Time To Look For A Follow-Through Day, After Today’s Bullish Reversal Off The Morning Lows; Metal Ore/Gold/Silver And Select Oil&Gas Stocks Are Our Leaders

March 13, 2008

I am going to make this quick as I have decided to take it easy today and tomorrow, since so many donkeys have told me to buy stocks, have been PROVEN WRONG AGAIN with their selections (HNSN on Fri and BSC on Wed) and yet neither one apologized to me. What if I was an idiot and bought those two after those “can’t miss” recommendations? Oh well, I guess they never really cared.

Well, I care, and what I care about is making sure you are ready for a potential move higher. Now, while I doubt we are done with our bear market (leadership SUCKS and the economy has JUST STARTED to turn lower), there is a potential bounce setting up.

For the first time since the selloff started, the indexes are now rallying on heavier volume while pulling back on lower volume. The past three days action has been very constructive and with gold/silver and other metal ore stocks continuing their move higher, with a TON of oil&gas stocks breaking out today, I think it is safe to say we can expect a bounce.

For it to be a real bottom, I am simply going to have to see more technology or innovative industries appear in the top 20. Not the crap that is in the IBD list now (please go look at the top 20 industry groups in IBD; if you don’t have IBD, they will be in my RM column on Friday). You will see that all of these industries are BORING, commodity, cyclical, and non-innovative industries. These are all necessary industries. And while a bounce can lead to a very nice rally. You are not going to see a 40% move in six months by the Nasdaq with this leadership.

So be ready for potential follow-through day and look for good places to get long select oil&gas and gold/silver stocks. If the FTD fails, then you know to cut your losses. But God knows if you find a chart you like in a SAFE buying position you better not hesitate and pass it up. A follow-through day should NEVER be discounted but you should only hold the stock if it continues to move up. If it fails and reverses, you know something seriously wrong is going on and it is time to get out.

So, one more time, for newbies, CASH IS KING. For you experienced guys, I assume you have some MTL AUY and others long, it is also time to go out and get some oil&gas stocks too. Not a lot, but with oil hitting $110 and these charts the way they are, it makes sense to get a little long.

Aloha, and I will see you in the chat room, where I will be on, off-and-on. This is my first break since October when I went to San Franfreako. I think I have earned it, especially with some of the lame emails I have received from some really horrible investors/traders. ALOHA!

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Posted by Joshua Hayes | Filed Under Bronze Commentary 

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