Jumping in

So it's Thursday, October 16th and I've been itching to get into something. The markets have double-bottomed and all signs point to a temporary rally. Yes, Sprott still thinks we're just in the 4th inning and is still extremely bearish on the general markets long term, and bullish on gold and energy.

I don't want to borrow more money to invest, and I don't want to sell any of my Sprott gold and energy as I believe it's at the bottom. So what do I do? Well, lo and behold I happen to have some cash in my investment accounts that I was unaware of. I thought I was fully invested and never check my account details since I know exactly what I hold and roughly what is happening with it. But this last Thursday, I happened to look more closely and noticed the cash sitting there. It wasn't much money to trade with, but it was a start.

Since my brother believed in a market rally and was buying SSO (and call options on it), I bought into this 2x leveraged ETF too. I agreed it looked like a temporary market bottom.

Also, that day oil had dropped to $70 (from a high of almost $150 3 months ago). Energy stocks had come down so much and were sitting incredibly low this whole week -- about 60% off their highs! It seemed almost too obvious:

• Most oil predictions are around $80-90 for 2008, with Sprott and Merryl Lynch and others still predicting $150-ish oil in 2009-2010. Oil could go to $50 short-term due to lower demand, but that could not last long with the depleting oil reserves and continued increase in world-wide energy needs due to China and other emerging economies.
• OPEC moved their emergency November meeting up to Oct.24th as they are panicked about the crash in the oil price. They are predicted to slash production by $1-$3 million barrels per day to stabilize/increase the price. The market doesn't seem to be reacting to this yet.
• There are many energy companies that will be profitable even at $50-70 oil, and they seem way oversold right now.

I figured there was a potential for big gains here, but I didn't have much money to invest, so I looked for a leveraged ETF and found the Ultra Oil&Gas ProShares (DIG), which I bought on Thursday as well. The only thing I didn't like about this ETF is that Exxon Mobil makes up about 30% of the index; I don't like indexes that have such a large percentage in one stock.

Trades - Oct.16, 2008:
Bought SSO @ 28.63
Bought DIG @ 26.07