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Where should a bet be placed?
Buying is easy, selling is hard. Today, however, the situation is reversed. Last week I was stopped out on a gold play, and today I am very happy the stop kicked in as we see gold getting hammered. The reason this is important is that portfolio managers tend to load up on stocks when gold sells off because there is the perception of less risk. This says nothing about the overall economic situation we are in. Part of the issue investors have, opposed to speculators, is that the news does not always match the markets movements. Only a month ago a person told me they saw no reason to own stocks. I agreed, but that idea was based on the news, not the price action of the stock market, which was oversold at the time. So, while I think we are in for a tough earnings season, the economy is still in the crapper, and the government is on shaky ground, we can go higher. My best guess, gun to my head, is that we pause now, peak out by April option expiration date, and then start to slide. Keep in mind that the next two weeks is not about being right about this rally, it is real, but how the charts will form. I am unconcerned about being right about sliding in late April. In fact, my feelings are irrelevant. Making money is the only goal. This is why I am focused on short term trading until we get further along in April. Only then will we get a clearer picture of how the summer months will fare.
Lee Eugene Munson and Patrick Kirts comment on the U.S. currency. Published on Seeking Alpha
I don’t quite remember when, sometime in the past year, I first began hearing average people say that the government ultimately has the power to fix the economy, because it can just ‘print money,’ but, in a few short months, the sentiment has become commonplace. It boggles the mind, but it now seems to be a truth commonly accepted by just about everyone–politicians, journalists, investors–even the man in the street. At Portfolio Asset Management this change in sentiment has altered part of our investing strategy. Gold is now back on the menu along with shorting treasuries. Alternative assets have gone to the top of our list of potential funds and the bond funds we hold are under tremendous scrutiny. The bottom line is that we are under fire–not by the market itself, but by the government policy of debasing the currency. Few are vigilant and the delay in the market reacting to the changes may take time. Meaning, some sound strategies may not work even though a rational investor would say otherwise.
Read the full article here.
