Monday, February 23, 2009

Price Low Here???

Top Line: Another new low in the Dow today...yes, continue to buy.

We may be in the best buying opportunity of the next couple of years right now. For those of you who haven't deployed all of your funds, these prices are compelling but what would you buy?

There may be some upside surprises in the financials but we think there are other places to find some possibilities. We continue to think the energy area is a good place. There are many ways to play this area but try to get good prices.

Gold has given us pretty good leadership for the energy commodities as well as their producers so we look forward to higher prices later in the year from this sector. The volatility indexes are in the 50's again giving us greater confidence that this dip should be purchased. Monday was tough on our portfolio because most of what we owned was down but we did have a couple on the upside to balance it...not by much.

What may happen? We took a look back at our January 21st post where we asked the question how low the market can go. In that post, we made a simple Elliott wave "guess" how far the market could go down if it wanted to and came up with about 7000 in the Dow. At least that was the target for that day and it looks like we have come near that today. We didn't like the idea last month but here we are and more buying opportunities exist.

The major headlines are very negative and sentiment has quickly turned negative, too. These are sweet music to contrarians who want to go the other way. As the market closed today, the evening session came back a little but that does not provide certainty for a turn around. There could easily be some selling in the morning, possibly strong selling due to these very negative headlines. The fact remains that we are near an Elliott wave end with a fifth wave nearly complete. This is not the time to be getting cold feet and selling your positions. This is bargain basement time for some oversold stocks.

We do Not recommend buying gold mining stocks like GDX at this time. Even thought these stocks could go up quite a bit between now and the top of this move, there are better opportunities. How are those stocks that you keep an eye on? Are they looking like great bargains? Or, do you need to find other places? Maybe you are like us and are mostly in. These are the sad things about not having some cash around...can't buy these great prices, at least not much.

Yes, DT, we know why you're here, Jackson pics. We just want to point out that here are three pretty important guys and notice that there is no Snow. More pics the rest of the week...

Here is one of the whale shots...there will be more...yes, Jackson, too.


Diane said...

OK ,Mr GS, I'm going to buy more during these bargain basement times but seeing the little guy with the big guys in paradise will help me do it with a smile.....more pics please!! DT

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