David Kern's  Instablog

David Kern
Send Message
David Kern is a self directed investor with the goal of capital growth. He posts all his trades and results at: www.abjectavarice.com. A lifelong entrepreneur, David was hailed by Lawnmowing International in 1988 as "a rising celebrity within the inner circle of lawn maintenance professionals... More
My blog:
Abject Avarice - Thoughts on trading amidst fear and greed
  • Monday's Gameplan 0 comments
    Jul 6, 2010 12:35 AM | about stocks: PWER, AMAT, TEL, EMR, ABC, DVA, EW, LXK, MFLX, REW

    After far too much barbecue this weekend, and quite a bit of time looking at charts, I have come to the following conclusions:  (Standby for speculative market prediction…)

    1. The markets are due for a bounce.

    2. It will not be a large bounce, and will likely reverse down before the end of the week.

    3. Hold on to your hat, because this rollercoaster drop isn’t over yet.

    This chart of the S&P 500 shows my train of thought for the broader market.  Note the extended move down last week, and the fact that we’re sitting on a support line.  Support like that was made to be broken, but I expect that the market will retrace a bit higher over the next 72 hours.  That 1060 line on the SPX looks like a good target, and I noticed a lot of similar patterns in other charts this weekend.

    So do I sell now, or watch?  Futures are down modestly as I type this, and my plan is to hold my current positions planning to pick off higher prices at reasonable retracement levels (around 5% higher than current).  Sell orders at those prices are already placed.  My hedge that did so well last week will be closed tomorrow morning, anticipating entering new short positions later in the week.

    Faster and funnier, here are my specific plans for each of my positions:

    TSP Account (Gee wasn’t that a bucket of hurt last week) – Plan is to exit to bonds on Wednesday (possibly Tuesday if the retracement moves quickly).  After that retracement; SPX, EFA, and the rest of the indexes look set for a free fall.  Here are my targets for these indexes by the end of the summer:

    • S&P 500:  Next support level (after a retracement) is 875 to 900.
    • EFA:  Next support is near 36.
    • Wilshire 4500: Bounce to about 525, then freefall
    • Dow:  Though it sounds shocking, I wouldn’t be surprised by DOW 8000 by the end of 2010.
    • AGG (bonds): Look like they’re going to the moon.  People want to park their cash somewhere.

    Here’s the sell orders on deck for this week, let’s see if we can hit these levels on the retracement:

    • PWER: 7.50
    • AMAT: 12.75
    • TEL: 26.75
    • EMR: 46.00
    • ABC: 31.70
    • DVA: 64.00
    • EW: 57.00
    • LXK: 35.00
    • MFLX: 25.00

    I’m off to work early tomorrow, hoping for a quiet open to cash in those calls on REW.

    Disclosure: Long PWER, AMAT, TEL, EMR, ABC, DVA, EW, LXK, MFLX, and REW
Back To David Kern's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • What's wrong with buy & hold? Plenty, you need both time & timing. What's your sell strategy? http://stk.ly/hIZei3 #trade #invest $AAPL
    Jan 24, 2011
  • Want an earnings play w/ insider buying? $HBI makes money in spite of rising commodity prices http://stk.ly/fxXAFF
    Jan 20, 2011
  • BUY LIST: Strong technical names with recent retracement to a clear support level and no issues fundamentally: SIRI, TTM, and IGTE.
    Dec 6, 2010
More »

Latest Comments

Most Commented
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.