MarketVVizard's Market Thoughts: Re:Market

» MarketVVizard - Re:Market

In response to message posted by azxcvbnm:

MarketWiz, I thought Gold's decline and the rise in the dollar were positive news for the stock market. Gold's sell off means the money is probably headed to bonds or stocks, and a stronger dollar will encourage foreign investment in our stock market. Am I wrong?

As I like to say, you don't know your right (or wrong) until you bet!

That said, I was stopped out of the QQQ short (basically break even) yesterday. Still short NVLS and it will probably be put to me over the weekend (around 3% profit).

I am planning to short the open today. My stop will be a bit higher this time, 1% above the 52 week high.

While at a glance you might think Gold down, dollar up is good for the market -- no, I do not believe this. Think about the last year -- market has been on fire while gold was going up and dollar down. Now you want to believe that a reversal will be good for the market? The biggest red light is merely the fact that "something different" is going on here. That and the fact that sectors are clearly looking "toppy". I'll admit I'm wrong when the market proves me wrong, by breaking out to new highs (which could happen today for all I know).

As Hussman said months ago, the revaluation of the Yuan could be disastrous to the US economy. I agree with this. The moves in gold and the dollar are cyclical in my opinion, we were LONG overdue for a pause, nothing goes straight up or straight down. Where is all the money going? Well its been POURING into treasuries recently. I now believe that trend will continue (more on this later - yes, I do believe lower rates ahead). I also believe that money will continue to dump into real estate and out of stocks in the coming year.

I will be posting later today some content from Marc Faber's book "Tomorrow's Gold" which I found interesting. He basically describes the 6 phases of an "emerging market" (one of my biggest beefs with Faber is his ambiguity and redefining of terms) which can very clearly be applied to the US markets at this time. More later...

-- posted by MarketVVizard