now what??

[gadge78]

i know some of you out there are buying... but i was close to joining the herds yesterday and running for the hills. seems like the rate cut has helped here.

as i type the dow is now only off 50 points and the TSX up around 300.

U stocks getting some back from yesterday's slaughter.

any thoughts as to whether this will be sustained? i suppose that's the million dollar question.

i can't handle these swings!

[davidslane]

If you can avoid margin calls, then just hold your positions.


This isn't over.
We may see bigger lows again today, tomorrow, next week, next month.

We're in a short term bear market which will last probably into 2009.
We'll have runs up and down all along.

But, if you don't need the cash, just hold the best stocks going forward.
If you have weak stocks, sell them into this rally and wait for the bottom retest (there always is) to buy better stocks back lower.


If you need cash, sell your weakest positions, but just enough to hold you over.
You don't want to be out when these resource stocks recover.


I'm not saying we won't see Monday's lows again in resource stocks, we might.
But I doubt you'll see much worse in resource stocks than Monday's lows.

It may take into 2009 or 2010 to really make back some money on those stocks, but they will slowly start climbing the wall of worry.


The US markets didn't have the capitulation selling like Asia and Europe, except in financials.  Was that enough?

Probably not.

But, Asia, Europe and our resource stocks did have capitulation selling, and because those markets are stronger than the US right now, they will recover first while the US markets continue to stumble along.


Expect more rate cuts in the US, Japan, UK and even Europe.
The play to be is still gold and silver.

Gold has now turned around $44 from it's low to its high a little bit ago and silver about $0.70 off its low.


The US dollar will continue downward as the US Fed cuts down to 2.5% or lower.

Commodities are still the place to be.
Plus, when all this stimulus really kicks in by the fall, gold will be looking at $1050 to even $1,200.


Hang on.
We're not done yet.
But we're nearing the end of the worst.

[davidslane]

It's nice that the Doug Casey group will send out their own version of an IWB and you don't even have to pay extra!  And 8 pages of input to boot.


Here's a good quote:

That contention is made, however, with the thought – make that the hope – in mind that you have followed our constant counsel to invest in these stocks only with funds you are able to watch get cut in half, or more, and still sleep at night. I cannot communicate how much I hope you have taken that counsel to heart. Because otherwise you are now finding yourself in a very uncomfortable position, perhaps, of having to sell out of necessity, and not based on any cool calculation.

Make no mistake, we continue to believe that gold – and, in time, gold stocks – are going to be major beneficiaries of the current turmoil.

As Bud Conrad commented this morning, “Size is important. Investment in global equities amount to something like $150 trillion. A 5% loss, therefore, is $7 trillion. But all the gold stocks in the world add up to something like $200 billion, so even a modest flight to safety that attracts investors to the gold stocks could be wild.” In the final analysis, how you decide to act at this point will be based on your personal circumstances and your own psychology. But here are some thoughts:

Use any positive market reaction to the Fed’s cuts -- and whatever other moves are next announced by the government in an attempt to stave off the tempest -- to liquidate all but your core equity positions. Being over-weighted in a combination of cash and gold at this point makes a good deal of sense. If you don’t know exactly why you own a stock, sell it.

If you have a lot cash or gold, hold tight. This situation is not going to be resolved quickly, and could take months or even years. Buying opportunities will abound, so be patient, picking more of the best on big down days.

Again, nothing profound, but important. If we have used the phrase “Rig for stormy weather” once, we have said it a dozen or even two dozen times. We hope you have battened down the hatches and are ready for the storm that is upon us. If not, use any positive reaction to the moves made by increasingly desperate governments over the next few weeks to finish making your preparations. And then hold tight.

[john77]

Yes - I noticed that in my inbox as well. It was nice to see and it didn't say anything new that wasn't said before - ie some hand-holding.

Did Dines put out any IWB?

[gadge78]

no. dines has done nothing. not only that... but his frickin inbox is clogged full... and everything is bouncing.

what an old tit.

[davidslane]

Here's a nice bit on Technical Analysis from Jim Sinclair today:
http://www.jsmineset.com/

Much if not all of what we have spoken about economically has become a visible reality. I have emailed you multiple times this week. If you are on the by request email list I described that exactly what has just terrified gold share and gold holders is the foundation of why gold is going to $1050 and onward to $1650. The weak at heart and those who have contributed to over-use of TA on small cap issues threw their positions away only to see drastic recoveries today.

A small warning to some of the near and dear:

If you have been reading JSMineset and are now dedicated to TA but have failed to learn the entire lesson that TA must move in the direction of the fundamentals, remember TA is best used where your transactions are not self fulfilling prophecies. With a half assed strategy of TA without fundamentals, you will, I assure you, be stripped of your funds in the not too distant future. I said early on in 2004 - 2005 that the trade everything (gold and all gold shares) all the time traders were giving dastardly advice because the small markets in gold shares and gold made them players in a game of musical chairs. If you have become a TA master then please trade GE and IBM where you can demonstrate your genius, maybe, without screwing up the works.

[richmanch]

Everyone have fun at the zoo?

I had to work all day. But I checked at lunch, and whew, I was relieved to see the DOW only down 1%.

On a day they cut the rate .75!

Things look better--maybe even manic--in Asia. Good thing I didn't open that short position on the Chinese market today (I was this close).
Maybe tomorrow.

I'm still pretty cautious in the outlook--some of our best players (FRG JNN) still very much on the mat at the end of the day.

I just read that Casey excerpt for the first time. I know that some of that was in the Int Spec, but seems to apply to energy too (did I miss that somewhere in the En Spec?). Anyway, reading closely, they seem to be pretty pessimistic.

[john77]

They are extremely pessimistic in the general markets, and the general stocks. But they fully expect and bet on the fact that gold and energy stocks will separate themselves from the general markets. It seemed to us that gold stocks started that, but in the last few editions of the Room they mention how the junior spec golds haven't separated themselves. And obviously U stocks haven't yet either.

Pessimistic in general, yes. But optimistic on their picks.

[punter]

This from Technically Uranium with Merv

After the Close, 22 Jan 2008

Well that’s more like it. The Merv’s Daily Uranium Index gained 0.149 points or 4.72%. Not the greatest but better than a loss, which it started out as. In the end there were 30 winners and 18 losers with 2 stocks unchanged. I have updated my Index component stocks with the result that UEX has been replaced by First Uranium in the top five based upon market value. These top five all had positive days. Cameco gained 9.3%, Denison gained 4.6%, First Uranium gained 7.3% Paladin was the weakest with only a gain of 1.8% and Uranium One gained 5.6%. The best gainer of the 50 new component stocks was Kodiak Exploration with a gain of 20.0% while the worst performer was Yellowcake Mining with a loss of 19.4%. (see at the bottom for a list of the deletions and additions)

Although we had a plus day nothing has changed in the intermediate term chart or indicators. The Index is still below a negative sloping moving average line. The momentum is still in its negative zone and the volume indicator is still below its trigger line. The intermediate term must still be rated as BEARISH at this time.

The short term is where you will notice the indicators firm up and turn first. You can see it in the short term momentum. It had been inside its oversold zone and now quickly turned around. It looks very much like the action in mid-August so maybe we just might get a repeat of the August to November rally. That is expectations, for now the one day Index gain is not enough to call it a turn around yet. The Index is still below its negative sloping short term moving average line and still below its very short term line. Although the momentum is turning around we still need another day or so to confirm a turn around. With the Index turning around and the momentum firming up I will upgrade the rating, but only to a – NEUTRAL rating until more evidence suggests a turn around.

FYI and entertainment

[Depleted]

We need a few more days to let the smoke clear. We will then be better able to determine if we have reached a near term bottom. PNP,DML,LAM,FRG.MGA all had an interesting day yesterday. My indicators shot up into positive territory,  with high positive volume. Haven't seen that in quite a while. This change with heavy positive volume usually means we are near a reversal, but I won't call it, too much smoke in the air still...Insiders and strong hands buying back in..maybe. I can wait it out and go in once I see that a new uptrend has been confirmed.

[maxine]

I am waiting it out as well.  Am in the hole with my core positions but they will come back in time.  Have a wish list of stocks with prices I would like to pay. Hard to see an end to the downtrend as yet with the insanity of the financial world.  Yesterday it was the mortgage meltdown, today the bond insurers' shortfall, tomorrow what next?  Everyone knows that if you spend more than you make you are asking for trouble.  But then if you have the power you can always  print more paper scrip, sell bonds to other countries or raise taxes to pay for things can't you?   Sooner or later I think the piper will have to be paid but that is another story. For now I am pulling for something miraculous to be pulled out of the hat by Bernanke and friends.  Pie in the sky maybe but I live in hope.

PS I thought an election year was supposed to be positive for the stock market. 

[john77]

According to some other boards, an IWB is finally out. I don't know what it says as I don't subscribe, but my guess is that Dines is calling a rally in the coming weeks.

[dananini]

Everyone sit down.The IWB says to buy you know what.........MGA!!!!!

[gadge78]

the iwb also says we're near a bottom (no kidding... and we've been near a bottom for 2 months now according to him... but go figure)... calling for a feb rally.

interesting that MGA shot up 25% on his IWB. people are desperate for something to grasp onto i guess. either i'll take it.

if only he could push it to $3... and same with pinetree... and uex over $5... give me my margin back so i don't have to sell my crap!

for some reason CIBC hasn't sold anything on me and i've had a margin call for a week now.

guess they have bigger fish to fry....

[john77]

What's the standard on this margin call thing? Do you tend to have 3 days before raising the cash?

I got a margin call after the close on Monday and I deposited a small amount of funds, and sold off DEJ.

If your stocks rise and the buying power goes back into the positive, do you still have to deposit funds or sell to raise cash?