Covering The Shorts!

If this is a hurricane, then I believe we are smack dab in middle of it!

Based on our 1973-74 Trading Radar, I believe we are near an intermediate term bottom! I know it sounds crazy, but I think its just as senile as buying back in March. Bear Sterns had just failed and Gold was at an all-time high. Rates were being cut like crazy and the Fed was lending to anyone who can possibly need it. Shortly thereafter the Dow rallied 1,400 points!

Now, I am not saying to buy stocks! But I do believe that the short-term short-trading opportunity has passed us with the Dow falling over 975 points over 2 days. Stocks ill probably trade within a confined 12,000-10,500 point range for the next few months.

I may be wrong as capitulation may be in order. Therefore I suggest that you at least consider covering. If we do cover and stocks fall incredibly – 1930s style – then we lost a good opportunity. If they rise slightly then we are due to see the 10,500 level often anyway.

Divide your position into 3. Sell 1/3 on the Morrow! Sell another 1/3 when you see supported buying on larger volume. And Hold your final 1/3 until capitulation.

Start building up capital. The major selling opportunity has seemingly passed.

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