Are you keeping an eye on those prices I wrote about? Sun is back in buying territory and the others are getting close. The wheels are falling off the rally bandwagon and it looks like we’re in for a couple of weeks of downward spiral.
If you’ve been reading this page regularly, you knew it was coming. I suggested buying Sun last fall at around $2.50, suggested selling last June at prices over $5, and have been preparing you for another buy at prices below $4. When the press is wringing its hands about the grim future, I’m buying. When times just can’t get any better, I’m selling, or I’ve already sold and am waiting for prices to fall even farther so I can buy again.
The summer was very good and we were long overdue for this correction. Things have been good since the Iraq War started in March. It was called a war rally for a few months. Once the war turned out to not be as good as everybody initially thought, the rally continued and has now become an improving economy rally.
Well, come to find out, the old economy isn’t as good as everybody initially thought, either. The nagging fact that a recovering economy that’s losing jobs appears to be missing the major advantage of recovering has finally sunk in. Then OPEC drove the price of oil up. Then Kodak slashed its dividend. Now, suddenly, hands are being wrung again.
Great news for clear thinkers like you and me. This sullen mood should provide us with plenty of buying opportunities between now and mid-October. Best start scooping up shares of Sun, get that double Dow program going from the bottom of this trough, and keep your eye closely on the price targets I showed in my last post. Once this fog clears, we look well-positioned for a nice end-of-year rally.
And, by the way, clap yourself on the back for NOT buying at the nosebleed prices recommended by all the geniuses at the major investment newspapers and websites. Watching them change stripes from bear to bull and back to bear can make you dizzy.
Here’s a good rundown of the market.
Look insideThe Kelly Letter
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