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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (154077)	8/11/2011 12:27:56 AM
From: Jacob Snyder	3 Recommendations Read Replies (3) \| Respond to of 206085

S&P500 downside target: 1020 A retrace of half the 704-point rise, from the 2009 low (667) to the 2011 high (1371), would take it down to 1020. That was also a support line, which was tested and held repeatedly, from September 2009 through August 2010. During that period, investors were worried (just as they are now) about the durability of the economic recovery, the possibility of a double-dip recession, high energy prices, and stubbornly high unemployment. Since then, we've had a year of good corporate profits, and corporate balance sheets are better. But consumer's balance sheets aren't better, and government balance sheets are worse. Overall, I'm guessing it's a wash. Therefore, I'm guessing we return to that support line at around 1020. Before that happens, or right after, we will probably have one or two rallies, which take stock prices up a lot, possibly all the way back to the 200dma (= 40wma). In any trend (and the trend is now down), there will be false furious brief counter-trends. When that happens, it will be a selling opportunity: a time to exit long positions, short, or hedge. Above all, take that opportunity to delete all leverage. The last month has seen such damage to confidence, the S&P500 won't get above its 200dma, not for the rest of 2011. At best, we muddle through, going sideways in a wide range. It will be a trader's market, with wild swings. High-priced options are begging to be sold. disclosure: After being 100% cash (and a few shorts) since April, I finished covering my shorts, and started going long, two days ago. I will be buying the dips (in widely spaced increments), and selling the rallies (ditto). I won't even consider any Buy-And-LT-Hold unhedged positions, unless the S&P500 gets below that 1020 line.