NEW HIGHS COMING IN MAJOR AVERAGES BEFORE END OF 2011 – POSITION YOURSELF ACCORDINGLY
On Friday the SPY closed right in the buy zone that I had mentioned in the weekend chart review. I'm not a fan of buying into a multi-week downdraft that has the attention of everybody from Wall Street to mainstream media going into a weekend. The reason being that the chances for Monday morning volatility following a weekend of investors digesting uncertainty are a strong possibility.
I'm looking to buy either SSO or QLD. These are the 2x leveraged ETF on the S&P and Nasdaq 100 respectively. I may also add some calls into the mix.
I'm going to be posting 10 charts along with commentary later today. I do feel that the opportunity to buy here is a very good one. I see this as a pullback within a consolidation for most of the averages. We're simply testing the lower range of the multi-month sideways range we have been involved in. It has caused everyone to go into a tizzy, which is the exact goal of such a move.
On February 16th, when the market was at its peak, I handed out 5 ideas of which stocks to buy when the market corrects. In that article I wrote, "When the correction does come it will probably scare most of you out of all the confidence and anticipation you now have regarding buying the next dip. The market will make it look as scary and ominous as possible in order to get the maximum number of participants on the wrong side of the ship before it releases its fart gun, knocking everyone on their respective arses."
How do you feel right now? I am willing to bet you are fearful. You were dying to buy and filled with regret in February. Now you are filled with fear and want to remain in cash.
With the exception of FNSR - since it has some company related issues - I would buy any of the stocks on that list. I am already long GSIG. I am looking to buy more GSIG at the right time, as well. Wouldn't mind shifting the portfolio around to make it one of our largest positions, in fact.
I would also include PSTR and BEXP on that list of five stocks. I wrote about them here.
Plenty of opportunity here if you take your emotions out of it. The major averages will all see new highs before the end of the year. Position yourself accordingly.
