Market Update:  2008-10-24

Here we go again. The next few days, once again, are looking ripe for the capitulation we have been looking for.

This morning’s open is going to be especially exciting since major index futures have halted trading for several hours now due to the fact that they have hit their limit down stops. That means they have traded so low that they are not allowed to trade any lower until after the market actually opens! After a rout in Asia last night, with the Nikkei 225 crashing back to its 2003 lows, our markets could see major turmoil today. In addition, you have the dollar tanking against the yen but rising against the Euro (a joke of a currency), which is sending mixed signals to the markets. We have the potential for an outright stock market crash, down more than 10% in one day, today or early next week. A crash would be a blessing at this point because it would likely scare away all the speculators and help to calm down this raging volatility of late.

To take advantage of this morning’s opening, I have set two limit orders to buy EWJ (Japan) and XLK (technology) around 11-12% below yesterday's close. I don't know if we will get there or not, but we’ll see. Nonetheless, Japanese shares are being given away for practically free at the moment, so I have no doubt in my mind that by buying the EWJ now I will make a great return on it when the markets recover over the next decade or so. Remember, even with stocks selling so low right now, for every seller there is a buyer. I am one of the buyers! If you have any stocks or ETFs that you would like to mark down to even lower prices and sell to me, please give me a ring!

Have fun watching the markets today! If we do get a crash, before 4:00pm I plan to move cash into the S&P 500 index fund within my retirement account. I am eyeing 775-800 on the S&P 500, and we could be there soon. We will know more later. Until then, Happy Investing!

Gregory