Monday, January 12, 2009

Market Drop Scaring Investors

Top Line: Probably the most important items right now are the headlines pointing to how bad the earnings are going to be. Do you think the market really is thinking about the earnings that represent something that happened last quarter?

The stock market dropped again today putting our inauguration day call for a short term top in jeopardy. We are not backing down from the price level over 10K before we see another drop into March or April.

The "tells" include those news items we mentioned in the top line creating doom and gloom in the market. Stocks are cheap again so with some available cash we will be most likely be buying in preparation for the rally that has to be right around the corner. Yes, we have been pretty much ready for it by now but since prices are so low the cash should be put back to work. GDX, for example, dropped below 29 on Monday. That's down from over 34 just about a week ago.

If you did some homework this past weekend, you may be ready for something that won't happen for two weeks but you will be ready. The main issue is that you start looking for good exit points. We'll spend some time on reviewing homework the next week or so.

Remember that next Monday is a stock market holiday and Tuesday is the inauguration. Back tomorrow...

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