The last several months we have been on target with our calls and in a zone. Don't get me wrong, after 25 years of being a market technician, I would never be so arrogant to think I could master Mr. Market. We told members to get long Sunday October 2nd at 1090 and told everyone who would listen to scale out of the market on the way to our 1275 target. We have been telling investors to wait for a retracement to 1188 before getting long again. As the market waits and hopes for a Holiday rally, I see less of a probability for my original year-end target of 1350. However, we will have an opportunity to get long before year-end for a move higher.
Last Friday, we wrote to our Forbes readers that a short term risk was The Super Committees failure to reach any resolution on cuts in the deficit. We told readers we would be a buyer on that pull back. Yesterday, we decided to get long Gold instead of the S&P. Even though we have seen a high correlation between equities and gold recently because of deflationary fears, we think long term Gold will act as a reserve currency opposed to paper based currencies. Today GLD outperformed the S&P by roughly 1.50%. Additionally, last week we recommended to our member to start shorting Crude Oil at the $99 to $100 price level.
For those of you who do not own Gold wait for the 1,605 to 1,650 level before getting long. The chart below is from our Friday's article.
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