Saturday, May 01, 2010

Market update: April gains almost wiped out!

I have included 3 charts today, one of a 3 year of the Dow and the other a 3 year of the S&P 500. Both charts are identical. If you look at 1 month charts of each you will notice that we have basically wiped out all of the gains for the month and in my view are ready to begin the long awaited correction. The third chart is of the VIX (Volatility) Index. It rose 20 % yesterday and has been erratic the whole week, signaling major change is about to begin. It recently hit a multi year low of 15.23 and since then has dramatically risen. In my view this is setting up the beginning of the long awaited major correction, where the Dow will eventually go to the low last year of 6,400 and it will break below it causing fear and panic unprecedented in our time. How's that for a positive note to start the weekend. But what do I know, I am only guessing. :)

I have my shorts as hedges to this expected drop, as it will play out through Options expiration in October and cause a very somber mood for the Christmas holiday period and beyond. Bah, humbug!

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