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Tuesday, March 24, 2009

The Bull is here

From WebSurfinMurf's Financial Blog

Me and "Happy John" where a little early for the Obama rally we expected in January. January started with DOW 9K, recently ending at a low of about 6469. Today the DOW was up 6.84% at 7,775.86.

The target for this rally is come close or pass through the 200 day moving average. The 200 day is DOW 9,500 currently. Probably by the time this rally gets near that level, 200 DMA will be DOW 9000. If this rally somehow fails, hell should open and Satan's minions released upon the earth. :)

Gold I expect to fall in the near term. Gold miners should lose value, but I am *hoping* not too bad, since the stock market is rallying, it will somewhat help keep miners stock up. This is why I dumped GDX, and reduced my baby miner positions, as previously blogged. UPDATE: To clairify I have 1/4 of all my cash in baby gold miners CLICK (maybe more). I am still a huge gold miner proponent, I am just not adding here.

I am in 80% long in various commodity stock plays & lottery tickets, with 20% cash, mainly since the tax man will want his pound of flesh shortly. Everything rallied, OIH was a huge winner, Lottery tickets, etc. Frankly everything did great.

I expect a nasty pullback sometime in the next day or two, to "con" the shorters back in before rallying again.

Let me be clear, this ENDS very badly. We are entering the territory of currency wars, which can lead to real wars. The market will not hold its value when deflation regains its hold and takes it down. I am playing this long, (as I have been since January) for the full run. I'm in commodity stocks to hopefully protect myself if the USD has a currency dislocation.

For now, its party time. My friend Happy John had stronger faith than me, mine wavered in the final week of the beat down of the market. At the "top" wherever I think that is (200 DMA), I'll probably buy some puts, add to gold/gold miners, and wait for the final collapse of the world markets.

Commodity Rally
Happy John sent me this tid-bit on the commodities index, CRB. The CRB just recently hit 200 recently. CRB first broke through 200 back in 1974! And that was in the midst of massive inflation. Think about this. Natural resources, something that every human being and government on the planet needs just collapsed in an unprecedented way. Commodity valuation is like the "alternate" currency, meaning as every nation devalues their currency, commodities are a "scare resource" and therefore should hold or make significant gains compared to "photo copying cash".
This is the buying opportunity of a lifetime, one to retire on.
RJA (food), USL (Oil), OIH (Oil companies), GDX (gold miners index...just not now), GLD (gold...not now), SLV (silver), UNG (Natural Gas), etc.

Please see 50 year graph of CRB, with 50, & 200 moving averages. Notice how low risk commodities are compared to the history of valuations. Equities (stocks) only went back to values of the mid 90's. CRB went back to 1974 levels. To give you an idea how insanely cheap this is, in 2009 "$200" is worth "$74 bucks" in 1974 dollars. So adjusting for inflation, CRB just hit valuations ALL TIME LOWS!

From WebSurfinMurf's Financial Blog

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