VRTrader: Top Timer's Outlook

02/14/2003 12:00 am EST

Focus:

Mark Leibovit

Chief Market Strategist, VRTrader.com

Timer Digest magazine has just named technician Mark Leibovit, editor of VRTrader.com, as the #1 Intermediate Market Timer for the past ten years. He also ranked in the #2 slot for 8 years, the #1 slot for 5 years, and the #2 slot for 3 years. Congratulations to Mark from everyone at The Money Show! Here's his latest market outlook.

"As traders, we try and play oversold bounces in the market. However, following any upside bounce, we expect the market to roll over, cascading into new lows. As such, if you play the long side, your stops have to be tight. As I warned, we are ultimately going off the cliff and it's only a matter of how long 'the boys' delay the event. Will it be delayed for a couple of weeks or possibly a couple of months? No way of knowing for sure. The safer strategy is to play the trend and wait to get short at higher levels.

"Washington insiders and anyone with any common sense knows that things have becoming unglued for quite some time. We've been writing about it here for two years--major corporate bankruptcies, deflation, and a disastrous stock market. The problem is that Washington is adding fuel to the fire with deficit spending going through the roof and not even counting the costs of war! The key fact is that the war or lack of is not the answer to the economic ills that have been plaguing the world markets. Analysts are almost uniformly predicting a positive second half 2003 again raising hopes on the part of investors. What if they are wrong?

"Smart money has been unloading stocks by the boatload for months. All the while I've warned you that we were headed down to Dow Industrials 7950, then through the October lows at 7200, then to 6800 and ultimately, I believe, to 5000 or lower. Wall Street is fighting for its very survival with the bear market, scandals, etc. This is a bear market and we're going a heck of lot lower before its all over. Caveat Emptor. Rallies are selling or short-selling opportunities no matter how good the 'news' appears to be.

"As for gold, I'm trying to temper my big picture extreme bullishness against the short-term negative divergence. The sharp downside reversal from $384 was a bit disappointing, but not surprising. I believe any correction is an important buying opportunity. I see dramatically higher prices longer-term, but you've got to be willing to stand the heat in the kitchen. The best strategy is to hold a core position--my core holdings are Newmont Mining (NEM NYSE) and Agnico-Eagle (AEM NYSE)--and should there be a more meaningful sell-off, then buy more."

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