Took losses on currency positions

I lost on the breakout of the EUR at 1.40 and Pound at 1.60. Still holding due to a correction. The medium term timing is still good, but the short term timing is horrible.



Here is a technical analysis of the S&P 500 index in the 2002 bear market. I still believe this is a bear market. Essentially our plan is to add to the SPY shorts when it crosses the 200 day EMA. If it goes down, hold on to positions until you get high volume sell-offs. The RSI has to be below 30 for at least 3 days before closing the shorts in a defensive fashion. Maybe then, consider going long on to profit from a bear market rally.





For a trip down memory lane, I'll let Robertson Morrow describe the 2002 situation:

In mid-2001, as recession hit, the stock market wobbled. From April to September, the S&P 500 fell 30%, but September 11th masked the downturn. Easy victory in Afghanistan and no further acts of mass terrorism reassured Americans. By March 2002, most believed that we had conquered the recession. Magazines and newspapers headlined the triumph, and the Dow reached almost 10,600, just 10% off its January 2000 peak. But the victory was an illusion based on foreign money. In April 2002, the dollar began to break, falling more than 15% in four months, and the stock market followed the dollar down. By July 2002, the market had lost almost 30%, and Americans began to turn pessimistic. The late bubble was over.

http://www.amconmag.com/article/2002/nov/04/00014//

Peter Thiel is right; we are in a government bubble. (And I am saying this as person who leans Social Democratic)... I suppose we would be near a top when people actually believe the stimulus and Bernanke's printing is working.