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Monday, February 2, 2009

Manic Monday

I expect Monday to be ugly, violent mess. There is still no clear direction on Obama saving the world, so the markets will "cry" and it will be violent. To add salt on this wound, the markets are near critical levels, and I expect the market to break DOWNWARDS through those levels in the next day or couple of weeks.

The result will be market chartists seeing utter doom, and S&P from 840 down to 200, utter collapse scenarios will become the "greatest probability".

And here is where it gets dicey, above IS what will happen, there is no choice. Well, there is one thing to stop the financial markets from a collapse, the USA lead the world into this sh*tstorm, it needs to lead it out.

Like it or not, the rest of the world is not positioned to take this BEAR by its nose and lead it into Bull territory.

So the question was, and is, WHEN will this administration announce & pass a concrete plan of action that gets the world excited that we are not all going to heck in a hand basket? Will it be done before and thereby preventing "doom" scenarios appear on stock chartists screens, or after?

That is the question. If they announce Tuesday, the S&P won't have enough time to enter doomsday territory.

However, I suspect that the world has to come to the brink of disaster...YET AGAIN, to get Washington to "justify" flushing the USA's last tatters of fiscal responsibility down the toilet cloaked in the justification that they had to or the world was going to collapse.

Where I find my daemons on investing with the current environment is, can the GDX mining indec stay above 27? Will fear make it rocket to 45?

EVERYTHING other than GDX I have is hurting me to various degrees except GDX & RJA (food). My next bet is these two are the commodity leaders, and it has been my bet for months.

I strongly suggest buying Gary of Smart Money his news service. He and my views are once again aligned and all is well. ;)

Conversely, Karl of the Market ticker sees Gold as about to reverse. Even if gold pulls back, there is no reason why GDX can't remain strong and rally into earnings later this month.

For all those who are wondering why I'm so obsessed with resource stocks, as compared for the last 2+ years on shorting financials, look at Iceland. The US isn't Iceland, but it does show what CAN happen.

Icelands Currency "Krona" free-falled downwards, along with Iceland's stock market, resulting in Iceland's' government collapsing. So in "US Dollar terms" the collapse was across the board in Iceland.
That is one possible outcome in the US. Do I think it's likely? No, if I did I'd be trying to leave the country to live abroad. But itsn't isn't about likely, its about preparedness.

Remain prepared. I still like GDX & RJA for long term. Oil is a heavy buy as it gets closer to 25 bucks a barrel, and may be great now! Hard to say where bottom is. Gold miners announce later this month, if GDX dips low again, all things considered, a good hedge.

Time for me to go to bed, and see what tomorrow brings. One-of-these days I'll put my news round ups and blog summaries up. Its been too busy recently for me to do this blog justice.
Always visit the blogs linked on the right for good information on current events.

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