My 1st Million At 33 – yes, you can do it too

I started to wonder whether I jumped my gun too soon this week. I have been waiting for too long, and maybe I simply got impatient. It’s good that I have plenty of cash left to average down if I have to. After reading Robert Hugh’s article, I’m a little doubtful of myself again.

I don’t believe that market will crash like what Robert Hugh indicates. I’m playing all of my cards according to the this chart. I haven’t had time to blog this chart & the cycle theory behind it yet. The chart is assuming an 8.6 year cycle which I believe to be more important than 4-year election cycle.

For the above chart to play out for the general market, I think it would be better if both gold & oil markets are subdued somewhat. That way more money can flow into the general market. But it is always possible that only gold goes up with the general market, or both oil and gold goes up with the general market.

I’m betting that too much fear is placed in the ARM resets (I will explain this later), and that economy will not face a hard crash in the short term. Plus Fed will stop further interest rate hikes. All these should play positively for the general market until Feb 2007. Plus the money on the sideline waiting for the bottom in the 4-year election cycle in Sep/Oct timeframe. All these should give us a rally towards the year end I believe.

For the gold market, lately it has been fairly weak. I believe that it will be maintaining above the 200 moving day average. I hope that the descending triangle will be resolved in 1.5 to 2 months to the upside along with the general market.

For the oil market, I think in the short term, it’s still negative, which of course, will be positive for the general market. I’m expecting crude oil to go down towards $66 first, and then either trade in the range or go up.

Both gold & oil markets probably require a lot more patience.

I do hope that the general market if not turning up now, at least make a V-shape bottom in Sep/Oct, and bounce up strongly from that point on. I’m planning to liquidate big portion of my stock options in Jan/Feb of 2007, and expecting that commodity markets retake the center stage in April/May of 2007.

Now, let’s hope that everything goes as planned. (I’m probably dreaming here.)

Of course, the bottom line is still diversification (yes, admit that you’re stupid compared to market is usually a better strategy). Unless an all-out deflation of all markets set in, I am happy to have either gold, oil, high-tech, or general markets to go up. I do believe that such deflation possibility should be small. But my strategy definitely doesn’t cover that scenario yet.

In any case, combining all cash sources including leveraged funds from my relatives, that will be invested through me, I still have about 25% cash. That should be a lot of money for bottom fishing, ASSUMING that stocks will turn up after that.