Top Line: We have seen enough evidence to think a low in the market is fast approaching. While there could be some more downside, we would like to be concentrating on using these opportunities to position ourselves on the long side. The next two weeks will give us ample time to find some good bargains.
The main concern this evening is getting some homework time to find some bargains. We have already mentioned the GDX which gave us a good opportunity this past week. Now, we need to figure out what areas we want to be in for the next move, which should be up. Looking at our FSI components, AAPL has come down under a 100 for the first time since early in 2007. AAPL is now priced at half of its high and down from 170 in late August...
You probably can't believe that we exited our positions late on Friday, but we did. We want to make sure that we have our concentration on what to buy into the selling this week and possibly next. We should be close to a low point in terms of time and hopefully price as well.
We have been talking about the VXO as being our guidepost. We said we wanted to watch the VXO in case it jumped into the 50's and it has done so now on two separate days. This is consistent with our selling the short positions that we have been in, SDS and QID. We are not saying that stocks can't go lower because they probably will. This will be our opportunity to buy into some good prices.
More direction after we see how Monday's trading goes.
Our Position has changed (from October 1st):
Neutral on US stocks, Dow target of 9000 not reached and probably won't be reached
Not so Bearish on Gold, our target of $600 was a little aggressive and we'll update soon
Bullish on GDX, target 50 (or higher)
Bullish on BGEIX, target about 25
Still Bearish on US Residential Real Estate, no real target
Bullish on US Dollar, target 90 (back to rallying, now near 80 again)
Bearish on Oil, target of $100. (Target Acquired)
Bullish on US Treasury bonds, ETF TLT target of 100 (Target Acquired)
Bullish on Volatility, VXO to 50 (Target Acquired)
FSI: 59.42 (Not a new annual low)
VXO: 51.76 (Third close over 50)
SDS: 77.11 +1.98
QID: 63.05 +2.46
Dow Industrials: 10,325.38 -157.47
More pics of Jackson are coming this week...but not tonight.