COT Report

Take a look if you want to see what smart money is upto. You can get info from

http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm

or you can subscribe to a very well analyzed one at The Smart Money Tracker. A must read in the current confusing market.

However, it should be just one input in your analysis about the market. I think that even smart money can make smart mistakes and their time frame may be different than yours. So though it is good to read different sources but you still need to do your own analysis and thinking. A one liner I dont know where I read -> "There is some truth in every thing". So why not look for truth in as many things as possible. I found it improves my heuristics based the Right Mix strategy for all kinds of markets. It may help you as well.

A little bit of glitter and food is good for next six months

Gold is breaking out to all time high. With US and global banks bent upon flooding the economic system with lot of liquidity it is good idea to have some exposure to precious metal via GLD.

Though you may not notice but people need lot of food whether there is recession or not. The grain commodity ETF, DBA, is a must have. Consider both inflation and rising global population. Add to it the icing of US push to boast ethanol as energy policy and you have the right recipe for further appreciation for grain prices.

DBA may have even more positive reaction to rate cuts then GLD. I see both outperfoming atleast by the first half of this year. After six months we have to reevaluate or if Fed wakes up to inflation and starts raising rates again.

Not much to say about this market

I am not a day trader and can't be one with a a regular job. The current market is for flippers or someone with the guts of Warren Buffet to buy-N-hold even if the market is locked for years. I am not sure if today's panic lead to bottom but I am certain that the drive is not going to be pleasant either on the long or short side in this market. There is one person with great feel for the market and I strongly recommend reading him. He is the master trader Rev Shark of RealMoney.com.

Go buy House, Grains or Gold

Yes that is my take on current reverse splitting of dollar. I dont like inflation and I certainly dont like weakening of dollar b/c that means robbing a consumer and a saver. The first thing to buy now is a house if you dont not already have one. Next is to fill it up with grains. If you have some more free floating dollars then put a gold collar on your dog. All that would be better thatn holding anything $ denominated if the fed keeps cutting interest rate.

What to do now?

1. Dont try to pick the bottom
2. Cash is the king
3. For any reason if you have to invest then their are three relatively better places -> GLD, DBA, RJA.
4. Bulls can't have their private bull party in one select sector if the whole house is on fire.
5. With Fed so happy to come to rescue I wont fight the Fed either. Meaning no shorting.

Selected Short Term Picks

I think the following fertilizer stocks are going to move much higher in short term. You can call them the new momo group:

CF

MON

MOS

POT

TRA

Selected Long Ideas

If you have time horizon of atleast one year then some long ideas are

Agri Commodoties
DBA, RJA: They will benefit from inflation, rising population and US Energy Bill.

Fertilizers
MOS, POT, CF, TRA: With Agri Commodoties going up you will have strength in this group.

Agri Biotech
MON: Same case as fertilizers.

Natural Gas
UNG: Fertilizers need Natural Gas and anyway I think this source of energy is way undervalued.

Gold Miners ETF
GDX: Benefit of higher Gold prices due to inflation will pass on to the gold miners. Since I dont want to take risk in individual names, therefore, GDX is a better choice.

Niche Tech
IMMR: Beaten down. It can still go down even more. Not a bad idea to start some postion under 10. If its partnership with NOK remains intact then it can be huge in future.

CRIB
IFN: India is the best growth opportunity right now. Let China cool down a little bit.

Having said that except IMMR, all of the above names are technically extended. I shared the above names which I think have catalyst to move higher in near future.

I am still watching Solar group. At the moment I think they have some more room to go down.

Thank you Ken Kam for applauding

Marketocracy's Ken Kam featuring my strategy and applauding in the following article:

http://articles.moneycentral.msn.com/Investing/StrategyLab/Rnd16/P1/AllStarTeamJournal20080110.aspx

Google Sketchup

I consider myself one of the biggest fans of Google. Their Google Sketchup software is not only a serious think-draw tool but also an amazing toy. The link to free download is

http://sketchup.google.com/download.html

DBA and RJA looks golden

IFN and IBN are great opportunities in booming Indian economy

Don't Fight the Fed

I am neutral on the market at the moment. With Fed ready to slash the rates to may be even 0.00001% and some big pockets like Warren Buffet and foreign funds rumored to be out shopping it is quite risky to be on the short side. However, the technical picture is quite discouraging for bulls. Which essentially means to either wait out or only buy for long term [greater than 1 year].

I am bullish on DBA, IFN, IBN, SDTH, OPMR, ASTI, FSLR, IMMR [all with atleast 1 year time horizon]. I am also watching JASO and YGE. Solars are at the moment out of favor but once the market finds some footing and crude flirts with $100 you will see everyone gushing to the sector. It is also important that the sector should start announcing new contracts or expansion in production capacity.

Barton Biggs on Investment Strategy

"Although those quantitatively inclined would disagree, to me, investing is much more an art than a science. Intelligence, experience, diligence, a knowledge of history, an open mind and an obsessive nature are all important ingredients for the successful hedgehog -- as are intuition, imagination, flexibility and maybe just a touch of the seeing eye. How you mix and match, or what is the optimal combination of these characteristics, is beyond me. There is no single style. ...

Source: Hedge Hogging by Barton Biggs

Now this is lot mix than my right mix. Quite mind spinning. I picked the above quote from Doug Kass article in RealMoney. By the way due to current market conditions Doug Kass is the must read along with Rev Shark. Read whatever and whoever but always think and research yourself. Be your own guru.

Time to be selected long

If you have atleast 1 year horizon.

MVIS - Opportunity Now

I think it is buy here. I will update more later.

Update on Jan 10: I was stopped out and I am not in the stock at the moment.

Stay on the sidelines

It's not over. Wait and watch how things close today.

Game Plan for January 2008 - Update

I am still of the opinion that for short term traders with time frame greater than one day and less than one year it is better to wait out the most volatile trading times. Now this is for sure general plan but keep your eyes and ears open for any specific opportunities during this month. If I come across something interesting I will post here.

The urge to buy anything and everything is so strong in minds of those who underperformed or overperformed in previous year that they are bound to make poor decisions. It is for this specific reason that I suggest to wait out and watch. The first two weeks see so much tax related selling and buying that it is often challenging to make right moves.