Market Exuberance

Our technical indicators show the best buying opportunity started at the end of October and should continue into next week.

After four rare American market advances in a row the traders are hedging bets on the low side.

While legendary investors Warren Buffett and Jim Rogers may have been at odds on the Fannie/Freddie Bailout, they are in complete agreement that we are at an investment buying opportunity of a lifetime. That window of opportunity will end soon as hedge funds lighten up on their short side to reflect only a recession rather than an economic disaster. We expect shoppers to come out after months of uncertainties caused by presidential campaign rhetoric.

As a reminder… during the campaign the Democrats brought out the “D” word and expressed mocking contempt for the abilities of the Republican administration. The Republican’s on the other hand painted the Democrats as socialists about to be elected by 40% of the population who have no desire to work for a living, who pay no taxes, and who planned to vote by the bus load for Democrats (on or two times at least) to get a big re-distribution handout taken from working Americans. The fear tactics worked, polarized the country and drove the economy to the brink. But now Americans know what was said during the campaign was exaggerated. The pronounce death of America was premature. Just as Clinton did, Barack Obama is poised to disarm Republicans and get their support by adopting the more rational Republican platform with regards to energy.

That has all ended and the extreme pessimism is busting into exuberance. We anticipate that after the recent 15% rise from the market bottom that we will resume with at least another 20% rise starting within about a week. That is why we say the window of opportunity to get back into the market will be closed within about a week. We could be in for seeing a short-squeeze of a lifetime which could possibly briefly cancel most of this year’s loss as the markets have a volatile upward swing in prices.