1. Sell in May and go away, stay away till St Leger's Day OR STAY TO PLAY?
For me these are difficult markets.  The likelihood of a continued rally based on false information, sloppy reasoning and unrealistic hopes is quite High. Stubborn Shorts can easily be squeezed.On the other hand, there is greater and greater risk if markets continue to rally By or before summer and next earning season, the disconnect between reality and markets will be abundantly clear to all. 

Fundamentally, I agree that by the Fall 2009, an economic bottom will be in short term. However, I see it flat lined and not recovering into 2010, when markets will be BOTH challenged and exuberant again. I believe that both the US consumer behavior changes as well as reduced US dominance is not likely to be short term but long lasting!
Bottom line: Market even more volatile this year than last  and we see the necessity to TRADE more frequently.

My advice remains:

• Choose Caution over Greed.
• Use trailing stops, covered calls and hedging e.g. precious metals and long/short pairing.
• Keep highly liquid: Cash is not yet trash.
• Slowly accumulate deeply undervalued physical assets (e.g. Real Estate and high end collectibles) which despite potential declines short/intermediate term, will provide longer term appreciation.
• If you are heavily invested in today’s markets, keep one eye on the exit!  

WSNW ALERT: “While both will be higher late on, it is time to lock in, take profits on some if not a lot of Silver, Gold and Oil positions.
Premarket May 7^th: Next week they may reverse and then be prepared to go long again thereafter.
You can therefore write calls, place profit stops, take some profits etc. Maybe they won’t correct, but maybe they will. 

Consider the same for the market stocks today or tomorrow as well if you have not… unless you believe the market is going straight to 8760 and THEN higher!
WSNW ALERT: While both will be higher late on, it is time to lock in, take profits on some if not a lot of Silver, Gold and Oil positions.”
 

MARKER        Dow 8560  SP 928    NAS 1770    XOI  972    XAU 138.50

5/7 EOD                 8409        907           1716           944            133

5/8 EOD                 8574        929           1739          986             138

 
NOTES:
Will 5/11 again offer Day trading delight or lasting profits?
Should markets rally much further, then we could have a mother of all short squeezes.
Stay alert; remember there is also GREAT risk to being long the market which is currently overvalued. 

 
KEY DATES:    MAY 13, 15
DJIA:                8500 PIVOT 8760 RESISTANCE
SPX:                925 PIVOT
NASDAQ:        1750 PIVOT
XAU:                125 PIVOT 145 RESISTANCE
JUNE GOLD:    908 PIVOT 900 SUPPORT R1 925  R2 940 R3 950 R4 960
JULY SILVER:  13 PIVOT 13 SUPPORT 14.50 RESISTANCE
XOI:                  900 PIVOT
DEC OIL:           60 PIVOT 56 SUPPORT 66 RESISTANCE  

The current Market Marker Sentiment is Some worry, then bargain hunting, then return to worry.
2008 CLOSE:           DJIA   8776, SPX   903 & NASDAQ 1577
2007 CLOSE:           DJIA 13264, SPX 1468 & NASDAQ 2655
2006 CLOSE:           DJIA 12463, SPX 1418 & NASDAQ 2415
2005 CLOSE:           DJIA 10717, SPX 1248 & NASDAQ 2205
DJIA:                        8 ~ FV 3 UV; 8 offer 4%+ Dividends 4 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. Blue-light specials

As WSNW readers know, I am a big fan of Canada.  Given our macro economic views, we rate it as one of the best G20 countries to invest in. The Loonie or Canadian Dollar was clearly undervalued under $.80.  However, today, .85 to .88, short term seems like Fair Value.WSNW readers may wish to review our favorite stocks up north at our recently revised premium WSNW post  CANADA 12 (4/11/2009). 

3. Junior Gold and Silver Miners a Bargain

Short term, we may accumulate more quality silver microcaps before the end of May, and gold microcaps by Summer, hopefully well before Godot’s arrival!
Warning: Seasonally speaking, Summer has been traditionally a poor time for precious metal stocks. 

4. “The fact that we’re not going down and not correcting is important. It shows the persistence of the rally.”
Richard Sparks, vice president of research, Schaeffer’s Investment Research
HW: The fact is you can fool (almost) all of the people some of the time! 

“When you have record job losses, you have to expect record declines in spending and economic activity in general.”
Richard Yamarone, chief economist, Argus Research
HW: Duh! 

“How much do we really want to be paying for stocks if long-term interest rates are going to be higher?"
Bill Feingold, managing director, Newport Value Partners
HW: Not as much as stocks are trading for today! 

5.  Stock Charts Fail Forecast Test With Complete Miss of S&P Trading Markets 

Stock Technicians' Verdict: The Market Rally Will Continue

Year of the 'W' 
Eventually, the shape of 2009 could end up resembling a "W." So, just where are we on this roller-coaster ride?

6. READER: Do you like natural gas at this point?
HW: While Oil was forecast to bottom by April, it may be too early for NG. While fundamentally under $4.50 it is undervalued, NG may not bottom until Summer. Still, NG stocks are worth watching and may be worth accumulating soon. 

READER: So far you called May correct for an up move in silver~!
HW:  Yes, a profitable trade. However, we have taken short term profits.  Our plan is to re-enter between later next week and the week after. 

READER: Fantastic job on PLLL.  Have you been taking profits on the way up or holding for a much higher rise/or doing both.
HW: YES to both depending on the time horizon.  I find nothing wrong with taking periodical profits and personally sold 1/4 at $2.05 Friday
I see PLLL going to $3, but will it be next week, next month, next quarter or next year? I don’t know.
I also have some longer term GTC sales placed at $5 and $8.
Note: I have recommended taking/protecting most  larger cap energy profits short term primarily for  money management reasons.

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