I have been doing a lot of maintenance on the main website the last couple days, and as part of that I needed to review the Q4 2008 ending NFTRH (#13 dated 12/27/08) for some reference. I found the following in lucky #13 and thought I would reproduce it here for perspective.
SPX 1200 may now be overly optimistic, now that greed has won the day short term and invalidated the inverted H&S. But this is a bear market and when the day comes that the public cannot take it anymore, and jumps back in while the media are on full recovery tout, just be cautious is all I'm saying. It's noisy out there. Oh, and do yourselves a favor and watch the gold-silver ratio. Da mahkits is dancin' to a beat.
It is advisable to tune out hyperbole (bullish and bearish), look at convention with distrust (and really, has conventional thought not been the undoing of the vast herds of followers, including most financial professionals?) and to have your own plan, subject to ongoing revision through rational thought. At this point, my personal plan holds that a bear market rally is beginning as the markets grind out a bottom. The rough target for the S&P500 is in the 1200 area. The plan holds that the gold miners have begun a new bull market; one that may eventually make heads spin. But be aware, the plan also holds a contingency that if our broad market ‘next leg down’ is as severe as I suspect it could be, some serious profit taking may come into play in the gold miners as well. After the recent panic, we know all too well what can happen in emotionally charged markets despite fundamentals. Markets are now functioning ‘normally’ and the major media, always a day late and a dollar short, continue to beat the dead economic horse. The new US administration will continue a rich history of inflationary policy that has been the product of the most myopic academic minds on the planet; a Keynesian nirvana, which is actually the worst nightmare of honest economists, the likes of whom come from the Austrian school of von Mises and Rothbard.
