My takes on the stock market, and what lies ahead...
Today's 512-point plunge in the Dow reminded me of the Crash of '08. We may see a "relief rally" on Friday of a few hundred points; however, if the news from Italy about possible bank runs and credit locking up is true... then look out below. I don't see a sideways market today... it'll probably be a 'rocket ride' up or down.
If we get the rally, Wall Street has dodged a short-term bullet for now... but there are many more financial and economic "bullets" to come. If it tanks lower, then Katie bar the door - this could get real ugly, real quick.
I implore any investor with 401(k) or IRA money in the stock market: If you don't know what you're invested in (or why), GET OUT OF THE STOCK MARKET - NOW. If you can't get out right away, wait to sell into the next rally and go 100% to cash.
Only the nimblest of traders can survive in this market, forget about 'buy and hold' investing that most financial planners and stock brokers recommend. Their job is to get you and keep you in the stock market - probably not what's best for you and your wealth.
Through all this panic and fear, I see two ETFs and an index that I like:
UNG - Natural Gas ETF, which hit a 52-week and 2-year low today. Nat Gas has a history of going dormant for a few years, then exploding higher like a volcano. This could take awhile to realize gains, but if you're patient enough (a few months to over a year), I like buying this ETF and longer-term call options at strike prices of 12.00 and 13.00.
SLV - Silver ETF that's directly tied to the NYMEX spot silver price. I'm not sure if the sell-off in silver is done, but as we see more panic and less trust in paper financial assets, more investors will put money in tangible assets, like gold and silver. I want to see Friday and Monday's trading action to make sure this short-term move is close to finished, before going long on SLV.
VIX - This is the volatility index, which popped 8 points today - or about 30%. The more fearful the market gets, the higher the VIX goes. If we get the relief rally on Friday, the VIX will come back down - which could give a great buying opportunity for the index or call options. But if the market tanks and the VIX goes higher, wait for the next pullback to get in.
You ain't seen nothin' yet, this stock market has a long ways down to go - possibly to the March 2009 lows of 6,500 on the Dow.
Pull up a chair and get your popcorn out - Friday's market action will be a heckuva show.
If we get the rally, Wall Street has dodged a short-term bullet for now... but there are many more financial and economic "bullets" to come. If it tanks lower, then Katie bar the door - this could get real ugly, real quick.
I implore any investor with 401(k) or IRA money in the stock market: If you don't know what you're invested in (or why), GET OUT OF THE STOCK MARKET - NOW. If you can't get out right away, wait to sell into the next rally and go 100% to cash.
Only the nimblest of traders can survive in this market, forget about 'buy and hold' investing that most financial planners and stock brokers recommend. Their job is to get you and keep you in the stock market - probably not what's best for you and your wealth.
Through all this panic and fear, I see two ETFs and an index that I like:
UNG - Natural Gas ETF, which hit a 52-week and 2-year low today. Nat Gas has a history of going dormant for a few years, then exploding higher like a volcano. This could take awhile to realize gains, but if you're patient enough (a few months to over a year), I like buying this ETF and longer-term call options at strike prices of 12.00 and 13.00.
SLV - Silver ETF that's directly tied to the NYMEX spot silver price. I'm not sure if the sell-off in silver is done, but as we see more panic and less trust in paper financial assets, more investors will put money in tangible assets, like gold and silver. I want to see Friday and Monday's trading action to make sure this short-term move is close to finished, before going long on SLV.
VIX - This is the volatility index, which popped 8 points today - or about 30%. The more fearful the market gets, the higher the VIX goes. If we get the relief rally on Friday, the VIX will come back down - which could give a great buying opportunity for the index or call options. But if the market tanks and the VIX goes higher, wait for the next pullback to get in.
You ain't seen nothin' yet, this stock market has a long ways down to go - possibly to the March 2009 lows of 6,500 on the Dow.
Pull up a chair and get your popcorn out - Friday's market action will be a heckuva show.
Labels: 401k plans, gold, natural gas, silver, stock market, VIX
posted by Brian Ochsner | 11:52 PM
1 Comments:
great insight Brian, makes a lot of sense. Justin Stranere - Bucks County, PA
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