Welcome, Storm Watchers, to the eye of the storm.

Calm, isn’t it? Eerily so.

The VIX—the Fear Index—is asleep. The market—always, always UP in December—is adrift.

Run for your very lives, Storm Watchers, run!

We’ve talked this through before: my Simple Profit System lays it all out: Sell all broken stocks, hunker down, pounce on rallies.

Let others lose what fingers they still own as they try to catch the falling knife of the market. Ignore, yes, ignore, misinformed talk about bargains and P/E ratios.  Just block your ears.

Here are two ways to make a rapid sell decision on any stock today:

1. Because it’s below a declining 50-day moving average. Sell: If there was no significant bounce in the stock over the last 50 days it is because it is IN FACT more dead than a dead cat.



2. It’s stuff. Stuff stocks are commodities. Stuff stocks are retail. Stuff stocks are semiconductors. Gold is stuff. Services are not stuff—there’s some resilience there. IBM was a stuff stock, now it’s a service stock—hold. Got it?

Any questions?

TOTAL CAPITULATION WATCH

November 20 the bottom? No way. The advance since lacks technical spunk. BUT ALSO I keep thinking about FDR’s first 100 days: Dow up 117%.  Maybe. For sure, we’ve got a big step down first.

NEW ISSUE FROM PANERA!

Ice storm knocked my corner of New Hampshire back to the stone age. With the mercury at 15, I headed to Panera with my laptop (OK, not quite the stone age). Considering it’s New England, folks were almost chatty. Over hot chocolate I found (and you will too, if you hurry up and become a subscriber, hint, hint):

•  two blue chips with $10 billion stash o’cash each. One is laughably cheap, the other is a big snack outfit primed to soar in the recession. More on them both here.



• the absolute-slam-dunk-best money market yields on the planet. No minimums, no gimmicks, free transfer, all online.



• Not only that, but I uncovered a short-term CD paying well over 3% from a well-capitalized bank.



• AND a “Tiffany” quality closed-end fund on sale at 23% below its NAV.



• Plus, why you should avoid Treasuries. All here.

Lots of strategic/2009 stuff, too, including (gasp!) a Seven-Year Plan that I believe you should print out, laminate and tape to one side of your computer.  But that’s just me. 

Yes, we’re in the eye of the storm, but my binoculars are scanning for that 117% surge. Happy thought… to begin a Happy New Year.

Richard

P.S.  Start 2009 on the right foot with a subscription to Profitable Investing. During the last bear market and recovery, we beat the market 4-to-1. StormWatchers get in for just $99.95. Do it now.