Optimistic? Yes….

… Informative?  Not so much.  I love the optimism, but in trying times, I’m not all about sitting by a campfire smiling and laughing while playing boardgames, cooking hot dogs, cuddling with your stuffed animals, and listening to the hippie strumming koom bay yah on his guitar.  As I have been reiterating since Barack has been elected, I must PLEAD to all of you that this man is not only clueless as to what he is doing with American tax dollars, but he is also clueless as to how to informatively explain what he plans to do with the $1.5 trillion budget deficit, the Health care mess, the Housing and Financial crisis, as well as the way he plans on addressing the lack of demand coming from the Oil and Gas industry.  I must allow you to digest his $15 billion cash deposit PER YEAR to inject clean coal, solar power, and wind power projects into our “Energy Crisis.”  Again, just another way to develop more government run jobs.  I must defect for a second, as I profess that the government does not have the skills to develop these programs without private businesses.  The people who run these businesses will not expand their workforce just because of this Stimulus Plan (employers are cutting jobs for a reason, people).

As I sit and waste my hour listening to our President babble and drool over the Stimulus Plan, I have also been busy with my technical analysis for Wednesday .  I am 51% short, 15% long, 34% cash, and proud of it, for on Wednesday we dive like the Titanic.
Let’s start with the short position charts:

UltraShort Real Estate ProShares ETF (SRS)  10 Day, 15 Minute

Direxion Financial Bear 3X Shares ETF (FAZ)  10 Day, 15 Minute

SRS is at its $70.09 support from the open yesterday, and the price-to-volume pattern shows a sell-off convergence.  My opinion is this thing hits the ground running and doesn’t stop tomorrow until mid-day, or if lucky, for the entire trading session.  FAZ’s situation is a little different, but with an already negative market outlook for tomorrow and a lack of direction in the financial markets after Obama’s speech, there should be a financial sector sell-off tomorrow causing FAZ to move upward.  Another indicator for a probable spike is the lack of sell-off volume towards the close in FAZ today.  After a price sell-off of exorbitant losses like today, the financial sector as a whole will begin to show signs of weakness yet again, giving FAZ a definite edge and showing that today was just a bullish head fake, or a “short-term squeeze” if you will.
As for the S&P 500 (^GSPC) chart:

$SPX  20 Day
Key Points for the $SPX:

• Support = 743.09
• Resistance = 776.39
• Trading in a Negatively Trending Channel
• Futures are currently -4.25 points.

In the past 10 Days, the average $SPX point move from open-to-open is 19 pts.  Correlation wise, the $SPX is under the perfection of 1 at .989, which is currently an 8 point average swing over a 10 day period.  Today’s correlation was the highest open-over-open correlation we’ve seen in the past 10 days, topping the charts with 1.038.  Looking at the $SPX mathematically using a 10 day linear regression, Thursday’s open could be as low as 740.50 (looking into the crystal ball a tad), and in the context of tomorrow, we could retest our recent lows of 743.09.  Mathematics doesn’t factor in emotions, however, so it could be better or worse than anticipated.

My portfolio is as follows:

• SRS @ $71.01 (25% Exposure)  No Stop Set Yet
• FAZ @ $58.31 (26% Exposure)  No Stop Set Yet
• SLB @ $36.95 (15% Exposure)  Stop @ $34.50
• Caaaaaaash (35%)

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