USD gains on cue. Metals --big sell off today. Bonds---selling off. Euro--- flat to selling. Anyone listening?
Don't fight the FED is often said. It is true. I believe that is typically correct but this time is not business as usual. The FED doesn't know where it goeth. For now I will continue to trade back and forth between cash and liquid assets--Ags spiked again. Metals spiked again. M & A plays. Schwab wrote an interesting op/ed in the WSJ re: long term interest rates and the carry trade. The market is no longer free to float. It is puppet stringed. But at some point the manipulation will have less effect. The duty at present is less about wealth accumulation and more about asset protection. Real asset protection, that is, how to preserve buying power in a simultaneous game of deflation/inflation where asset classes bubble up and pop as the money must flow somewhere but it is a fool's game to "invest for the longterm."
http://www.bloomberg.com/news/2010-...e-update1-.html Global markets are heading for an âimportant turning pointâ as interest rates begin to rise within about three months and the U.S. dollar gains, according to investor Marc Faber. âInstead of interest rates going down, they could start to go up, instead of the dollar being weak, it could strengthen,â Faber said. âIâm ultra-bearish on everything, but I believe youâll be better off owning shares than government bonds.â I am in the camp of short bonds not yet but beginning of 2011. I belive I said Late Winter 2010/2011 which is about 3 months. As for USD strength I say yes--again at first. Stocks up? Actually that makes sense too given there will be an exodus from bonds people don't want to hold cash and commodities have spiked although they could run further.
Divergences everywhere. My leading indicator went negative today..... Reset button coming. Flash type crash again. Imprinting has occurred with regard to market participants. That's why the divergences are occurring. Up to the elections it was risk on. Now it's risk off.