Luna $ Ticks

December 14, 2008

Hemingway’s Toilet

Filed under: Trading SPX SPY — moontrader @ 4:21 pm

Hello everybody,

I’m back from my honeymoon in Cuba, which was, at least, interesting. I’ve been hearing a lot about it, mostly good things – sometimes even marvelous – and because of Fidel’s deteriorating health and the possibility of some sort of change in the US sanctions against this Caribean country, me and my wife decided to go there to check out the myth. On one hand it was great because we could relax in a nice resort in Varadero (after spending a couple of days in Havana), but on the other hand we didn’t like at all what we saw there. Those who say that Cuba is a great country and people are happy, are either lying or blind. It’s true that there’s no violence, illiteracy is zero and they have a good health care system, but this is as good as it gets (oops, almost forgot: cigars, rum, chocolate and coffee are just fantastic). We took a lot of cabs and during the trips my wife would shoot the driver with a rattle of questions, ranging from “Why are the house windows tape-crossed?” to “Do you like Fidel?”

Soon we realized that there were certain things people were afraid to talk about. And that was, obviously, anything relating to the regime and the revolution. However, in longer trips, the drivers would become increasingly confident about us and, consequently, would open up a little. One of these guys took us to the house where Hemingway lived. It was located in the outskirts of Havana and the trip took almost an hour. In the beginning, T. – no names, just to keep it safe for him – was proud to have lived his whole life in post-revolution Cuba, bragging about the universities and the quality of life. He decided to stay with us during the tour of the house, offering to take us aftewards to a good restaurant for only 5 Pesos more.

hemingway-toilet

At the end of Hemingway’s house tour he was already talking about his family and we learned that his daughter was not living in Cuba anymore: he got her into the US where she’s attending high-school now. Next year he plans to take a trip to Colombia, and it’ll be the first time in his life he’ll be leaving Cuba. He was becoming more and more confident with us until we offered him a can of beer. After kindly refusing it – he was driving – he finally confessed: “How can one be happy in a country where a beer costs 1 convertible peso and the salary is only 15 convertible pesos?”

That’s it, no matter how much you work or how much you have studied, at the end of the month you’ll get a salary of about 500 national pesos (equivalent of 15 Convertible pesos, which is a peso used by tourists). Every single thing is controled by the government, from the house you buy (which you can never sell) to the car you own, to the TV you watch (there are only 4 channels, owned by the government), to the books you read (bookstores sell only books about the revolution). Access to the internet is extremely slow, only available in some 5 stars hotels and sometimes, if you want to send an e-mail, you have to fill a paper form with the message and the e-mail address of the recipient and an employee will take care of it. Visually, you have the sensation to be in a museum, with 60 year-old cars driving around. At night the city is dark, with almost no lights on, and the food is terrible (if you’ve been to Cafe Havana in New York, that’s way better than any restaurant in Cuba).

Anyway, I would have tons of things to talk about this country that stopped in time in every sense, but I’d rather reconnect with my wild capitalist side and ride the swings of the S&P instead of an old russian car in the empty streets of Havana.

spy-121208

After my last post, “Who Has the Guts to Short,” the market had a short-lived but sharp slide, traded sideways, and then finally closed for the first time since early September above DMA 25×5. It then went further in this demonstration of strength and closed twice again above it. On Thursday it closed below, opened weak on Friday, bounce back up and closed again above DMA 25×5. All of this happened with MACD showing a buy signal, but in negative territory. However, MACD is now close to turning positive (still with a buy signal) which adds to the “bottom in place” scenario. If, in the next trading sessions, MACD does turn positive (both lines) then we might have a strong rally.

In terms of date projections, the significant event was the sideways trading between the 1st and the 5th, and the relatively weak drop between the 8th and the 12th. This tells me that the spiral of the whole correction is becoming weaker and thus we might have ended this first part of what might turn out to be a huge bear market. I suspect we are on the way to end this year back above 1,000 and live a medium-term bull market.

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7 Comments »

  1. Welcome back Moontrader. Hope all is well! I look forward to your next posts!

    Comment by toad37 — December 14, 2008 @ 4:49 pm | Reply

  2. I would not play with this fake relay. Any higher high is change to Short.

    You should take a rest before you jump into the market.

    Comment by Steven — December 14, 2008 @ 5:00 pm | Reply

  3. Welcome back Moontrader! Do you see market drop after December 25th and before January 1st?

    Comment by Playa — December 14, 2008 @ 5:31 pm | Reply

  4. Welcome back Moontrader. Just in time for the action… btw – i did find a good restaurant when I was in Cuba. I almost broke my leg climbing a veritable mountain or what seemed like a mountain in the dark. But it was worth the effort and the 20 USD for dinner (which I realize is a small fortune to them).

    Comment by Dragonsbane — December 14, 2008 @ 7:12 pm | Reply

  5. Moontrader–welcome back

    any thoughts on the bradley turn date which i have seen listed ad Dec 14 or 15th? how might it play into your read of the markets?

    Comment by almost44 — December 14, 2008 @ 8:01 pm | Reply

  6. Great to have you back Moontrader. Congrats on your marriage and interesting honeymoon!

    Comment by juliec — December 14, 2008 @ 11:31 pm | Reply

  7. congratulations on the nuptials.

    i feel pretty good about another low coming. check this out.

    tradepostings.blogspot.com

    thanks for the great work.

    Comment by erik — December 15, 2008 @ 12:17 pm | Reply


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