A Dangerous Time
Dow Remains Under 8,000
Dear Bottarelli Research Member,
The major market averages find themselves in a sticky predicament. On one hand, the technical indicators show that the major market averages should re-test the November lows. Case in point, the Dow is having a lot of trouble maintaining levels above 8,000. As a result, it really looks like a re-test of the 7,500 level is in the cards.
On the other hand, you have the bulls pinning all their hopes on policymakers in Washington to fix our global economic problems. It’s interesting to note that many of these “leaders” have never even run their own business, so it’s rather difficult for me to fathom how their bailout plans will succeed. Nevertheless, they’re throwing unimaginable amounts of your money at the problem — and it’s still unclear if their action plan will even work. To me, it’s a very scary time. In fact, anyone buying stocks right now has been called the “buy and hope” crowd, and in my view, hoping that Washington will come to the rescue is certainly not a powerful investment thesis. As a result, I want to remain biased to the downside. I also want to remain long safe-haven plays like gold.
Thus far in today’s action, we haven’t really seen too much of a directional move one way or the other. But in my view, an uncommitted market that remains under 8,000 continues to paint a bearish picture. Therefore, let’s maintain our V February 50 Puts (V NJ), AZO February 125 Puts (AZO NE), AEM March 60 Calls (AEM CL), and TBT March 48 Calls (TBT CV).Should the time come to act on any of these plays, you’ll be the first to know. Until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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