Morgan Stanley, but what else?

Ok. So it seems that shorting MS was a good decision. Now the price is 37,01, so I made almost 5% on this company so far. However my target is at least 20%, so it seems there is some way to go...

Today's news are pretty gloomy... Economic revival will not come too quickly. As you remember I was thinking about shorting car makers last week. Today some more news appeared that convinced me to such a move.

The question is what would be the car maker that could suffer most? I think that would be German Volkswagen. They had really very good years, but they will also suffer from high oil prices and economics slowdown. Below you can see the graph of the recent price movements of Volkswagen (daily interval from the beginning of march).

I decided to short 100 shares of Volkswagen. :) I hope they will not let me down! ;)

Second day of trading

Cool. It seems the banking industry is weaker than I thought. That should be good for my short position in 513 Morgan Stanley stocks (at this stage I am losing -1,36% on this position, but that is basically the spread I had to pay).

Today, the breaking news was that China is going to increase the price of oil domestically. Unfortunately, this led only to a very minor fall in the global price of the oil. It seems that the demand pressure is so strong that that we are far away from the demand/supply equilibrium in the financial markets. I am not a specialist in the Oil industry, so I am far from placing bets on this, but number of entities predict the rise of the oil price to the level of 200 USD per barrel. That's a lot! However in real terms it would not be such an unimaginable level. The inflation, which is about to take off soon, will decrease the relative pain.

The only tradable information today, was about very poor performance of Chrystler and Auto industry in general. I think about this on the weekend. Maybe I short some auto companies on Monday.

DJIA Longterm trend still sustained

Although short term dynamics of the stock market is very unfavorable and we should expect further fall in the equity indices, long term prospects don't look so bad. Simple technical analysis shows that DJIA was able to move back into the long term growth channel (indicated by parallel lines on the chart) after large falls touched the market in last weeks.
One of the rules of technical analysis says that when indices move back quickly to support lines this support lines are extremely strong and should be considered to be support in the future. This suggest that in long term we should expect rise in equity indices