Tuesday, February 17, 2009

Stock Market Indexes Breakdown On Heavy Volume Throwing Every Index Into A Downtrend; Our Gold Longs And Our Shorts Allowed Us To CLEAN UP On Tuesday!

It was a very ugly day for the stock market today but I have to admit that me and my subscribers were very happy as not only did 37 of our 39 shorts make money but our two biggest gold positions were up 9% and 3%+ today. So it is safe to say today was a very bullish day for subscribers and all I have to say is that IT USED TO ALWAYS BE LIKE THIS from 1996-2007. Only recently has things been turned upside down and even then our shorts are doing WONDERFUL proving that the trend will FOREVER be your BEST friend.

The one problem I have had with the downtrend is that unlike the 1997 pullback, 1998 pullback, or the 2000-2002 bear market, this is the first time (besides the March to May period in 2008 which was lame!!) where I have seen the market go so long without rewarding momentum/growth investors with at least a few "hot" stocks where they buck the major downtrend (like CRUS in 2000 or GNSS in 2001--both tech related). This downturn has been so harsh and has hit the whole macro-economy that NO stock is avoiding the downturn. There are a few but compared to any other year I have been doing this it is PATHETIC! Luckily, right now, stem-cell, pasta, and gold all have some momentum and these areas could still make us money if the market doesn't breakdown too much more. However, if the market falls apart, you can kiss these speculative leaders (stem cells) and real leaders (gold) goodnight.

It is possible gold, silver, and platinum stocks can do well. However, I think we need to have some better counter-trend rallies to really get any upside momentum that will allow us to make the 100%+ gains that I was used to getting before 2008 hit us. Gold, silver, and platinum might do well if the world doesn't feel safe buying our debt anymore but the actual stocks on the exchange will still be at the whims of the buyers (demand) and sellers (supply) forces of the market. Gold will replace the Dollar in some countries holdings as they diversify but I doubt those same countries will buy AEM, NEM, GG, ABX, or GOLD instead of the actual bullion.

This is why I think it is safe to buy Gold, Silver, and Platinum on pullbacks but NOT the stocks that are involved in those markets. They are still STOCKS and, since weak holders and small money goes into stocks more than futures, they are at the mercy of supply and demand imbalances caused by a fund liquidating or a big investor jumping ship. In the Gold market, if that investor decides to dump, I am pretty sure, RIGHT NOW, you will not have any problems finding a foreign buyer out there for the Gold. But for NEM or ABX? I doubt it.

Bottom line is this: the market is very ugly and the trend is now down on all four major time-frames that I use. This means that you should either be in cash waiting for the market to turn on volume so you can go long and heavily long on margin if we have leaders break out. Or it means that if you are experienced you should be looking to go short the low volume rallies. Just like we did today on two stocks that freshly broke down from low volume rallies. Take that along with another speculative stock on the long side and you have three new positions for tomorrow which is just as many as we saw TOTAL last week.

Last week we had ONLY 3 shorts. Those three shorts are all three lower than where we went short. Sadly one did swing us out of it with a TINY ITTY BITTY loss but NOW it is working. The other two are working really well and now even if they reverse we will be leaving with profits. The most important thing is that LAST WEEK I did not issue A SINGLE NEW LONG. By doing that I saved you from today's major collapse. Not only did I save you from today's major collapse by not getting you long but you made money by being short the recent short positions I have given out (with all my long-term winners posted below). The best part today, however, was seeing our longs net-up today with our two gold stocks (my two biggest long positions) having VERY bullish sessions today. So not only can we get it right on the short side, but as you can see (and how it was for over 10 years), even when it is a nasty day, we can get it right on the long side too.

Have a great Wednesday everyone. I will see you after the bell, on this .net site, tomorrow! Aloha!

top longs/(shorts) with their total returns MAKING ME MONEY TODAY: ANCI 57% (CEDC 80% CETV 90% CEO 30% IPHS 38% RIMM 55% GGB 58% MOS 54% OKE 40% AAPL 41% CPRT 27% MCY 22% LLL 19% SDA 77% PG 21% CASY 28% PRGO 20% PLCE 28% K 19% ARB 71% APD 44% AMSG 20% AMX 48% CYT 66% SPG 57% TITN 52% POT 51%)


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