gfp: Despite today's market weakness in the face of the abysmal job numbers KOL will outperform the S&P by at least 3X in percentage terms and probably more. KOL was down about 40% while the S&P did not even suffer a 15% loss over the same time period. I think the S&P will hit 1450...roughly a 10% upward move from here. Whereas KOL would experience a 40% gain by merely getting back to its 200 DMA at $32 (well below its previous Feb highs @ $37). Always go with higher beta names like KOL when betting on a relief rally. You get leverage vis-a-vis the plain vanilla S&P index without subjecting yourself to the beta slippage of using artificial 2x and 3x leveraged funds. That which has fallen the furthest will rise the most in the subsequent rally.
Also, I have analyzed all my major holdings..GDXJ, KOL, SLX, XME and PBR....all are still on track for impressive gains by the time this relief rally has run ints course...probably by September. Today's pullback is necessary and understandable. But it doesn't change a thing to my intermediate term viewpoint. Days like today merely frighten investors to take the wrong side or to stay on the sidelines, and that is bullish for the future. Most amateur investors are still fleeing equities if you look at the fund flows...1 out of the last 19 weeks there have been net outflows. This is a good contrarian indicator. Those same investors will pile on at the end of the rally, giving us a chance to sell profitably and change tack to the short side for the inevitable collapse.
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