Apocalipse or a unique oportunity

Beware the pre-election fake-out rally!

While everything could look cheap at the current levels, we could see the markets go down further to reflect the "real economy", i.e. increasing unemployment which will further act as a drag on the 66% of GDP consumption-led economy of the USA. Company earnings will most likely decline, and this may add further fuel for downside action. However, the market may have already discounted this, but it remains to be seen, i.e. the DOW will need to stay above the mid 7000s. As Bill Gross (the portfolio manager of the world's largest bond fund at PIMCO) has called earlier, the DOW could very well see 5000.

The most conservative thing to do in this environment would be to stay out of the markets and be in cash (but, cash that is readily available and accessible). If you must be in the market, definitely have some gold exposure, and it never hurts to be short the overall market indices (DXD, SDS) while being long a few stocks that will be around over the next 50 years, i.e. MMM, PG, KO, JNJ, K, GIS, MCD, CL.