With the benefit of just a few hours of sleep (but no calls in the middle of the night thank you), I awoke to find numerous emails already from readers regarding my 10PM post last night.

First and foremost, it’s critical to remember I’m not a financial advisor nor should my commentaries be treated as such. I’m honored and sometimes (like in London) flattered that readers have made my work a regular part of their daily lives. I was truly blown away in London when a man in his mid 30s, and the head of a natural resources group run by one of the biggest Asian companies in the world today, not only told me how critical my work has been in his, but named his son after me! You will never know how much such a feat makes me feel about my work and overwhelms the handful of rather nasty comments I receive on occasion.

“Okay Peter, what about the markets” is what many are saying at this point of my commentary.

So that my update last night is “crystal clear”, let me sum up where my mind is at as of this moment.

U.S. Stock Market – Since the fall of 2007, I’ve stated that America was in serious dog-do. While I was blessed to foresee much of an incredible bear market rally, I never loss sight that such a rally was not a new bull market but a bear rally in a secular bear market that I constantly stated would need at least to eventually retest the 2009 lows. I compared my expectation to what took place in the Japanese stock market from 1989 until present.

While I was never able to get short, I also am not caught with my pants down to my knees but my limited exposure to mining shares has caused unfortunately some of my butt to be exposed.

As noted last night, out of this carnage an explosive rally should be born. But one should not think this is the second coming of a mega bull market but rather relief rallies within a bear market that has many more years to run its course (of which its ultimate target is at least the 2009 lows).

Gold and Silver – From the spring of 2003 until today, yours truly has seen gold and silver as the single best assets, bar none. I was blessed to have sidestepped some rather nasty corrections along the way. Since 2003, I’ve suggested gold being one’s single largest holding by far. I’ve maintain up to a 50% exposure to gold up until last evening where I suggested lowering such exposure down a notch. You will see that in my updated “Tracking List”, I lowered such exposure to 40% but also increased mining share exposure from what has almost always been limited to 20% to 40%. This is because while I still think gold can rise to my new target of $2,350, I think we can finally see the mining shares outperform the metals going forward (fingers, toes and everything else I can cross).

Let’s not forget that it’s the very things that unfolded for why we were so incredibly bullish on gold $500, $1,000 or even more lower. The difference now is it’s no longer cheap but still worthy. I can tell you don’t be surprised that you see it $50-$100 lower one day and for the umpteenth time, be proclaimed as “topped out” or “the bubble burst” as we’ve heard over and over again (yet rest assured the very journalists who wrote those stories will never ask their sources and/or themselves why were they so wrong for so long and instead simply say it all over again).

And with being wrong for years in mind, lets not forget with gold breaking above $1,700 we owe another dollar to the Tokyo Rose Relief Fund. Like World War II Rose, the ultimate gold perma-bear publishes daily propaganda. There’s no question that if you looked up nitwit in the dictionary, this Rose’s picture would be there.

U.S. Dollar – Terminally Ill

U.S. Bonds – The ultimate bubble that hopefully I will have the courage to short into.

Oil and Natural Gas – Bullish.

Please Note – I will do my best to stay on top of things during these violate days. For those who limit their reading to the daily email, note only the last 5 comments of mine will be shown in those email blasts. It’s always best to visit the blog itself.