Stock Market, is it a Bull Trap?!

Since the bottom we saw in mid January at 4060 in the DAX, stocks are trading significantly higher. The recession just started Macro Indicators are still pointing to the south.
At first sight it looks like the DAX has build a good base forming a triple top. But I would keep cautition going long stocks as the big picture looks still bearish.

Hold an eye on EURJPY this week, as it is a good indicator on what stocks are doing. There is a huge bearish trend line at 120. A break would lead to 130 in the short term (highs end of DEC). These levels would lead to higher stock and 5000 points in the DAX.

My trading recommendation is to sell the rally trough 5000-5200 with stops above 5500 where we do see the 200 Moving average & a cyclical bearish trend line passing.

**click on the picture to see the charts**

Closing Short DAX Position

We closed the open short Dax position 19Jan @ 4451. Unfortunately our stop profit order was triggered and we locked-in 98 points on that trade. We profit we made is 392. For the moment we do not expect other signals on the VBT Model.

**Fixed Income Strategizer**- USD 10 Year Yield

• 1998 low was 106 basis points lower than 1993



• 2003 low was 102 basis points lower than 1998



• 2008 low was 103 basis points lower than 2003

5 year cycle low? Too early to say yet, but that is definitely a possibility.

Performance Report VBT Model

Total # of trades 45 ( 30 long/ 15 short)
Percent Profitable 71,1%
Average Winning Trade 2346.1
Average loosing Trade 1797.4
Largest loosing Trade 8514
Maximum Drawdown 9070.9
Return on Max. Drawdown 570,1%

Performance VBT Model since 1992

VBT DAX open short position

This short position was opend the 8Dec08. We sell 4 CFDs @ 4549. The dynamic stop loss is for the moment above 5500.