When crude was trading at 147 the model identified it as a huge bubble ready to pop and we issued a target of 57 into as early as September 2008 with an ultimate target of 36-47 dollars into the first quarter of 2009.  (We spent about three weeks in a padded room after that call but have officially handed the room key over to the guys who forecasted 200-300 dollar crude based on global demand and blah, blah, blah…)

Anyway, we’ve seen the 47 target reached now and the model looks bearish into 12-22ish so, believe it or not, I think we can actually trade to 36 dollars this month!

Bigger-picture it doesn’t matter but we’re definitely going to have to adjust the ultimate target down to about 19 dollars over the coming three years as we fall deeper into what appears to be a global economic depression.  Sorry, I’m just the messenger.

Remain LONG the DUG as it should trade back above the year’s highs as early as year-end or Jan 2009.  Notice that the DUG is closer to all-time lows than all-time highs BUT crude is closer to multi-year lows than multi-year highs!  Somebody is DEAD-wrong here, and the model says the bottom-fishers in the energy stocks are the ones who are wrong. 

Look for a tremendous puking of all energy stocks between today and year-end. 

RIMM 

The model has been short RIMM for a very long time (in fact we were SEVERELY buried in this name for many months) and when the stock was trading over 140, the model’s 15.74 target into 2008-2009 looked like an absolute joke. 

Today the stock trades at about 38 dollars and although 15.74 remains a distant target, we’ll remain short the stock (probably into 12-12 at least) to see how close they can take us to that mark.

A massive short-covering/buying stampede comes in this name after the new year (according to the model) so we’re running out of time on this crash leg and I’ll be keeping a close eye on the stock as I move closer to the exit door.

Full report coming soon