The blogosphere is buzzing with lots of posts about the Asian markets dropping especially the Hang Seng index in Hong Kong down -6%. Look at what’s on Yahoo! Finance. Yikes as I’m writing the index is still selling off now down -7.30%. That is huge for a broad index but Asia was due for a massive correction. The US markets look like they will fall at least 4 to 6% also in the morning.

Is this going to be a blow off bottom?

I thinks it’s too early to confirm that. Like I said the financial markets are in big trouble and need help. Look at Citibank and Countrywide.

I have sold a few gold miner stocks like RGLD, ABX and continue to hold the SKF, TWM and QID to play the short side of the Financial ETF XLF, Russell 2000 and QQQQ. I may sell my shorts tomorrow if the volume is massive.

On Tuesday Jan 22 I think we will see the follow:
SKF (Friday closed at $129.65) to $140
QID ($48.30) may hit $52
TWM ($90) to $96

On Friday I got into CPHD at  $30.05.The set up is strong but the overall market may take this down. I have my stop in place.
Also got into HOKU at $9.20. The volume was bone dry meaning the sellers were gone….hopefully….let’s see.

If you are not a trader then stay in cash and look to buy in about 2 weeks as we need some confirmation of support. Look to buy the gold miners (AEM, GFI, ABX, GSS, GFI, RGLD, GOLD) and gold (GLD).