGHT

The market is poised for a major move down as now we have digested all the packages and stimuli and yet we still fail to rally. So what good news is on the horizon for us to go higher…Nichts! The worrying thing is that many are already long over the past few weeks certainly at levels over 8,000 in the Dow Jones and until that level is reclaimed then look for old support level of 6,800. The All Ords index will test the old recent lows of 3,200 and will eventually hit 2,800(the start of the bull market in April 2003). It worries me that there are just too many “experts” saying all the bad news is in the price and are accordingly long; we need a capitulation day when they finally throw in the towel and it’s just a question of when.

The East European banks and indeed countries are facing bankruptcy with nobody able to bail them out, their debts dwarf the IMF’s reserves of $200 bln. This is Europe’s sub prime crisis only its worse as its not about “Joe the Plumber” but countries and banks defaulting on a much bigger scale; at least Uncle Sam bailed out the U.S banks but the Europeans are unable and split on this fatal issue.It’s going to get worse, people just don’t know or even want to know how disastrous this is going to be.

So, how to make money in this environment?

Firstly I would like to update on my recent trades(dated 9th Feb’ under the headline of “Obama beats Beckham”..just in case you are a doubting cynic!)

I traded the following:

1. Bought Fortesque Metals @ $2.25, today at $3.20(remain long with stop profit under$3.00)

2.Bought gold @ $905, now at $985 ..target $1,000.( stop loss at $895)

3.Short BHP at $33.80(recent high $33.86) target $ $29.70( stop loss @ $34.15)

4. Sold U.S 10yr bonds at 2.25 % yield , took profit at $3.00 yield.

5. Bought CBA @ $29.70, exit trade  as banks look set for another major leg down.

NEW TRADES 19th February.

1.Buy Sino Gold @ $6.11 , stop loss @ $5.85, target $7.50

2.Buy Woodside Petroleum @ $33.70, target $36.00, stop loss $33.10

3.Buy, yes buy OZL @ 65 cents , target 82 cents, stop loss @ 57 cents

4.Sell OZ $ @$ 64.00 , stop loss at $65.10 target $60.00

5. Sell Euro v $, around current levels of 1.2600, target $1.200, stop loss $1.2770(just above old support line)

The above are better executed via cfd’s and futures.

For a more detailed and somewhat amusing analysis then go to my company www.trendinvest.com.au

Have a great day

Lou Muddaris

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