Strategy Update Pre-Bell Report for Tuesday 1/29/08

1/29/08 Pre-Opening Bell Update: Batcomputer says "UP" at the bell -- but be very careful...lots of numbers coming out today and tomorrow before the Fed announcement regarding a rate cut -- and if you look at the economy -- do you really think all of these numbers are going to be good? And remember, one little number that disappoints Wall Street, and look for a Southern trend. (And many numbers have been good, but still disappoint Wall Street. BE CAREFUL BETWEEN NOW AND THE MEETING!)

PLATINUM and PALLADIUM has skyrocketed more than gold and silver this week, due to a temporary closure of the biggest producer of these metals in Australia. That sent these metals skyrocketing beyond the gold and silver's record rise. SU recommended PAL last week, and it was up big -- so be careful now. If PAL goes down to $4.20 a share, you might want to jump on board. But most people feel safer with gold.

AFRICAN GOLD MINERS have been hit hard, just as gold has taken off, due to electrical power outages that kept mines shut last week and this week. Harmony Gold has suffered the most, down 6% yesterday, when other miners had a good day. Gold Corp (GFI) just announced today that they will be back to 80% power by Wednesday. So if you wanna buy a gold miner today, and want to try a "riskier play", if you buy these African miners while they are still down -- you may see an extra big gain, when they catch back up, once power is restored. (As long as gold continues to rise. SU feels gold will be much higher in future months.)

GOLD PICKS: Late last week, SU bought UXG (US Gold), the gold mining stock, was up 26% yesterday(20% during the day, and another 6% gain in after hours trading.) 3 of the Top 3 most up miners yesterday were 3 of the 4 miners in the SU portfolio. In other words, we picked 4 metal mining stocks, and 3 of them were the 3 most up, during gold best day in a long time! (Lucky guess,es y'all!!!) Mining stocks are yet to catch up to gold's record rise -- so look for a lot of catching UP with metal miners.

SIRIUS: Yesterday's pre-bell pick, Sirius (SIRI) was indeed up, as expected on news that the F.C.C. may be close to announcing the longly anticipated merger apporoval with XM (XMSR). If and when the F.C.C. announces the approval, expect Sirius to double in price. (SU feels the merger WILL be approved.)

DOW will be up on the bell, in expection of a nice Fed rate cut of half a point. And durable goods numbers were good, as announced at 8:30 AM this morning. But more numbers lie ahead that can reverse this optimism. And although Wall Street puts the chance of a half point rate cut at 80% -- do not bet against Bertankie to disappoint Wall Street, because he doesn't want to appear as though he is being pushed around. And with oil prices rising today, good durable goods numbers -- and the possibility that last week's huge tank on Tuesday (that caused an emergency rate cut) may have been caused by the French rouge trader -- perhaps the Fed will say things aren't as bad as we thought -- and won't cut a full half point for fear of causing stagflation.

THE ONLY REASON I WOULD NOT BET AGAINST A DISAPPOINTING FED RATE CUT -- IS BECAUSE THE FED MIGHT NOT WANT TO PISS OFF THE WORLD AGAIN BY SINKING THE GLOBAL ECONOMY. AND (and it's a BIG "and") our sources feel the Fed has some dismal data that they are looking at, that they haven't told us about, yet. (Credit/subprime/bond insurance, for example.)

So let's see if the Fed is gonna go with the flow -- or do what they actually want to do. (No cut out of fear of stagflation.)

AGRO STOCKS: I don't care how much speculators say the Agriculture sector is overpriced. I like these stocks like POT, MOS, MON, AGU, MOO and others. With a population boom, and emerging markets wanting more protein like meat -- fertilizer (MOS) is better than gold! (Feed, Seed are some others, but they go up and down with more volatility, but if you believe in the sector and like a little more risk for a little more gain...

SUMMARY: Although DOW will be up nicely at the bell, be very cautious, because the subprime/credit/bond market is much worse than people realize -- and with a lot of numbers coming out between now and tomorrow -- anything can happen, and I don't even think the Fed has made the final decision yet. (With Wall Street 80% sure of a half point cut, can you imagine what will happen to the market if it is anything less?)

And SU not only picked Sirius to rise out of nowhere (which it did), the gold stock added to the SU portfolio at the end of last week was up 26% on Monday -- and the Top 3 most up miners yesterday (on the day gold has the big record rise) were 3 of the 4 miners in the SU portfolio. (Not bragging here: Just trying to get some people in my life to start going with the flow, and stop trying to convince me how wrong these predictions are. NO ONE wanted to buy gold when it was at $800 -- and they made sure to tell me how wrong the predictions were.)

FORGET THE REST, STICK WITH THE BEST.

StrategyUpdate.com

(disclosure: UXG, PAL, AUY, EGO)