Given the news that has just hit the tape that Mr. Buffett has now become a significant shareholder in GE, I thought it fitting to have another look at the chart. The chart of GE (above) contains my comments I made back in June of this year.
I realise Mr. Buffett and his track record have been deified by the financial media. With that being said I look to the chart for answers and the GE chart does not look good. I see nothing that has changed in the pattern since I last posted on it. We see a fairly orderly continued succession of lower highs and lower lows. I would surmise the lows of mid Sept to be taken out in due time.
I will say without equivocation that the $18-18.50 area had better hold for Mr. Buffett or the fireworks could really get started. I also realise many out there, always looking for someone to think for them, will be jumping headfirst into GE following Mr. Buffett's lead. As for me, I am neither long nor short of GE but am inclined to hold out for $8 level. Crazy huh !
I also heard over the last few days that Mr. Buffett would not have made his investment in Goldman Sachs if he thought the government wouldn't pass the bail out bill. I am shocked that he is operating in this fashion. I would assume the same logic would probably apply to this foray into GE. This seems to me to be a very strange predication for plunking down some major bucks into the equity markets. But hey, who am I to criticize, the oracle of Omaha.
Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".
Long 1 unit of Spdr Gold ticker GLD @ $86.85 stop at $83.59
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units Salesforce.com ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89