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Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (October 6th):

The call for this week: Well, we arrived at the office at 5:30 a.m. [on Monday] only to see the S&P 500 preopening futures down 33 points amid news out of Europe of an expanding banking/credit crisis. Monday morning’s swoon comes on the back of Friday’s Flop, which turned out to be yet another Dow Theory “sell signal” like the one we wrote about last November.

Meanwhile, the three-month Libor/OIS-spread is at 295 bp “wide” and with the U.S., as well as Europe, going into a recession the environment is pretty dour. However, things “felt” equally dour post 9/11/01, yet the S&P 500 (SPX/1099.23) bottomed and rallied 24% over the following three months. Consequently, once again I think we are approaching a downside inflection point; and, trading accounts should conduct themselves accordingly.

More conservative accounts might wish to consider some of the closed-end funds eviscerated by this month’s hedge fund liquidation like: BlackRock Strategic Dividend (NYSE:BDT); BlackRock Enhanced Dividend Achievers (NYSE:BDJ); and Eaton Vance Tax-Advantaged Global Dividend Income (NYSE:ETG), all of which have blue-chip portfolios with yields; and, all of which are selling at substantial discounts to net asset value [NAV]. Clearly, these recommendations are like buying the indices at a substantial discount, as well as in keeping with our dividend theme. As for this week, it’s kiss and tell time.