Running on Empty? Who Cares? (Updated with KO Chart)

My call last November before Ben Bernank announced QE2 that Dow would reach 16,000 someday may not be far-fetched, and my target for S&P500 of 1,340 is just around the corner. My left-for-dead AMZN March call is coming back to life (AMZN is jumping over $6 today). All thanks to Ben Bernank, who only has our welfare in mind.

My latest purchase today is KO. Has a very peculiar chart formation, but I'm just looking at the buy signal in Slow Stochastic set at 60. MACD histogram shows positive divergence. Oh uh, tomorrow is their earnings report. Will it matter? Maybe. Maybe not. Here's the chart of KO, 9-month daily.



I also set up a call backspread on MTL, using April calls. It may be ready for a bounce here, after steadily losing all the gain from Feb 1, but it is at the support around $32.50. If I'm wrong, then I will lose out-of-pocket cost, which is about 30 cents (x100).

Do your own DD, but for me, I've sort of given up. If S&P500 can remain above 1,320, it could go up to 1,380 or so, then 1,440 (May 2008 top).

And of course I may be the perfect contrarian. If I am, I still have VXX....

VIX Jumps on Egypt as Stock Market Dips

In the stock market carnage, particularly on Nasdaq, NFLX continued to go up. Oh well.

Other than the missed $400 additional gain if I held on to the option, my portfolio recovered some of the lost ground on precious metals (now that this punk trader finished liquidating his stupendous COMEX futures positions). He caused thousands of dollars of paper loss for me in such a short time, and I will make sure I'll have a word with him if I see him.

In the final minute of trading, I grabbed VXX, a very small position. It is an ETN on short-term VIX futures. Since this is an ETN, I didn't think it had options on it. Had I known, I would have just gotten the options. There is a scarier ETN called TVIX, that's leveraged.

VXX jumped 8% today with a huge volume.

The reason why is finally getting obvious to many people: Egypt.

Many inverse ETFs have been showing positive divergence lately. Here's what VXX looks like: a blip today after a long, long price decline as VIX was dying, but with positive divergence developing on MACD (the best indicator for me these days).


It's outside the chart above, but in May last year it went from $70 to $140.

Slow stochastics hasn't given a buy signal, but so? As Zero Hedge says, we're in one of the first "quantitative" revolutions. High VIX times, probably. If everything is dandy and nice again on Monday, so? It can simply collapse on Tuesday again. Who knows.

Be safe and do your DD.