"Market Monitor"-Mark Leibovit, Chief Market Strategist For vrtrader.com
Friday, November 21, 2008PAUL KANGAS: My guest "Market Monitor" this week is Mark Leibovit, chief market strategist for vrtrader.com. Welcome back to NBR, Mark, good to have you.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Thanks, Paul.
KANGAS: Given the stock market's massive recent declines, do your technical indicators show signs that prices are close to bottoming out?
LEIBOVIT: Not at all. We're still in a bear market. I don't think until home prices turn up and until financial stocks show some life can we really call for a meaningful bottom. In fact, (INAUDIBLE) reversal analysis, we have a protection out of 6500 and we could get lower ones. My thought is, my thought, that said, Paul, is that when President Obama comes in, there's usually this 100-day honeymoon period and markets tend to do a little bit better, so come next year we might see a nice technical rally, but it could come from lower levels.
KANGAS: Let's look at your Dow forecast for the year 2008. We have it up. The chart is there. You made, the forecast earlier in the year in January and there it was. Pretty accurate in calling this recent decline, but it's not as severe as it turned out to be, right?
LEIBOVIT: It was a little early, calling for (INAUDIBLE) but basically the pattern was bear and now it's showing the possibility of some type of recovery, but I'm waiting for the other technicals to confirm before we start becoming bulls.
KANGAS: What investment strategy are you using in this highly volatile market environment?
LEIBOVIT: Basically, we're trading the market. You know, the volatility we've had, Paul, 1,000-point swings every day or two. I don't know how you can call yourself an investor if investors are uncertain. They should stay in cash and wait until the trend decidedly turns up. But as a bear, I would short the rallies or buy inverse ETFs.
KANGAS: OK, now you've been a very strong proponent of owning gold investments and although the precious yellow shot up sharply today, why hasn't it done better as a safe haven for investors?
LEIBOVIT: I think there's been some artificial moves here, de- leveraging by hedge funds, margin calls. There's a big discrepancy between the physical market and the paper market. It's almost impossible to buy coins and bars. There's hoarding going on out there. Basically, I think the function of the dollar has been strong. Interestingly today, the dollar broke out to new highs and gold was really strong. I think that's very positive, plus we got above the 775 resistance level which says we might be headed to 6 to 800, 850.
KANGAS: Let's look at your gold forecast for 2008 made back in January and there's that summer dip, which we had and now it's starting to rally again.
LEIBOVIT: You know we can come in on a Tuesday morning, Paul and it could be some coming Tuesday, and gold could be up $500 an ounce. I think we can break through 8, 850, we're headed to 1200 and ultimately to my big targets. So if it doesn't happen now, I would say accumulate the gold because this is your ultimate hedge. Gold will not go to zero. We've seen Fannie Mae go to zero and we can name a bunch of other stocks but gold will not go to zero. That's your ultimate hedge.
KANGAS: You're sticking by your forecast for over 3,000 long term.
LEIBOVIT: Yes, I think there's going to be some pegging of gold currencies like we saw in the Breton Woods (ph) agreement back in the '40s. It's coming. I can't obviously pinpoint the time.
KANGAS: All right. Your target price for silver was $50 per ounce. Are you still that?
LEIBOVIT: I think so, but given time, you'll see that take off as well. There's also talk that there's not enough physical silver for delivery at the Comax (ph). If that is really true, we could really take off.
KANGAS: We're down to one minute. Let's look at your April visit recommendations and how they've done since that time, Spider Gold, the gold trust (GLD) down about 13 percent, 46 percent drop in Silver trust (SLV). Are you still with them?
LEIBOVIT: Yes, I think this is, again, a function of the artificial de-leveraging in the market and this is temporary.
KANGAS: And Pan Am silver stock (PAAS) down 68 percent. Do you still like it?
LEIBOVIT: I got to buy it down here. You can't be selling it down here. I like the physical metal better. But let's go for the shares as well.
KANGAS: 30 seconds, a new recommendation or two.
LEIBOVIT: One I'm going to add is CEF, which is the Canadian central fund, central fund of Canada, that is. This has no third-party risk or counter-party risk like ETFs, like the GLD and the SOV. I would buy CEF as a combined silver and gold.
KANGAS: Do you personally own any of these securities mentioned or have other disclosures?
LEIBOVIT: Yes, I do own these securities.
KANGAS: Our time is up but I want to thank you for sharing your views with us once again.
LEIBOVIT: Thank you, Paul.
KANGAS: My guest Mark Leibovit of vrtrader.com.
