Friday, January 29, 2010

Markets Trading Strategy Update: What To Do Now

Nothing!  For the moment, the case I laid out is playing out very close to the scenario I've forseen with a couple of exceptions.

Gold is trading this morning at BELOW $1080.  My hunch is that it will visit the vicinity of $1000, so I continue to recommend that investors stay as light as possible in this sector.  I believe we are a few weeks away before a decent buying zone, so, for the moment, stay put.  In fact, once gold miners DO fully reflect a lower Gold price, there will come a time to back up the truck, load up on selected junior mining shares and watch the fireworks unfold.

The re-nomination of Ben Bernanke, in my opinion is all the evidence we need that 2010 will turn out to be one helluva great year for Gold investors.  Stay patient.

Another certainty with "Helicopter Ben's " re-appointment, is that interest rates will remain low, stupidly low.
Yesterday, Congress approved an increase in the National Debt ceiling to more than $14 TRILLION!  This means that a 1% increase in interest rates across the board will increase the budget deficit by $140 Billion per year!  Yup, more low rates and ANOTHER Bubble!

But, this can't go into effect until Mr. Obama recovers from his injury sustained during his "State Of the Union Address" in which he patted himself on the back so many times that the rumor is he dislocated his shoulder and is unable to sign new legislation (

As far as the overall market goes, I continue to maintain that it is in territory that is both rarified and subject to great risk.  It reminds me of Wile E. Coyote, after having stepped off the cliff, hovering in mid-air before he realizes that it's a long way down. 

What makes me so suspicious about the stock market is the fact that even decent earnings have been met with a yawn.  This tells me that the "good news" is fully factored in.  Currently, the market is merely digesting the sudden plunge of last week - a process I expect to be very short lived.  I, therefore, re-iterate, the trading postures I recommended last week (

Fortunately, as the result of this week's lull, it isn't too late to get prepared, and even take advantage of the misery set to befall stock market investors.

I'll make today's blog a short one.  Hope you have a great weekend!

Disagree?  TAKE ME ON!

Marko's Take


  1. Not sure my other post went through. Why do you see gold going to $1000 .Yes gold/silver have been very weak of late, but seems like some large buyers keep coming in to buy when it gets around $1075 area.The problem is the dollar, keeps going up. but that can't last much longer, the dollar is dead,and everyone knows it.

  2. Hi Robert....

    My "forecast" of $1000 is purely a gut feel. However, it would be the level of an A B C type retracement where the length of A and C are equal. We are now in C. I realize there are buyers here and another problable scenario is either a bull flag or bullish pennant.

    We just have to let this play out. I agree with you on the dollar, whose chart is very strong. So, I'm on the sidelines for at least a few weeks. I think we'll see one helluva buying opportunity soon.



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