Stock Market Choke Points

part 9B

by Brian Stoll, TimingStrategies.com | September 19, 2008

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This will be a brief management snapshot on the S&P for our Rydex  portfolios. We went straight long 30% indices  basket on Weds. 20080917 short 10% U.S Government Bonds long Japan 5% on Thurs.20080918 and also have been long 25% energy, precious,  metals and materials since  approximately 20080909. As of today Fri. 20080919 at 11:30 As I write this everything looks great from the long side.  I doubt that will last for very long. I will not attempt to go over the demerits of the latest Wall Street / Washington Cabal, there is plenty of opinions on that everywhere else. Price action and portfolio management is the primary concern.

SPY

Near term selling down to ~ 123.50 is low risk high probability estimation to as deep as 120.50 on the SPY. Longer term this thing could get easily get walked up to ~ 132.50 and jammed as high as 138.50 on the SPY. Which ever one occurs first will help influence and determine how we will manage it in the next several days. If the SPY trades to at least 123.50 – 120.50 first before trading 132.50, then the current estimation is we should be able to then achieve the 138.50 price tag later in the year. The lows of 113.80 on the SPY should hold until at least the election longer term the estimation is that they will be taken out with a greater vengeance more than  anything we’ve yet to see from the current bear market. Should prices achieve the 138.00 -138.50  price tag within the next 3-6 months, it is our current estimation that it will be another GIFT to get short again in similar fashion as was described in our Stock Market Choke Points for 2008 part 3 in February of this year. In the near term (1-8 days) , chopsaw price action is assured, with the estimation of  higher prices for the S&P in the  mid-term (5-20 days) and position size will be smaller than usual until can re-gauged.

This not a recommendation to buy, sell or take any action in any investment whatsoever. Please feel free to contact us with any questions.

© 2008 Brian Stoll
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Brian Stoll | TimingStrategies.com | Registered Investment Advisor
Newport, California | Email | Website

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