IBD signals market rally

Thursday marked a follow-through session for the market, on Day 5 of a rally attempt as reported by IBD. So has Dow Theory confirmed this bear market rally--or is it the start of a new bull market? Only time will tells us--I can interpret trends--I do not forecast the future. I am not smart enough. I also notice that when I take a market position my objectivity becomes clouded--I look for any evidence that supports my position and ignore the signals that are screaming at me to take my loss and regroup. Such is the life of a trader. I have been blessed by the good fortune of side stepping this vicious bear market--I moved to 90% TREASURIES IN November '07.

I plan to invest soon in this current market rally. I continue to hold a 10% position in precious metal mining stocks. I also look for a rally in the oil stocks and for the U.S. Dollar to decline markedly over the next year. Inflation should start to heat up over the next 6 to 9 months. I monitor the U.S. Dollar interst rates, TIPS, Gold and OIL. My favorite sector right now remains the silver stocks. I look for spot silver to spike as high as $50. I favor holding for 1 to 2 years--I get whipsawed every time I think I can time the precius market and gold trades. I also look for a huge rally in biotech stocks. My current favorite is ARNA.


The bear market peak for the Dow occurred in October 2007 at 14164. The recent low was recorded on March 9 at Dow 6547. This represents a total loss of 7617 points. A one-third correction would take the Dow back to about 9500. A two/thirds correction would take the Dow back to 11629. A 50% correction would take the Dow back to 10355.