Easy money on next leg down, second Fool’s Rally progressing as expected

[stockstradr]

About Oct 9th friends at work asked me, “My stocks are down 45% since the top of the market, should I sell those or keep holding them?”

I told them, “There’s a fool’s rally coming. Just wait for the top of that rally to sell. I’ll send you an email on that.”

Then on Oct 10th I bought stocks 2X leveraged long at the bottom (S&P500 = 845), and I wrote my co-workers that I smelled the base of rally forming. I bought some calls also on the S&P500.

Then the markets climbed 20% in two days. I wrote co-workers an email on the 14th, within 30 minutes of the top, telling them “Sell your longs. I think this is the top of the rally.” I sold all my longs that day within five minutes of the top at S&P500 = 1040. I netted fifty grand that week, including netting 45% net on call options I bought at the base of that rally.

However, something bothered me. I felt the markets were NOT satisfied with that lame 3-day 20% fool’s rally. Also most of my co-workers missed selling because the top of that rally came and went so fast.

About Oct. 24th markets were back down and oil was getting hammered. I told you and my co-workers to buy oil stocks. Those oil stocks are now up 20% to 25%. I also warned multiple times on gold, that it could trade flat to down during the recession (deflationary pressures). However, I did buy gold at $710.

Two weeks ago, after markets fell back off that first lame fool’s rally, I stated there HAS to be another more substantial rally before the end of the year, a rally that will benefit as more signs come in showing unfreezing of credit markets.

We are now well into that second, more substantial, Fool’s Rally. You should also recall I predicted this rally will have far more staying power, lasting far longer than the first lame 3-day fool’s rally AND I predicted this Fool’s Rally will take the S&P500 above 1,100, possibly above 1,200. Those levels will them offer you a GREAT opportunity to short the indexes and ride the S&P500 down as it craters at about ~600 sometime next year.

So sit up and take notice; watch for your entry point to go short the indexes. The S&P500 is already at 1,000. Credit markets are unfreezing. Libor rates have contracted.

RECOMMENDATION: wait for 1095 on the S&P500, and then start building short positions on the indexes. If the S&P500 continues up to 1200, then just double-down your short positions.

I even dumped half my gold today (taking a 2% net loss) in order to free up more cash for shorting indexes (and because it is bad practice to hold gold against the tide of a stock market rally)

I’m continuing to hold my oil stocks, trying to squeeze another 5% or 10% out of this rally.

Did I make any mistakes during the last two weeks? Yes! I bought Chinese stocks when the Shanghai exchange was at 1850. Then it fell to about 1650.

[jficquette]

How much longer are you going to paper trade?

John

[jficquette]

How much longer are you going to paper trade?

John

[jficquette]

How much longer are you going to paper trade?

John

[jficquette]

How much longer are you going to paper trade?

John

[jficquette]

How much longer are you going to paper trade?

John

[stockstradr]

One more comment for those unfortunate souls who held long stock/mutual funds positions all the way down about this bear market -45%. (*ouch*)

I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.

If you miss this opportunity to sell your longs (at say S&P500=1,100), you will soon find yourself somewhere in 2009, with the S&P500 sitting at about 600 and you’ll then be far more stunned at how beaten up your 401K will be.

[stockstradr]

One more comment for those unfortunate souls who held long stock/mutual funds positions all the way down about this bear market -45%. (*ouch*)

I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.

If you miss this opportunity to sell your longs (at say S&P500=1,100), you will soon find yourself somewhere in 2009, with the S&P500 sitting at about 600 and you’ll then be far more stunned at how beaten up your 401K will be.

[stockstradr]

One more comment for those unfortunate souls who held long stock/mutual funds positions all the way down about this bear market -45%. (*ouch*)

I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.

If you miss this opportunity to sell your longs (at say S&P500=1,100), you will soon find yourself somewhere in 2009, with the S&P500 sitting at about 600 and you’ll then be far more stunned at how beaten up your 401K will be.

[stockstradr]

One more comment for those unfortunate souls who held long stock/mutual funds positions all the way down about this bear market -45%. (*ouch*)

I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.

If you miss this opportunity to sell your longs (at say S&P500=1,100), you will soon find yourself somewhere in 2009, with the S&P500 sitting at about 600 and you’ll then be far more stunned at how beaten up your 401K will be.

[stockstradr]

One more comment for those unfortunate souls who held long stock/mutual funds positions all the way down about this bear market -45%. (*ouch*)

I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.

If you miss this opportunity to sell your longs (at say S&P500=1,100), you will soon find yourself somewhere in 2009, with the S&P500 sitting at about 600 and you’ll then be far more stunned at how beaten up your 401K will be.

[(former)FormerSanDiegan]

[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]

Last chance ?

EVER ?

I doubt that.

Last chance for 6-18 months, maybe.

[(former)FormerSanDiegan]

[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]

Last chance ?

EVER ?

I doubt that.

Last chance for 6-18 months, maybe.

[(former)FormerSanDiegan]

[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]

Last chance ?

EVER ?

I doubt that.

Last chance for 6-18 months, maybe.

[(former)FormerSanDiegan]

[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]

Last chance ?

EVER ?

I doubt that.

Last chance for 6-18 months, maybe.

[Author]

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