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Trader Tracks Trading Alert

Roger Wiegand
September 15, 2005

We have previously alerted our readers to the potential of a large stock market selling event. It is our opinion the time is very close. We have worked extensively to re-check several indicators and most all of them are aligning for major stock market selling session(s).

As you know, we forecast a Dow low of 8450 by December 1, 2005. For this to occur from today's price this means a decline of nearly 2,000 points. We think most of our readers have protected themselves from this event using a variety of precautionary tools. However, this kind of selling is bound to take down some precious metals stocks temporarily with the mainstream investments. You all know the tools of prevention. Tighten stops, take profits if you have some strong positions and buy more gold and silver stock option calls if and when those PM stock prices sell off in a drop.

In our opinion, the Dow selling will be steady and orderly with smaller selling days at the beginning. We now believe the first substantial down day could be this Friday 9-16-05. If on this date we see a drop of at least 150 Dow points to the close, expect heavier selling on the following Monday and especially Tuesday, September 20. Previous Dow selling periods tended toward selling chunks of 400 points. There is no real rule of thumb on this that was just history. The Exchange has circuit breakers built in to prevent a major cascade and runaway market. They simply will not let this happen. However, when circuit breakers are lifted sellers can hit the market again until they are stopped again.

Here are the reasons for our sending this alert: Oil has bottomed and is rising again. Gold had mild selling and recovered. Today gold prices were rising in the after hours markets. The U.S. Dollar is weak and getting weaker. Next we see .8500 support for the dollar. The Transportation Index fell apart and is a major dow selling indicator when it sells. Retailing reports came in very weak. Some retail forecasters are already forecasting a weak Christmas sales event. Housing has a huge head and shoulders top and three major housing indicators all went negative. Bonds are looking weak and the very large health care sector sold off today. The pros are buying OEX PUTS with both hands.

We won't elaborate on the rest as the list is too long and contains more of the same trends. Take the time to review all of your investments and think about what could happen to them in a large Dow selling market. We do not expect a panic nor any bank runs but believe a great deal of stock market value is going to disappear very quickly. Be careful and protect yourself.

Trader Rog - Roger Wiegand
Editor, Trader Tracks
email:
traderrog@comcast.net
Trader Tracks from
www.miningstocks.com

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