Update on USD/CAD Trade

Sure enough, the trade closed out last night while I was asleep...I love it when that happens. The down-trend got a little choppy but it hit the profit target.The horizontal green line is the entry, the red is the stop and the blue is the limit order that was placed. It's not a coincidence that the profit target is about 3 times farther than than the stop...this setup had a favorable risk/reward ratio.

On a different note, there's a lot of chatter on the news wires about Citigroup getting a bailout. Fortunately I added some Citigroup to one of my CNBC portfolios on Friday because it looks like that stock might take off today...only thing that would be better is to have it in my real account but this would never happen because I don't bottom feed for stocks like this when I'm trading my money.

As for the markets in general, they could go either way. If the Citigroup news is big enough we could see a nice rally today but, the path of least resistance still seems to be down.
There are several points of overhead resistance that the market will need to get past and then hold them. The MACD is still bearish but it looks like it could turn up...today will probably be a pivotal day and it will set the tone for the following week. Given what we saw the last three trading days of last week, anything is possible. The only somewhat sure thing about this market is that moves happen very quickly and they tend to be big. Have a good Monday!

Good luck out there.

TLT

Back to Reality

Well, it's obvious that the recent rally was a typical "Bear Run." So what is a bear run? Well, a bear run is a counter-trend rally (rally in a bear market) that is generally very swift, very big, and there is a lot of chatter about the rally being the end of the bear market. This last part is key. The rally has to be big and strong enough to make lots of people actually believe that prices are rebounding and that we're all gonna see blue skies from now on. Next, the euphoria turns to concern as the rally starts to stall and then fear sets back in as the market begins to slide back down and selling commences. The above chart is of the S&P 500 for the last 10 days broken into 15 minute increments. The colored arrows demonstrate the various stages of the bear rally. The first blue arrow shows the overall bear market. Then the purple arrow shows the massive rally. Last, the other blue arrow is where we're at now...watching the market stall and start its slow painful slide back to reality. Good luck out there and be patient, plenty of great opportunities will present themselves before this bear market is over; just don't be in a rush to jump in.

TLT