For the past few days Yahoo Finance polled their readers this question.

When the Federal Reserve meets on Tuesday the 18th, what will it do?

Lower interest rates	60%
Hold rates steady	37%
Raise rates	4%

The majority voted that the Fed will lower interest rates. Let’s see tomorrow if the wisdom of the crowd theory holds true. If you have never read the book I highly recommend it as it is very informative and fascinating how the theory holds true in the majority of times.

Oilsands Quest is an oil sands play since oil is trading over $80 a barrel and the higher oil goes the more feasible extracting oil from oil sands becomes.

On the monthly chart the stock hit a near term low of $2.37 on a low 39MM shares which means the sellers are out. Then in July the stock climbed higher on 87MM shares more than double the previous months volume. Last month there was 95MM shares which is even more bullish. In the longer term this stock wants to test $8.90 probably within 6 months.

On the daily chart the price touched the lower trend line on light volume of 1.2MM shares and closed at $4.85. This is a good entry point for BQI. I will look into buying this stock on Sept 18 after the Fed interest rate announcement.

I am still in the trade (bought at $1.50) even though for a small loss currently closed at 1.46. The price went down but also on lighter volume which is positive. For three days it did not break 1.46 which is good then should turn up and make a run for the next high.

On Sept 6, I mentioned to place stops since CPST had run up high really quick, I placed my stops in at 1.15 and was stopped out for a profit of 17% on Sept 9 where it went down to $1.09. I still liked the stock so I continued to watch the volume which dried up on Sept 13 and I entered into another long position at $1.10. I figured it might try to test 1.09 again but the risk to reward ratio was worth the entry.

I had a nice gift the next day with a huge pop up to close at $1.24 for a 12.73% gain in one day! Volume displayed good strength and the price may run up to $1.30. I have placed my stop tight to not loose much of my gains.

If the Fed does not lower interest rates on Sept 18 this will disappoint the market and we will see a sell off. The broad stock market will have short covering which means they will sell everything including the good performing stocks to raise cash to cover margin calls. This will be a fire sale and an opportunity to buy gold stocks once the dust settles. The market is already baking in an anticipated rate decrease of between 25 to 50 basis points. So if the market is rising toward highs then why should the Fed lower rates which will further weaken the US dollar.

The US Dollar will go up (it’s currently below the low 30 years ago) and gold will go down and pull the gold equities down even though they are strong stocks in a bear market. I am a long term bull so any pull backs is a great buying opportunity.

[[AEM]] has touched it’s upper trend line so I would be cautious here and tighten stops or take some profits. Like I wrote earlier I believe that gold has reached it’s top any day now and when the Fed’s announce the rate decision on Sept 18 the stock market will sell everything include all the good stocks like AEM. Agnico Eagle is the strongest gold stock in the industry. It may pull back down between 43 to 45, if so I would load up. Gold will hit $800 before the end of the year and all the miners will benefit from the high prices.

On 9/7 I missed the trade as it gapped up above my buy order.  Spot price of gold hit it’s 16 month high yesterday. I believe we will see some profit taking as the gold miners have gained quite a bit in the last 1-2 weeks.

If you made a trade with HMY I would take profits now as we are running into very heavy resistance from the 8/6 date when the price fell on volume of 9.6MM share versus  3.3MM shares today. When gold retrace so will the miners. HMY will retrace down to $10.07 where we can re-enter.

I bought the [[SDS]] today at $50.05 since the price went lower on lighter volume - this is just a classic pullback. The SDS is testing the lower trend line and may go to 54.80 before going up. The SDS is 200% the inverse of the price movement of the S&P 500.

I am bearish on the overall S&P which went higher today on lighter volume which is bearish. Just look at what happened on 9/4 where the price hit a high of $149.98 then fell down. Price broke out of the red down trend line but will fall back in since there is no support.

The SDS chart below is the inverse of the one above. My first target is 58.00 and the second at $60.50 where there is big resistance. I am making this trade ahead of the Sept 18th Fed announcement which I think will bring the market down. I will keep my stops tight somewhere around $54.

[[CMGI]] was an old high flying stock at $150 in 2000. It is a fallen angel stock that plunged down to just under $1. For the past year I have been in and out trading for quick wins. Well I went in today at $1.50 because there was big volume to the up side - someone was buying. Additionally it tested the low on 8/15 at 1.38 on 8.1MM shares then it tested the low again on lighter volume on 9/10 (yesterday)  on 5.4MM shares. Today is also closed on the high from 2 days ago which is very bullish. My  first target price is $1.66 and my second target is 1.99.  Keep your stops tight.

If like me you have an IRA, 401K or SEP account you can not traditionally short stocks in these accounts. In my 401K plan there is no way to protect my investment if the market turns down unless I sell the shares and go into cash as my defensive play. If you have a self-directed IRA you can invest in not only stocks, mutual funds, etfs but also real estate. But not all self-directed IRAs allow you to short stocks - but now there are new securities to trade with to short the market.

A few fund families like ProShares and iShares are offering inverse ETF’s that allow you make money while the underlining index goes down. In most cases the relationship is 1:1 but some offer 1:2 ratios where the relationship is twice the inverse. These are more risky but are very powerful if you manage your risks.

The three most common long ETFs are:

• Diamonds [[DIA]] which track the Dow Jones 30
• Q’s [[QQQQ]] the NASDAQ-100
• Spiders [[SPY]] the S&P 500

But what if the market turns down then we can buy the 1:1 inverse of these ETFs which are

• Short Dow 30 [[DOG]]
• Short QQQQ [[PSQ]]
• Short S&P 500 [[SH]]

But if you are more aggressive and want more leverage action then try the Ultra shorts which are 200% the inverse of the index movement.

• UltraShort Dow 30 [[DXD]]
• UltraShort QQQQ [[QID]]
• UltraShort S&P 500 [[SDS]]

You should take are look at these ETF’s in your portfolio to hedge the market when we turn down but as always do your research and protect yourself with good money management protection by using stops.