Interesting Links

[ilonaross]

http://www.huffingtonpost.co.uk/2011..._n_983156.html

Stay tuned.

[ilonaross]

I will have a full market update this weekend. However, I wanted to put out a
quick note to underscore two points.

First, and most important, is that high levels of cash and preserving capital
are key. In my past report, I discussed the characteristics that led me to
believe the market's rally off the August 8 lows was anything but a "fat pitch"
and lacked the power associated with a new uptrend. Since then, the market
indices have traded sideways, while institutions have rotated from sector to
sector distributing stocks en masse. It now looks plausible that the August 8
lows will be taken out and that another down leg in this bear phase is upon us.


While the mass media is now admitting this is a bear market, the market has
given us plenty of clues over the past few months that its tone was anything but
healthy. In fact, the tape is much worse than what the indices tell us- many
former leaders have fallen 50-75 percent while many financial and commodity
stocks are selling at levels not seen since the crash of 2008-09.

The bottom line is that we are in a bear phase for stocks, the market's trend is
down, and there continues to be serious damage and distribution almost every
day. Faced with these indisputable facts, preserving your capital, and
psychological capital is of utmost importance.

Second, while it is fruitless to predict how long the downtrend will last, the
good news is that this bear phase will end too. As we move lower, and selling
picks up, the doomsdayers will grow louder and louder that the world is ending.


The market has an incredible ability to forecast the future, so do not be
surprised when the market ultimately bottoms while all the news is bad. I can
promise you it will. I always maintain that these bear phases are a prudent
speculator's best friend- as they lay the foundations for future bull markets.
Our economy has survived many wars, political unrest, economic hardship, panics,
stock crashes, depressions etc. So to will it survive the various problems
facing it today. While significantly lower prices could be in store for the
market in the near future, a strong bull opportunity could arrive sooner than
people realize. (I will outline this over the weekend). While the negativity
is rampant as stocks go lower, remember the importance of preserving capital to
take advantage of the next giant opportunity that will most certainly emerge
from the depths of this bear market.

As always, please email me with any questions or comments.
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