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Wednesday, September 2, 2009

It is official: Cash is King

(Wrote 9/1, should have published then, would have looked like a genius :) )
Blogger Mish has an excellent blog entry on US currency, stock market, and commodity moves for the next year or two. In this market rally since March, you can correlate the market rise with dollar devaluation. It has been mentioned that the USD was coming dangerously close to a collapse area, but it didn't reach those levels. If the USD doesn't go down, that leave up.

A strengthening dollar typically (nothing is certain in life) means US equities will decline, and so will natural resources. I highly recommend reading Mish's blog entry about USD and gold. John Chinnock and myself (I mention John a lot, since he is the brains of this blog), are bearish on gold right now. John to his credit picked the EXCACT top of gold miners, GDX 44 to sell. Unfortunately for him, I talked him out of it, but he got out a good price later, I think 40-41. I joined him by dumping gold miners and taking it off my recommendation list. Gold can, and likely will move higher before it's decent, GDX may rise above 44 in near term. But I expect it to go much lower subsequently, and don't want to gamble all these "if's".

So read mish's blog entry and watch this video, form your own opinions. But your opinion is wrong unless it matches ours. ;)

The key to success is to have vision based upon current information, and to be flexible enough to change your view with new information. To read more on Elliot Wave analysis from Robert Prechter Jr., click here:

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