Our Position (from our August 7th post):
Bearish on US stocks, Dow target of 9000.
Bearish on Gold, target of $600.
Bearish on Oil, target of $100.
Still Bearish on US Residential Real Estate, no real target.
Bullish on US Treasury bonds, ETF TLT target of 100.
Bullish on US Dollar, target 90.
Bullish on Volatility, VXO to 50.
Not much has changed in our viewpoint but the precious metals call may be a little too aggressive on the downside. The GDX (gold mining index ETF) may have put in a short term low on Friday morning down around 77 after trading at around 97 a month ago. We still think the GDX can make a lower low but for now it's a bit oversold.
US Treasury bonds have moved up nicely over the past week with the TLT's up from just under 90 to over 93. We think the 100 level is a bit aggressive, too but will stick with it for now until we get closer to that level.
The reason that you are here is more for the stock market but these other markets will be places to trade as we go into 2009 and one that we have mentioned in the past is the Japanese stock market. Recently, it's being hit pretty hard and prices have come down into an interesting place. Remember that we like to buy...yes, Low, and sell High. In order to do that we need to see what Low is and buy it and see what high is and Sell it.
The US stock market is now in a strong down faze or should be with the trading of the last two days. We are reporting here around one o'clock CDT with about 2 hours to go in the trading day and the trading since Monday morning has been significantly lower. We use the word significantly to indicate that some important price levels have been breached so more selling should ensue.
Hope you're having a good week in spite of AIG dropping below 20 again today. As we mentioned in an earlier post, AIG May have put in its low for this move but a test would be in order and that may have happened today. Of course there is always more downside before it finds its real low.
FSI: Friday 87.50 Monday 85.83 (turn down?)
VXO: Friday 21.50 Monday 22.38 Now 23.52 (heading up to 50)
SDS: Friday 63.80 Monday 65.63 Now 67.00
QID: Friday 38.63 Monday 39.58 Now 40.55
Dow Industrials: Friday 11,659.90 Monday 11,479.39 Now 11,365.65 (9,000, a long ways off?)
The main reason we are posting today is to show a couple pics of Jackson (at the petting zoo).
Is that Bugs Bunny or the Easter Bunny?
Ready, Aim...Grab a Duck