Using a proprietary "volume reversal" trading strategy, Mark Leibovit has been consistently ranked among the top newsletter timers. In his VRTrader, he looks at the outlook for stocks, oil, gold & silver -- and offers his choice for exchange-traded funds for traders to play these markets.
Leibovit explains, "The stock market's decline, besides being huge, is relentless. Every rally was met with selling and fresh lows were soon hit. The Dow crashed through the March and January lows and is now trading at its lowest level since September 2006.
"Apparently, that 1500 point rally off the March low was just a giant head fake. The Dow is now down 19% since last October and the S&P is down 18%, approaching bear market territory."
"Breadth is dismal, and down volume is ten times greater than up volume. Sector action is terrible. Seven of the nine market sectors are down more than 2.5%. Ouch! Financials have done it again and have set a new five-year low. Oil spiked through previous records setting a new record high.
"The precious metals also showed strong gains today with gold up 32.80 to 915.10. We cleared the June 9th high of 907.20 touching 909.50 opening up potential to 931.00 (May 21 high).
"The consensus at the Vancouver Cambridge Resource Conference which I recently attended called for an optimal buy point in early September based on 'seasonality'. The result is that the bears may get an unexpected jolt.
"It is becoming increasingly unlikely that a meaningful rally in the US Dollar Index could come anytime soon. The big upside target for gold would be 1100-1200 and then 1500 on its way to 3000 within the context of the 20-year up cycle which began in 2000.
"According to the German Bank Commerzbank, the 1980 record gold price of $871 adjusted for inflation would equate to $2,384 an ounce in 2008 dollars.
"It is clear that with the infusion of funds into the banking system inflationary pressures will ensue, not to mention the shrinking importance of the Dollar in international commerce. The ETFs to play here are SPDR Gold Shares (NYSE: GLD) and the iShares Comex Gold (ASE: IAU).
"July Silver cleared 17.51 resistance, touching 17.62. This leaves 17.82, 18.16 and 18.33 (May 23 high) as next resistance. Above that is 19.23, 19.78, 20.95 (the March 14 bull market high). Still unfulfilled, is my target to 26.00, not to mention the 'Big Picture' target of $50 in the years ahead.
"Silver is significantly behind where it stood in 1980 at $50.00 an ounce. There is a lot of catching up here to do. Street 'sources' tell me that taking delivery of some forms of Silver is becoming increasingly difficult as large accumulation is apparently now underway. The ETF to play here is iShares Silver Trust (ASE: SLV).
"As to oil, we're in uncharted territory! Will Goldman Sach's prediction of $200.00 come to pass? Appears likely. The advance in Crude has been strong but not parabolic. There is more to come to the upside. Next target would be $148. The ETF here is United States Oil Fund (ASE: USO)."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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