Over the last few months or so I have become a little disturbed about the market. Europe his dire news all the time, the lack of US job growth, increasing housing defaults, increasing poverty, very large bankruptcies through fraud ( MF Global, top 10 of all time ) and other bad news.
Ignoring the press, the spin, the bloggers, everyone there are a few facts you can't ignore.
Price of gas remains high, price of gold has remained relatively strong, and other natural resource prices are not collapsing. And through this the US dollar has NOT risen like a rocket. Sure, it has gone back up compared to other currencies, but not nearly what I would have expected. After all, the news is focused on destabilization of the euro.
Throw in the market has shrugged all of this off.....what does it tell you?
My gut is telling me we maybe seeing the initial effects of monetary inflation, in a deflationary economy. And in such an environment, we'll see very odd stuff. I can't imagine being short in this environment, nor long, except natural resources.
For now I am continuing to try to sit tight, and wait for Thanksgiving weekend. Remember, congress has to come to terms with the government budget. Expect disappointment, and a possible US dollar decline. If the dollar does decline, we may see a nice market rally, contrary to popular thought.
AVL got some strength earlier in the week. Gold and silver look good, and of course gold miners.
Good luck, its an impossible scenario no matter what you chose.
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