There's a Reason the Nosebleeds are Cheap...

The Dow rocketed up 100 points off the open in what appears to be a terminal pattern.  Anyone who has decided to short-term play the corrective pattern by trading long should consider pulling their money off the table, as this market is extremely overbought, and waning fast.

I will most likely have some more updates later, however today is a busy day in the off-line realm.

If you have any questions feel free to email me:  Derek@investophoria.com

Cheers!  And happy Friday!

Derek.

SATURDAY MARCH 6 Updated Chart.

Major Market Crossroads

Furthermore, the average person's perception of ongoing reality compared with their expectations for the future are extremely disjointed.  The current situation (the tangible) is still extremely bleak, according to the consumer confidence index.  Expectations for the future, however, are filled with hope and rallied beautifully with the stock market.  The future is an intangible thing, just like a financial asset, and the psychology/optimism towards the intangible is highly elevated compared to the stark realization of the physical here and now.

The next few trading days are key to determining the next few weeks/months.

Derek.

Goldman Sachs Update

So Goldman experienced a major breakout to the upside, taking it right up to the higher areas of the ideal resistance band we indicated when we first recommended the short position.

This is very positive as it puts the stock into fairly overbought territory with momentum indicators making much lower highs.  We are expecting an imminent turn in GS and another multi-week move lower, which will put our short sell nicely in the black.

Here are the charts from today:

And the Shorter Term Chart

Work on the new website is coming along nicely.  We are going to be making a pretty huge offer for the first 30 days of the site's launch, and are excited at the interest thus far generated.  

The market is still trending sideways-up and it looks like a new high should be put in on the major indices - the secondary indexes should turn down 1-2 days before the primary indexes to lead the market in its next leg down.

Have a great Thursday!

Derek.

The Dow and Gold Today and Tomorrow.

It looks like the precious metals and stocks are going to take another stab in tandem towards a higher-high in this corrective pattern.  Gold has broken up about $15.00 per oz. at the time of this writing.

 

  

There`s not much else to report as per price movements.  Price retracements are taking their time and seem to be meandering up to drag as many into particpation as absolutely possible.  The beginning of major downtrends always take a while to play out and continue to accelerate into the latter stages as pessimism becomes the majority opinion. 

We are obviously not even close to that point right now in any form of investment.  With the major indexes yielding near historic lows and valuations much higher than historically average, as well as fear of inflation keeping money committed to paper gains (for now), time is ideal for a major shakeout of generational mentality towards investment.  Consumer Confidence is pounded down on the `current situation`survey, but still very elevated on the `future expecations`- and this is exactly the type of mentality driving investments right now.  There is no wall of worry here, but hope that fuels this little engine that (did).

The Euro should make a sizeable correction against the USD in the coming week or two, just to shake some of this mass of short speculators off the trade.  This should temporarily keep the price of precious metals and stocks at current levels or slightly above before a resumption of the bear market.

``Gold Breaks the Rules`` was the title of a front-page Yahoo! Finance article over the weekend and yesterday. 

Keep your head out there

Derek.

MARCH 3 Update - We are transferring over the nameservers for the domain right now so if you have any difficulty getting to the site it's only temporary.