Investment Capitalist

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Game Plan – Highly Selective Market Swings via ETF Baskets. Basket Trading is the ONLY THEME for FEBRUARY (or until correlations break 1).

Campaign - Searching for a successful test of S2′s, watching for major break through Nov. lows.

PRIORITY- VIX double bottom

Week of Feb. 02

PST- Ultrashort 7-10yr Tsy.

Top Trades: SKF to 242-250- 153-154 MASSIVE A.Z.  Could
reverse lower near 150/152 level and stay inside flag. Look at VIX for
clue which way this one goes. Major money in this trade on either side.

OIH SHORT ~$81 or < 76.75…then reverse LONG for bounce off $70 area 68/69 Jan. lows…67.90 Jan. lows t/l = 70.30

AMZN gapped to n/l breakout on vol. climax. Momo didn’t clear new highs, does not confirm gap. Back to test 52

BIDU short 140

Watch CAT Fib projection 50% at $27.50 area. Already CLOSED below NOV Lows!

If INDU <8000 then 7909, 7936, 7940 to formeither a shallow double base
from these levels in early January, or the 7882 level from October 10
to test extreme lows of S1. November lows are 7450-7506.  Closing low
is 7552.

.NYK- NYSE Fincl Idx:
Testing Nov. lows in shape of massive 2x bottom. Both points gave TD 12
or 13 triggers. Use 10dSMA as key support (3015). This could be the
only index necessary for signals because it already tested Nov lows.

Those extreme (S1) lows are going to be tested. Monday is almost certain to
be a down day and could become an ugly one. How significant is anyone’s
guess. Could it be correlated to pending stimulus votes coming up in
Congress?

SPX- 804/06 is Jan low. 815 is early Nov. support. 741-747 Nov. lows (752 closing).

OEX- 380, 370.

.RSC- wants to confirm 400 level.

Q’s – Want to test 28 from Jan lows.

No need to catch the knife. Watch tape evolve once these levels are
reached. Will there be a reversal? If there will be, and correlations
have again spiked to 1 across the board, then there is no need to get
distracted by the actions of individual stocks. Especially if building
size in individual names will get picked off by the boxes.

The strategy and game plan is to sit tight and flat, and watch for the
reversal. Once it does, launch the baskets and trade only baskets.

CORRELATIONS ARE 1.0  THIS IS THE ONLY STRATEGY TO USE IN THIS ENVIRONMENT

Remember old lady in bus telling you this is worse than the depression, which she lived through.

OIX weekly bear flag looks very compelling: