Monday, October 13, 2008

This will be the rally that no-one will believe

OK class, what week is this?

Option expiration! Time for get shorty!

The attack on Goldman Sachs on State Street has gotten to close to home, so now we have guarantee's galore, and unlimited funding.

On Tuesday we will have further details on the bank rescue plan.

So this rally, will be complete disbelieved by the masses, as those who sold will think it is just "manipulation."

Well didn't "manipulative" forces bring stocks down. We believed that. But people are so jaundiced that they can't believe "manipulative" forces can bring stocks up.

We had people selll their stocks for the money they would need for the next 5 years. We heard targets of 8,400, 6,700, and then 4,700 thrown at this market in the midst of the abyss.

You can say what you will about these government moves, but when liquidity is provided by those with a printing press, you have to recognize and acknowledge the difference that will make.

The best play for this rally, is what I picked up Friday into the abyss-The Ultra Financial ETF (UYG 9.48.) It will give you double the return of the Dow Jones US Financial index. And the money is being made available for them.

So make it available for you! This was 14 last week, 20 last month, and 60 last year. Pick your timeframe, and you have your price!

The best mutual fund is my pick for the NASDAQ- the 2.5X Direxion fund, (DXQLX 4.93) my Yom Kippur pick. This will give you a leveraged move on the NASDAQ 100; leverage on the only stocks that aren't leveraged!

For those that like income, and trade closed end funds, I picked up AOD at 4.70 Friday morning in the teeth of the sell-off. It's selling at a 27% discount to it's NAV, and pays .18 cents monthly.
http://www.etfconnect.com/select/fundpages/global.asp?MFID=173789

But with all the panic, you can also take a look at the Eaton Vance Short Duration Income Fund (EVG 10.09) which has a NAV of $15.47. With all the money sloshing around, the panic in these numbers from Mom and Pop who puked up all their income stocks to buy Treasuries, these numbers will give you an opportunity to make a few years worth of income in just a few days by the increased stock prices of these beaten down numbers.

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