As 2008 winds down and a new administration takes up residence in Washington, D.C.,
I want to give you five trading strategies that I believe are compelling trades
and are direct beneficiaries of the changes that are coming.

While no one can predict exactly when this market will bottom or when the economy
will recover, there’s still money to be made by savvy traders at a time when constant
change and volatility present unique, short-term trading opportunities.

As this year comes to a close, we have the chance to trade some big-league companies
that are priced like call options. It’s like having a perpetual call on a multi-billion
dollar generating company when its stock is trading for $5 at the bottom of a correction
or at a major transition point for the company itself.

It’s also a chance to ride short-term momentum up (or down) and get out with trading
profits while long-term investors continue to suffer in the ongoing financial meltdown.

So read on for 5 Red-Hot Trading Strategies to put to work as 2009
approaches.

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Close on the heels of the announcement of the first $700 billion bailout package,
Congress is ready to usher in the New Year with another stimulus package that will
probably be somewhere in the $1 trillion range.

It’s true. The Treasury Department is rapidly running out of cash earmarked to invest
in problem banks. Nearly one-third of the $700 billion (roughly $215 billion) that
Congress approved has already been spent on just 67 banks, a small fraction of the
1,800-plus financial firms seeking government assistance.

Because the global credit markets are still trying to stabilize, the dollar has
rallied strongly in the face of headlines that forecast the 24/7 schedule the Bureau
of Engraving and Printing is going to be keeping for 2009 as it produces some $2
trillion of fresh cash to fund the bailout that is about to get ever-wider if the
automakers are included.

Once confidence is restored in the bond markets and spreads on corporate bonds and
mortgages begin to narrow, the dollar will sell down and other foreign currencies
will rally. That said, I believe the time for shorting the dollar is now — greenback
is starting to waffle after a powerful five-month rally that started back in June.

I just have to believe that the dollar is going to rollover hard when the final
number comes in revealing how many trillions of new dollars are going to have to
be printed to throw at the credit crisis. This might be one of the really great
set up trades for 2009. I kid you not!

Trading Strategy:  Buy the PowerShares DB U.S. Dollar Bearish Fund (UDN)
or if you’re feeling real adventurous, buy the UDN March 25 Calls (UDNCE)
at market.

Assuming President-elect Obama gets his wish for Congress to pass a massive infrastructure
spending bill, it would behoove traders to buy a basket of calls on three of the
most-obvious winners of such a landmark spending package.

It will be hard to locate any dissention among either Republicans or Democrats about
a rebuilding of America’s dated infrastructure. Most feel strongly about passing
such a measure as soon as possible.

With so much bipartisan momentum building for such a piece of legislation, I recommend
buying out-of-the-money call options on what should be three big winners that are
all smack dab in the sweet spot of where the money will be allocated: Fluor
Corp. (FLR), Jacobs Engineering (JEC) and Caterpillar (CAT).

Both Fluor and Jacobs Engineering are two of the biggest engineering construction
firms in the U.S., and Caterpillar is the largest heavy earthmoving equipment maker
in the United States.

These three stocks have been hammered in the past year. Fluor hit $101 this past
June — today it’s $35. Jacobs Engineering touched $103 — today it, too, is at
$35 per share. Caterpillar topped out at $85 in May and now trades at $36.

Watch these stocks really move when sentiment turns positive. I would fully expect
that right after the Jan. 20 Inauguration Day celebration is over because the stage
will be set for a plethora of good news surrounding these companies.

Trading Strategy:  I recommend going long the
FLR April 45 Calls (FLRDI), the
JEC April 45 Calls (JECDI) and the
CAT May 40 Calls (CATEH) at market.

One of the biggest agenda items for 2009 is to wind down the number of troops in
Iraq and Afghanistan as promised by Obama in his campaign. However gradual the troop
withdrawal might be, it is my opinion that as personnel are pulled out, more unmanned
aircraft will be deployed as a way to add another layer of effective military capability
to offset the loss of ground troops.

It is my view that the Pentagon will increase budgets for unmanned aircraft as a
way to keep a strong presence from above, keeping soldiers and pilots out of harm’s
way. After such a contentious war in Iraq, voters want sharp reductions in headcount,
but they also want a military that is smart and utilizes more high technology to
do the fighting.

Enter AeroVironment Inc. (AVAV).

Building on a history of technological innovation, AVAV designs, develops, produces
and supports an advanced portfolio of unmanned aircraft systems (UAS) and efficient
electric energy systems. The company’s small UAS are used extensively by agencies
of the U.S. Department of Defense and increasingly by allied military services to
provide situational awareness to tactical operating units through reliable, real-time,
airborne reconnaissance, surveillance and target acquisition.

AeroVironment recently confirmed its 2009 outlook, forecasting 25% top-line growth
over 2008, with backlog increasing 31% in the current quarter. Shares of AVAV hit
an all-time high of $38.68 in early November, showing just what kind of bullish
relative strength the stock enjoys. Take a shot on this high flyer!

Trading Strategy:  Buy the
AVAV March 35 Calls (VQSCG) at market

Today’s newspapers are splashed with headlines of massive corporate layoffs that
could exceed 2 million jobs if the auto companies are allowed to fail or restructure.

I can only imagine the demand post-graduate schools are going to experience as hundreds
of thousands of unemployed workers pursue a new skill set in order to get back into
the job market as soon as possible. To that end, the post-grad education stocks
look like a great trade as a pure play on this very near-term trend.

DeVry Inc. (DV)
is the parent organization of DeVry University, Advanced Academics, Ross
University, Chamberlain College of Nursing, U.S. Education and Becker Professional
Review. DeVry University, which includes Keller Graduate School of Management, offers
associate, bachelor’s and master’s degree programs in technology, healthcare technology,
business and management. DeVry and its subsidiaries provide a buffet table of educational
offerings including nursing, healthcare and accounting, positioning the company
squarely in the sweet spot of a challenging job market.

Upon releasing earnings on Oct. 23, shares of DeVry gapped from $42 to $58 in four
days. Imagine the enrollment figures they will be coming out with in January following
this wave of newly unemployed professionals looking for a new career. The stock
retraced back down to $48 and has been trading sideways, setting up for another
big pop to the upside that I believe will again be triggered by monster earnings.

If you can pick up the DeVry May 60 Calls (DVEL) while the common
stock is trading at or under $50; that would be ideal. Assuming these guys throw
up some obscene numbers for the third quarter, I expect the stock to break out and
trade up to $75 — 20-points higher than its current price. At $75, the calls are
worth a triple just on intrinsic value alone.

Caution! This trade is HIGHLY speculative. If you
put this trade on for your own account, you have entered the no-mess-around-zone.
The thing with these post-grad education stocks is that they all act similarly.
They either skyrocket for a few weeks or flame out like a Roman candle. Take a partial
position with this puppy, but take a position. It could be the canary in the coal
mine for Christmas.

Trading Strategy:  Buy the DV May 60 Calls (DVEL) at market

OK, now for the fun part of market bottoms, picking the low-hanging fruit that has
the makings of five- and 10-baggers.

As the year comes to close, fund managers will be removing all the losers they were
praying would recover by year-end from their portfolios. As reality sets in that
they are wearing well-known stocks down 70%-80%, they will panic and liquidate these
positions by Dec. 31 so they don’t have to show them on the books.

This is where opportunity lies. With every major correction — the ones that come
alone every 10 years or so — some great companies in leading industries get blown
out because they are leveraged to a vital global economy. It makes perfect sense
then that several Fortune 500 companies, doing billions in revenues, now trading
under $5 would be worth accumulating in order to sell these same names at $15-$20
when the market turns back up next year.

This is how the smart money makes big money. Buy big positions in well-known leaders
in their sectors and NYSE-listed names where the stocks are down by 70%-90% from
their pre-Beijing Olympics highs. But let me tell you, as a professional trader
with more than 24 years experience, time and time again I’ve kicked myself for not
taking many more big positions in sub-$5 names.

After screening literally hundreds of stocks, I wanted to circle the wagons around
three stocks that I believe will have the best chance to provide you with a five-fold
return during the next 18-24 months. That’s about the length of time it takes for
these kinds of multi-national companies to come back to life and light up the world.
But this is where the legendary investors have all made their fortunes.

Trading Strategy:  Read on to find the three stocks I believe will return
your money three- to five-times over in 12-18 months

Cosan Ltd. (CZZ)is
the largest processor of sugar in Brazil and for that matter the Western hemisphere.
As most of us know by now, Brazil, and specifically Cosan are lobbying the United
States hard to the to allow favorable terms for the import of Brazilian sugar, and
for good reason.

There is a lot of negative sentiment directed towards the ethanol industry. But
proponents of the alternative energy plays like wind, nuclear, biomass and solar
are still cost prohibitive. If you had to pick one ethanol company, why not go with
the largest exporter with a superior crop to that of corn and make a play on the
rebound in sugar prices sometime in the next couple of years.

Currently, shares of Cosan Ltd. (CZZ) are trading at $2.50 per
share, with the company generating about $600 million in revenues. The stock traded
as high as $16 back in March of this year when oil prices started firming up. Sugar
is a world mainstay commodity, and CZZ is the leading name that will attract traders
looking to bottom fish the commodity sector during the current recession. Needless
to say a move back to $15 is a five-bagger. What’s not to love?

Recommendation:  Buy Cosan Ltd (CZZ)
at market.

The next multi-bagger, in my humble view, is DryShips (DRYS),one
of the leading dry bulk shipping companies traded. This company was completely exposed
to the spot market, where prices shift every day, and thus, was taken down when
the Baltic Dry Bulk Index (BDI) broke down this past June.

Prior to July, day rates for shipping iron ore, fertilizer, cement, grains and coal
to China were up to $90,000 per day. Today, the spot market BDI day rate is about
$7,000 per day. That’s not a typo.

Rates have crashed and the stocks within the industry have been taken to the woodshed.
Shares of DRYS have cratered from $115 this past July to today’s price of $4.50
per share. That’s not a typo, either.

The company owns and operates 38 vessels and has $1.6 billion in liquid cash and
cash equivalents. They will make the turn and it’s important that we make the turn
with them as investors in the common stock. Who knows where this stock could trade
back up to when China’s market recovers.

Recommendation:  Buy Dry Ships (DRYS)
at market.

It seems almost incredible that one of America’s truly great companies is trading
at its current price of under $6 per share after hitting $51 a year ago. I’m talking
about the Manitowoc Company (MTW),
a diversified, multi-industry, capital goods manufacturer with 104 manufacturing
and service facilities in 22 countries. It is recognized as one of the world’s largest
providers of lifting equipment for the global construction industry, including lattice-boom
cranes, tower cranes, mobile telescopic cranes and boom trucks.

Manitowoc also is one of the world’s leading innovators and manufacturers of commercial
foodservice equipment serving the ice, beverage, refrigeration, food prep and cooking
needs of restaurants, convenience stores, hotels, healthcare and institutional applications.
In addition, the company is a leading provider of shipbuilding, ship repair and
conversion services for government, military and commercial customers throughout
the U.S. maritime industry.

Excuse me, but the stock is trading at 2.6 times earnings. (And that’s not a typo.)
These guys are going to earn $2-$3 per share during the worst of times. I think
this is a spring-loaded blue-chip company that will be an ultra home run when bullish
sentiment returns. The company generates $4.5 billion in revenues with total debt
of only $247 million. I’m looking to fund part of my retirement with this stock.
I hope you do the same.

Recommendation:  Buy Manitowoc Company (MTW)
at market.

And the last, but not least is Yamana Gold (AUY),
a gold producer based in Toronto, Canada. The company engages in the acquisition,
exploration, development and operation of gold properties. The company also focuses
on copper and silver projects. It holds gold production, gold development stage,
and exploration stage properties, as well as land positions in Brazil, Argentina,
Chile, Mexico, Central America and the United States.

The company carries a market cap of $3.5 billion, has annual revenues of $1.1 billion
and is seeing excellent top-line growth. With the price of gold well off its highs
and the dollar looking like it might tank next year, shares of AUY, now trading
at $5, have a serious shot at trading back up to their March high of $19 if gold
makes another run to $1,000 per ounce.

Gold prices found significant long-term support at $700 per ounce, rebounding dramatically
back up to $800 in a matter of days. I would want to try to pick up shares of Yamana
Gold (AUY) when gold prices dip back down to at least the $750 level, a very probable
event given the amount of Fed stimulus being thrown at the credit crisis.

But at $750 per ounce, shares of AUY will be trading to around $4.50, a major multi-year
technical support level, where I would be an in-line buyer. That’s Wall Street jargon
for "back up the truck." If you want a dollar hedge, this gold miner is
just the ticket.

Bonus Recommendation:  Buy Yamana Gold (AUY)
at market.

So there you go—my five-point, year-end trading strategy to put to work as
2009 approaches.

Pick you spots well, use down days to put on trades, show some patience and enjoy
the fact that you are buying these big-league companies that are priced like call
options. It’s like having a perpetual call on a multi-billion dollar generating
company when its stock is trading at $5 at the bottom of a correction or at a major
transition point for the company itself, like in the case of Manitowoc.

It’s exciting and a path we can use to recuperate from the heavy losses most of
us incurred during the past year. Now it’s up to you to take action and make this
strategy pay off for you.

Good luck trading.

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