Model Portfolio Updated
(February 11, 2002)
With the latest rally in today's stock market, the correlation between the recent action in the Dow and the rally early last year (before the gut-wrenching plunge that would take the Dow to an intra-day low of 9,047.56) has gotten much higher:
If the same pricing patterns play out once again, then tomorrow or Wednesday should represent a high for the Dow. From thereon, the Dow would test (and fail) its September 2001 lows before plunging to below 7,500 (with virtually no opportunities to get out along the way).
In anticipation of this huge shorting opportunity, we are suggesting another short position in our model portfolio tonight.