Thursday, August 27, 2009
Here we are again, Mr. Nasty and Cpt Namo scaring the horses with their silly behaviors. Watch CPT Namo give us a head fake, Mr. Nasty throw us a head fake, and the top will extend itself yet farther. While old projections show a top for this move, in past reviews at about 10,500 on the DJIA, current new projections show a potential about 1K higher, but they are merely projections, not assurances. I think the white space I showed on the chart of the WLSH on the previous post accurately pictures the time frame where this could take place.
As an added note, we upgraded the format of PEAK PERFORMANCE PICKS to make it more readable and added the section "WHAT YOU NEED TO KNOW ABOUT GOLD NOW".
Also for reader interest we posted a link to the 8/14 Portfolio on the website.
PEAK PERFORMANCE PICKS major winner for last week was ENTREE GOLD, with major holdings in Mongolia, that surged from the 1.30-1.40 range to a high of 2.48 this week, basically a 100% gain in 5 days, due to the repeal of the "windfall profits tax" on mining entities in Mongolia. While this is a difficult stock to get in due thin number of shares out, it was possible to get an entry below 1.40. Good luck to those who got aboard.
I expect the market to continue to broadening its top, until we have everyone partying so hard they forget they are dancing on the edge of a cliff, and we can watch the bulls jump off a cliff of euphoria. Have fun, Party hard, and mind your limits and keep your stops tight and disciplined.
Yes this is an extended top, IMO. As you can see, the advance has moved up smartly from Mar 9, 2009. Pretty historic when you look at the data, nice buys to be had, nice runs. Some have already shot all their ammo and are declining under the smoke screen of the rest rising.
Extended tops are important, as they allow all the stocks that could move up to synchronize at the top, so when a serious "wet your pants" downmove materializes as a correction or breaks the back of a bull move, the devastation is total, no sector is left untouched and all the Talking Heads freak out and tell everyone to sell everything. During that momentary panic, everything is sacrificed, there is no safe haven. You see the white space I left on the chart for your eye to fill in the moves. I will put Mr Nasty up for you to see, in another post, so you can see the dynamic. Its one of those "Just when you feel safe" moments that we will experience when the market turns down.
Classical economic theory says the markets anticipate conditions by 6 - 9 months. Thereby all the bad news that you hear now is already baked in, and the moves you see here, are short term waves, rather than long term effects, IMO. Then, we will be speculating on what bad things could come our way.
For subscribers and everyone else for that matter, I say, participate in the up side for as long as you can, BUT MIND YOUR STOPS AND LIMITS. That way you can profit with a clear head, and no excess of concern ! Gold and gold stocks will be an exceptions over a different time frame, but if the liquidity becomes an issue, the gold miners like all stocks, will take the hit.
A simple cautionary note: Protect yourself, routinely by assuring yourself the items required by the affairs of daily living. That includes paper money, some specie metals, and the necessities of food, clothing, shelter and transportation