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4 things to think about and a bonus!

Hi Ho SILVER!

SLV ZSL Rubber Band Theory. First thing, I'm not suggesting a BUY in SLV or ZSL at this time at all. Especially with all the new margin requirements and volatility going on currently but I am watching for the magic point in time, for a TRADE in the SLV. The Rubber Band theory is that the BBands are over stretched on the way up (SLV)(Parabolic) which would result in a giant snap back (pullback) to a mean. This giant snapback would result in an over compensated snapback to the down side then back up to a reasonable price mean. Looks like 2 STD BB is at 36 but SLV could over compensate to 32 or even 30 the initial breakout. With all these new factors like Margin requirements, Carlos Slim and Co. Dumping we could even see more volatility this time. Retail investors are still holding profits in SLV if it was purchased last summer and might be dumping now because of all the new press, call it "running for the doors." (Capitulation) At some point in time Carlos and Co. know this and are going to be ready to pounce once again on silver. Keep your eyes and price levels on alert. Personally I think this trade (longer term is done for the next 3 to 6 months, But for a 3 or 4 BB trade I'm in!

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Market ideas

As you know I am a Wall Street Technical Strategist which is very long for “Trader” I want to offer up for your personal funds a few choices for you to think about. The companies that follow are very good, stable, growth and actually somewhat conservative choices. I will include ONE somewhat speculative company too.

One thing that I need you to know is that MAY is typically NOT a great time to buy stocks. Sell in May and go away is very real. Wall Streeter’s begin to go to vacation and market volume declines starting in May through August. Because of this I don’t want you to run out and BUY a BUNCH maybe just a little currently. I will give you some guidelines.

Catepillar CAT As you know CAT manufactures Commercial trucks and heavy equipment. This company is leading the Global recovery “I stress GLOBAL” CAT is a world leader and is not subject to fluctuations in just one economy like the US. CAT is a very strong GROWTH story. Even though the company currently trades over $100.00 it is expected to grow much more. If your into PE’s it’s 20 which is low. Currently CAT is expected to grow 30% in 2012. THE TRADE: Currently CAT is at 113.00 they just announce fantastic earnings and is selling off slightly. The closer you can get it at 110.00 the better. I think in this current time frame and month of May there is a very good chance. I would divide the money you allocate to CAT into 4 bunches. 1^st BUY at 110.00. 2^nd Buy if it continues to decline to the 40 Day Moving Average (DMA) then wait. Do not buy your last two buys until CAT moves back up through the 20 DMA and then above your first buy point. Plan 2, Just wait until late July to buy and do the same thing described above at July prices. There is no hurry here because of the summer months.

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Biogen BIIB Biogen is a Leader in the Bio Tech arena. 3 short years ago they were thought to be a possible take over story but they have developed a new compound called BG-12. The data is extremely positive on this new compound and the MS community is very excited! Biogen’s product line is very focused and strong, their other compounds are also highly used in the medical community and great data is coming out every day. This is a company that traded at $45.00 less than one year ago and now trades at $97.00. No longer a take over target. The reason, Medical Community recognition of BG-12, and Big Institution investment. BG-12 is going to be like Lipitor to Pfizer when it was released. BIG! Biogen has hired an additional 70 representatives Nation wide to keep up with demand. Even trading near $100 you have not missed the boat yet. Your looking at a 125 to 175 stock. BG-12 is going to be a huge growth engine that is not communicated on the Balance sheet yet.

THE TRADE: BIIB trades currently at $97.00. Same thing as in CAT divide the Money into 4 piles. If we can get BIIB at 95 that is going to be very good. 90 will probably be a true gift. After that, once BIIB gets above 100 and stays there 120 will come quickly.

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Some what Speculative

Sirius SIRI Sirius is the only Satellite Radio company. Their channel line up is great. Teamed with the NFL, MBA, NHL and NBA along with Howard Stern every news channel you can imagine and type of music to set every mood all for $12.00 month. This company is on the comeback after years of BURN of start up capital and bringing Howard Stern on. They also merged with XM 3 years ago. The stronger of the two names and programming prevailed, SIRIUS. I like this above $2.00. I think you have a lot of upside to 5. When will we hit 5? Don’t know that or if we even will. The momentum will build and institutions will come in at 5. I look at Sirius as a new snowball rolling down hill, there is the potential of SIRI really getting back to 2004 levels of 6 to 10. THE TRADE This is the one that I’ll let you BUY a BUNCH on a HUNCH between $1.90 to 2.10 and forget about it. Don’t go crazy this is our speculative play here and we could be wrong. SIRI is currently breaking out to the upside which means money is coming it. This is positive.

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We are moving on up!

When I was a kid sometimes I got lucky and got to stay up late on a Friday night to watch Johnny Carson. Johnny Carson did a skit where he was the “Great Carnack.” The Great Carnack was able to predict the future! Today we have the “Bernack” Ben Bernanke, the head of the Federal Reserve and the United States monetary policy. Like the “Great Carnack” the Financial Community hangs on to every word that the “Bernack” pontificates. Yesterday, For the first time in Federal Reserve history Ben Bernanki gave a press conference to shed some light on the Fed Monetary Policy. Lucky for every one here I spent my afternoon listening to the “Bernack.” His conference was nothing exciting, be thankful for that because if there was a new economic development our financial markets would have been rocked. While his conference was benign and with no surprises he predicted his same monetary policy of a LOW INTEREST RATE policy to grow jobs only concerned about inflation from a distance. His fear of a no job growth economy is more of a concern of that of a strong US Dollar. Which means the dollar will continue to decrease in value and equities and commodities will continue to rise. The markets DOW, SP500 and Nasdaq all did well yesterday. The SP500 finally finished above our magic 1350 level at 1355.

Is it all systems go yet? Almost, but we must see just one or two more closes over that 1350 level. Will the markets be off to the races? Probably not, we are starting to come into the summer months which marks low volume and Wall Street Traders going on vacation. Because Ben Bernanki’s policy dosen’t give investors many choices to do with their money. Institutions have to deploy money on a monthly basis, the only choices for funds are equities or gold / silver at this point which means stocks and commodities should go up.

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Silver Gold vs. Companies SLW

SLW I've noticed that a lot of the members the past few days are really getting hung up on SLW. I just don't get this at all. All along we have been talking about the SLV and GLD as the ones to hold. Now I know in the past we spoke very highly of SLW but I know this endorsement was one of "as long as the COMPANY and Chart was working. Which during that time it was. The big difference between the two is that one is a company and the other is an ETF. SLW has real earnings to produce and humans at the wheel unlike the SLV which is a proxy of what the world market is for silver. Look at the chart for EGO, would you ever want to own EGO over GLD? NO. How about ABX? NO the companies just don't work compared to the EFTs. So why are so many people trying to WILL a trade? SLV is up from from FEB to Now 26.00 to 45.00 darn close to a double why is anyone fighting this? GLD same chart compared to the COMPANIES. Your charts are not only giving you a home run but many here are not swinging a the ball insisting on a different pitch. We haven't seen a slow pitch softball like this since 07' GOOG or the March 09' bottom. Don't buy the Companies!

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Are you ready to make some cash?

Where are we right now? We are exactly where we were last week in the SP500. That’s not a bad thing at all, as a matter of fact it’s rather constructive to be stuck right now. The SP500 has come a long way since the 1260 low in mid March. We are currently bumping around at 1330 for the past few days. Resistance is right here at 1340. 1340 was also the prior high from mid February. So what does this mean to you? It means that you need to be somewhat involved until the bull is proven wrong and starts to roll over from 1330. If the SP500 rolls over here, and what I mean by this is that the SP500 starts to fall below 1325. If this happens you need to close your positions until it’s safe.

So what is it going to take to get over 1340 / 1350? Well it’s going to take a few things. The good news is it is happening in a slow constructive way. Buyers (Mutual Funds) are coming back in. We know this because the bull just will not stall. Even though Volume has been less than great it is still buying. Fed policy is still Equity Positive. Interest rates are low and the Fed is still expanding the US Balance sheet even thought this is very dangerous for our long term monetary policy, because of this, equities are the best investment.

Where should we have our money currently? The Transports are leading the way. Train stocks, CSX, KSU, WAB and UNP are some of the good choices. Heavy Equipment, CAT and DE are moving. Energy too, PBR, RIG RRC, PCX, ACI and KOL. Finally GOLD and SILVER just continue to climb setting new highs it seems every week.

Now, I am not suggesting for you to pile in right here, I haven’t, but you got to have some things working right here from the above choices, which I do. Once the SP500 gets through 1350 on CONVICTION we have blue sky above and that is when it’s time to really get aggressive. Right now I’m optimistically Bullish and waiting with my guns loaded for a push through 1350. I’m currently holding CAT, DE, FCX, SLV, LULU, and F. Wanting to buy WAB, PCX and more SLV.

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