Sample Forecast
Forecast - March 17, 2009
General Commentary
We are currently in the midst of a classic bear market rally across the major stock index(s). Not surprising since we were at such an oversold level according to most or all technical indicators. How far can this rally take us? Without pinpointing exact numbers, we are suggesting 800 on the S&P is a probable stopping point.
This time around the main drivers behind the surge seems to be centered around “mark to market” accounting and various other incidentals such as small business tax cuts and a few comments from President Obama and Dr. Bernanke. The reality remains that they can do all the jawboning they want, Until proven otherwise, this market still seems destined lower during 2009.
Major Index Current Positions
Holding Risk Level Date Purchased Avg Price Notes
SPY Moderate March 5 $ 70.59 Still holding but getting ready to unload any minute
SSO High Risk March 5 $ 15.21 Still holding but getting ready to unload any minute
Sector Discussion
The sector that looks most appealing right now are natural gas. This is one of those times where logic must prevail ones mind and think in terms of worst case scenario. Natural gas is trading at $3.75 - 4.00. The economy is not yet showing signs of recovery, oil is slowly moving upward and Washington is heating up again. The administration is not shy about their intentions for alternative fuels, and natural gas is one of our most plentiful resources within the boundaries of our great land. To us, logic tells us Natural gas is a reasonable intermediate to longer term sector that should be higher in price as demand increases once again. Therefore, we would recommend beginning to accumulate Natural Gas in some fashion. UNG is the most obvious way as it tracks the price of the commodity itself. Normally we could look at various natural gas producers or pipeline companies, but purchasing common stock for the long term right now may be fools game.
We are still on hold right now with gold and silver as they seem to be in “no mans land” with no clear direction. Once we have one, you will too.
The only currency position we have right now is the Euro/USD. The selection was strictly based on technicals where it looked and felt like a rally to at least $1.32 would happen. The Euro is trying to get there, but may be running out of steam. Since the preferred method for [non Forex] players is buy FXE, by happen stance, we’re picking up about 3% yield while we hold.
Holding Risk Level Date Purchased Avg Price Notes
FXE Moderate March 2 $ 125.93 Still holding but getting ready to unload any minute
Worth Reading
In this section, we provide any links to articles or information we think is relevant or entertaining, or both. Enjoy.