Strategy Update January Recap, February Predictions

1/31/08 End of Month Update = WORST JANUARY IN HISTORY:

When you see the Dow trade in a 400 point range on the same day (the day after another Fed rate cut) -- something is going on...and you better be careful, out there. Those who have been following this site and blog, know that since the end of '07, we have been screaming to pull out of the market by January 2, 2008 to avoid a HUGE down month of historic proportions.

And with historic rate cuts, bail out talk, stimulus packages, and today's 200 point rally -- it is still the worst January in history. Long term investors will say, "So what, it always goes back up." And there is always plenty of money to be made in down markets.

However, for those non-professional investors -- people who cannot afford to take that kind of hit (want to avoid stepping in the biggest puddle in history, if possible) -- then I hope we gained some credibility with you for the future. If you are someone who feels safe because you stick to mutual funds -- or buy a "safe" stock and hold it for life because you know things always go up...this year's market isn't for you. READ MORE

1/31/08 Update (2pm):

* The Dow is up 120 points, after being down 190 on the opening bell. You would HOPE the market would be up after another Fed rate cut! But if people feel the market is at a bottom, Batcomputer says the DOW will be trading in the 10,700 range (the real bottom) between now and August, if not sooner. So please keep that in mind as you make your investment plans this year. It's all about the bond and derivatives market and it's coming down fast and hard. (Feel free to bet against the Batcomputer, but read the Daily Blog for previous predictions first, please.)

* GOOGLE EARNINGS ANNOUNCED AFTER THE BELL: I don't care what the earning results are...in this market Wall Street will find something they don't like and the stock will go down in after hours trading. (But this isn't based on the Batcomputer, just my opinion.)

1/31/08 Pre-Bell Alert:

* You gotta admit -- all SU has done is warn about the bond insurance crisis as we turn the calendar to February '08. Sorry I was off by a day. See 1/30 Closing Bell Investor Alert below. DOW will open up DOW-N! (Hope you can handle the G-Force)

* 1/31/08Opening Bell Update (9:33am): Dow drops 180 points in the first three minutes of trading.

* BOND INSURER BAILOUT: We are looking at nothing less than a massive government bail-out of the bond insurers. Hope they can pull it together in time, before the series of down 300 days hit the market. And SU still feels that the government/Fed will not be able to keep propping up the global economy, long term. A bail-out will help in the short term, but it'll get way too ugly, first because you can never expect for them to pull it together in time -- but I hope they do.

* SEE 1/30 CLOSING BELL INVESTOR ALERT BELOW.

* Gold dropped in overnight trading, but rebounded as the dollar becomes weaker and is trending back up -- but is going down in the 9:00 am hour. Overall, though, don't you think gold will be going up in '08? Should see some up $50 dollar days as the Fed collapses the dollar and inflation kicks in. Gold is the third currency, now. It's not about industrial use, or jewelery. It should be traded as a currency like the dollar and euro. We will see things happen to the euro this year, that we have never seen in history. Things are happening!

* I don't care what people say about supply and demand -- when the dollar goes down -- oil sheiks raise the price of oil to make up the difference. (Added inflation.) So in this case, do not look for an increase in production output to try and bring the price down.

* Weekly jobless claims and consumer spending numbers were released in the 8 AM hour. Reuters says, "Consumers spent less in December than at any time in the past 15 months while applications for unemployment benefits soared last week, two more signs the economy is weakening." This should add a little weight to the anvil, this morning.

1/30/08 Post-Bell Update:

* WE TRIED TO WARN YOU!!! DON'T WAIT TOO LONG IF YOU NEED TO ADJUST YOUR PORTFOLIO! Welp, looks like the bond insurance news Strategy Update has been crying about since late last year -- and early this year -- and even more so this month, warning of problems starting as soon as we turn the calendar to February -- has started to affect the market today, as news is starting to leak out. (See DAILY BLOG and read every thread for the past two weeks.) Evidence? The market was up 125 points (plus), but went south at 3:15pm on this bond insurers news (downgrades starting, and word is getting out that it is much worse) for a DOW close of down 37 points. (And a further slide was "saved by the bell!")

* Reuters Story on bond insurers killing Wall Streets' Rally: Wow, did my Batcomputer and Los Angeles street sources call this one!!! I have NO idea how they know these things, when they know these things (see daily blog)...but at least I listen and have this website to post the news.

* 1/30/08 3 PM HOUR UPDATE: Short term gold traders -- now is the time to sell/take profits for the day. This hour only, otherwise you may want to wait for another bump up, cause at $840/record highs, you will see some profit taking.

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