Dow 36,000?

When people realize that we're way pass "peak oil", world markets should go absolutely bonkers. Do you have your long term shopping list ready? Do you know which sectors to buy?

Peak oil is a worldwide emergency! It should drive money and massive innovation in order to deliver new solutions to a big problem. Do you get it? Do you understand? We no longer have a choice.

Watch SPWRA on monday; also STP

This stock has been in a range for quite some time, with the 29-30 as strong resistance. Closing above 30 is confirmation of breakout to 45. I don't know whether it's gonna do it next week, considering that there are nearly 30% short interest! It probably needs earth shattering news to accompany the breakout.

Be sure to watch STP as well. STP is trading below its 200dayMA of currently 17.33 . I'm starting to like STP alot because of the Chinese subsidies. STP will get most of the contracts, no doubt. The question remains how serious the Chinese government really is about pushing solar for the long term. STP will reach grid parity within 2 years, claims the Ceo.

Btw, you know I've been pushing solar stocks for about two years now because I believe in the renewable energy revolution and their leading the next (huge) stock market boom. Everyday it seems we are getting closer and closer to taking off for good. If you don't believe in it, maybe consider just buying a tad of SPWRA, FSLR and STP and tuck it away for 5 years and see what happens. You might end up being pleasantly surprised.

Buy selloffs

I'm confident that we'll see SPX 1100 (approximate SPY 110) by year end. There is still so much money on the sideline and so many disbelievers of the rally that started in March. We will not see the march lows again, imo.

You should be able to make lots of money this year if you buy selloffs and sell on rips of good stocks.

The two very tradable stocks that I like to trade are STP and BYD. I think BYD will eventually see $20 by year end and STP, once the solar boom takes hold, will see $100 in a few years.

Sideways

We are set for a few weeks of sideways to lower action for the summer, before the bulls come and bring the monster rally. I still think we will see Dow 12,000 by year end.

It is possible that we could eventually see the low SPX 800's (or even high 700's) within the next two months, but I think that is the worst case scenerio. If you think about it, what isn't already built into the market? We are already priced for DOOMSDAY and collapse of our financial system in March! You go to bear blogs now and they tell you that commercial real-estate is the next shoe to drop. Just about everyone "knows" that, because people everywhere have been talking about it. Commercial real estate foreclosure isn't even the worst thing that can happen to us.

Tell me something new and worst than what is already on the investing public's minds.

Many investors have either sold and/or they have become short term traders. A huge amount of money is still on the sidelines and they won't be able to take the pain of missing the boat further if we rally higher. That's what's been supporting this major rally. Every dip has been, and will continue to be, bought.

We should gap higher and rally hard

tomorrow.

The bear trap is set.

I already entered SPY @ 88.65 late afternoon.

Special Announcement

Obama's goal by 2016 is 35 mph standard on gas powered cars! Wow, that's how long the next bull market should last, all the way to 2016. It all makes perfect sense now! Dow 36,000 within 8 years. The first leg of a new bull market is usually 25% of the entire gains of the bull market. So if Dow sees 12,000-13,000 early next year, that is your cue to get your arses straightened out and get long solars.

Rally Monkey

Contrary to what I expected, mainly a gap down, we gapped way up and never looked back. The 2 day batwings failed, but the big move rarely does and it moves in the direction of the gap. So the idea was to follow the gap, because the big move would be in the direction of that gap. My overnite trade was a loss, which I covered in premarket. Why did I make the overnite trade? Because I expected a gap down that would not get filled, and a huge selloff. Since we appeared we would gap the other way (up), you had to quickly cover if you played the overnite, and go long if you believe what the batwings phenomenon is telling you - big upside move in this case.

The India 17% rally was a major reason why we rallied so hard. It says that there is some stability in other parts of the world. I think as we get closer towards late summer, there will be more good news about the economy. My guess is that we will see Dow 12,000 by year end. Goodbye Meredith and Roubini, you two are but one trick ponies.

I had a chance to look back at how many great companies traded below $10-15 in March. I regret for not being more aggressive in buying them. What was I thinking? They're not gonna go to 0, homey! I must've been influenced by reading too many fear-mongering bear blogs. Dude, we may never see those great prices for a long long long long time.

Prepare for the pullback

Based on Thursday's and Friday's move, I'd expect us to gap down and probably selloff quite a bit on Monday. I mentioned on twitter that I shorted SPY at 88.80 afterhours on Friday.

Cracking SPX 875 (around SPY 87.5) should take us to SPX 830 next support area. Below that is obviously SPX 800. I don't expect the market to pull back much more than that.

Very important day

Friday is very important.

The last two sessions formed the batwings, though imperfect. It says we should gap down tomorrow and we should get a sizable selloff. If we gap up (decently), meaning the batwings formation fails, we will rally huge...thus, absolutely clobbering the bears because many are short and expecting us to head to the at least low 80's on the SPY.

We are at a turning point as of today. Either we come back and retest SPY low 80's, or we zoom higher and possibly not looking back. All is determined by this batwings formation! How exciting is that?

There is a wildcard, though, and that is tomorrow's option's expiration. Maybe tomorrow doesn't mean anything and next monday is the real deal. I, however, have the feeling tomorrow will be quite meaningful and will determine what happens next week.

CME and ICE could zoom higher

source

Following last year's market turmoil, U.S. regulators urged creation of clearinghouses to stabilize the market in credit default swaps, a particular type of derivative valued in trillions of dollars.

Exchanges have already begun to jockey for business clearing OTC derivatives.

The Intercontinental Exchange (NYSE:ICE - News) and CME Group Inc (NasdaqGS:CME - News), which runs the Chicago Mercantile Exchange, are the two main contenders in the race, with ICE benefiting from support from large dealers that own a stake in the company.

The ICE began clearing credit default swaps in March.

CME and ICE will benefit the most from the proposed changes, if they become law, said Fox-Pitt Kelton Cochran Caronia Waller analyst Edward Ditmire in a research note.

"Both own U.S. clearinghouses and have significant over-the-counter experience," Ditmire wrote, adding that the CME is the "biggest winner".


CME was upgraded this morning.

Consolidation on this power move?

The projected move since the breakout at SPY 87 is about 108. I think we could go retest SPY 87 as a possibility. No retest is fine with me too. The selloff on Monday was on pretty light volume, so we can't really say the pullback is here just yet.

Being options expiration week, anything can and does happen. This is where the institutions try to force the stocks to a certain strike price to make the most money (and cause the most pain).


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3 Pros Who Survived The Great Depression

Must read. I rather believe these guys than all the brainfarts whose DNA wasn't yet created during that era.

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How The Bulls Tear Off The Bears' Nuts Today

It's all about the batwings formation. Looks like a bat. here or here . I use it as a one or two day phenomenon to determine market direction the following day, usually accompanies a big gap and big move in the direction it's suppose to go. The bat usually (over 80% of the time) flys back to "land" (where it came from). That usually is the case with 1 day batwings formation. On a two-day batwings formation, it usually does the opposite; over 80% of the times the bat flies away from "land". Even if the batwings formation fails, the move will still be very big, in the wrong direction of course.

Look at SPY on wed and thurs:


Above is a nearly perfect two-day (inverted) batwings formation. This one flies away from land (tuesday). Exactly happened what we would expect.

This formation is extremely powerful in the immediate term, more powerful than ANY indicator I've seen. Bears got brutalized the last 2 weeks because we had several of that formation and bears were on the wrong side. The more perfect the formation is, the more confident I am of the move.


You like that? You'll like this even more. I promise. Start building long term wealth! And stay away from many of the nonsense out there.

FITB has more upside

The stock rallied after the stress test results and an upgrade this morning. It appears most of the banks beat expectation in that they did not need to raise as much capital as analysts thought.

Note the financial etf XLF is near its 200dayMA. Will it bust thru that next week?

I own FITB at $8.00-8.60 . Bought it a bit late but I think $20 could be in the cards.

This regional bank used to be a $40 stock two years ago.

Warren Buffett goes wind and solar

Charlie Munger of Berkshire Hathaway

Please read the last paragraph and call your broker tomorrow.

Invest in solar.

Warren Buffett has never invested in anything he doesn't understand. He never understood technology and hence never invested in it. However, wind and solar are really about technology (especially solar) and he doesn't understand them either. Why is he investing in them? Recently, Buffett also bought shares of a Chinese firm that specializes in all-electric cars and batteries that run them. Again, these things are very technology intensive and no way Buffett himself understands it.

His foray into alternative energy tells me he has a strong idea where the future is headed, even though he doesn't understand the technology.

The alternative energy revolution is coming. Don't be left out.

Bear Market Already Ova?

What is it about this chart that may indicate the bear market is already over? Invert chart if needed.