Wednesday, January 28, 2009

The market script

The whole world was short the financials. And now we won't know the plans of the "bad bank" until a week or so, so the bulls can run rampant. And the shorts will get squeezed. All day.

The next thing is the attempt to weaken gold, and garner confidence in financial assets. This is the head fake.

Use that to get long the commodity stocks, the steels, the infrastructure, and names like CAT tractor. The fertilizer stocks that have been languishing are also buys.

I think the oils will strengthen also. If the banks, which were insolvent, now get the stuff that makes them insolvent off their books, without making them insolvent, of which they will do, then how come these real companies can't get a bid either?

I don't know how long this rally will last. But if the past is any perspective, it will be sharp, vicious and brief.

Good enough for me! The juice plays include the ones I gave in my speculation corner Monday night:

And when we are ready to reverse, we get days like today. Up, and then the sell-off that seems to be concerted, as if the bears are trying to force it down, and then stability when the selling is contained.

That's normally the recipe for a trade. Here's some speculative picks, with cheap prices that guarantees you some action! Hopefully these will be flea market bargains, and not just inventory that's still being wholesaled!

DXO (2.73) The double crude ETF
UYG (3.04) The double financial ETF
DYY (6.06) The double commodity ETF
URE (4.39) The double real estate ETF

Now make some money today. We are in the honeymoon period of the "stimulus" and "bad bank" plans. We haven't even yet seen how these will look with their clothes off.

So we ramp!

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