Thursday, January 27, 2011


At present we see many economic indicators that seem to contradict each other .
Our elequont President thinks the economy is stronger and going to explode
The jobless claims and Unemployment remains high
Social security is now running a deficit

The DJIA is near the 12,000 mark
In a robust economic climate this would be a pretty hefty valuation .
Gold is on a downslide .
What is going on ?

There is a time to hold em and a time to fold em
It's folding time .

Options expire at the EOB today .
I would think 10.45 am EST FRIDAY is a good time to BAIL OUT .
So that will be my " reference point " for reflecting back in 45-60 days

Adventerous types might consider GOING SHORT
ETF'S abound, and many are structured to reap profits in down markets

Tax laws are that stocks bought and sold in less than a 1 year time period pay a higher tax rate , we are into a new year and the positions taken in late December 2009 are now taxed at a much lower rate than if they had been sold in December 2010

Gold in the last 150 years has usually traded at a multiple of 16-1 ( close to the natural ratio of how the two metals occur in nature ) to the price of silver at today's price of 1330 an ounce for gold , silver COULD be valued at 83.00 an ounce

Silver looks like a winner to me . Can it sink to $25.00?
It may, I would think watch gold and as it nears the 1300.00 mark look at the silver price
I would simply pick a date , say FEB.1st at NOON and pick that as a starting point

Thanks to the DemaSocialists of the 111th Congress , new reporting on the sale of gold coins was enacted .
All those people who were promised if they bought American Gold Eagles could sell them anytime with out the government knowing about the sale, are now wondering why they paid a PREMIUM for these coins .

Ask yourself is the Stock market likely to gain 10 % before it loses 10% ?
I think it goes down in the very near future.
The stock market losing 10% in valuation seems more likely to me that it gaining 10%
So I will go with " loses 10% before it gains 10% " pick
Tech stocks seem to be very top heavy right now , the high flyers are due for a pullback

How low could gold in the near term ? 1270-1280 doesn't seem impossible but likely 1300 is a good stopping point .
Today the indexes are
DJIA /DIA 11,970 / 119.69
NASDAQ / QQQQ 2757 / 57.22
S&P / SPY 1298.78 /129.96

Will they be higher or lower in 45 days ?
IPAD killers come out in Feb.

Gold ETF " IAU " is at 12.86
Silver ETF " SLV " is at 26.24

Many people cry about getting wiped out leading up to and after the 2008 elections , well that's silly, best practice is to exit the market a few months before a Presidential election
Another good one is " Sell in May and go away "
I think May is coming a little early this year .........
Today we are near the levels the stock market was at in June 2008
Would you have done anything different in June 08 if you knew then what you know now ?

Look at the price of stocks , look around does the economy and the jobless claims look good enough for stocks to be trading this high ?

I am not trying to recommend any strategy or stocks , just making my observations and recording them for posterity
Anyone else have an opinion ?

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