Tuesday, October 20, 2009

Market mayhem...

So, when does Gold hit $2500? When does the stock market hit 25,000?

And, when does the US Dollar hit 10% of its current value?

There is a direct correlation between all.

It's interesting, I am asked literally every day about GOLD now. I used to never get asked that. When I called GOLD to $400 when it was low $200s, then $500 when it hit $400 and then $1000 from there, no one really cared to even think about it. At the time I had bought 100 ounces of Gold in the $200s. Obviously I wish I had bought 1000 ounces, but isn't that always the case?

I am recommending Real Estate now. I don't own much, mind you, but I think its worthwhile to own some if you are an investor now. I didn't feel that way until recently as most of you know, but with the dollar cratering eventually hard assets have to go up and Real estate is definately a hard asset.

Having said that, I expect the Fed to make a stand for the dollar like they used to do with the Yen when Japan had all its issues a few years ago. Other countries that have US debt (read CHINA) aren't going to let the dollar just up and die and become worthless so fast. Eventually? They may not have a choice, but for now? No shot.

The setup that the government is fatally flawed. If you devalue the dollar you increase the stock market which further seperates the "haves" for the "have nots", the distinction becomes even more apparent. You are rewarding the very people and institutions that have brought this country to the verge of civil unrest, and insolvency. It's so insane it would make Machavelli smile and give everyone at the big brokerages and banks high fives.

Most people in this country are not invested in the stock market in any kind of real way. The people who are are the rich. Did you notice how nervous both houses were when the stock market cratered last year? I mean, do ya think it had anything to do with their net worth, or they really gave crap about the common folk? Hmmm.

Yeah,I know I'm jaded, sucks. But, its unfortunately the way it is. It's reality. I wish it weren't so. Same as I wish the Mets didn't suck so bad and they were actually the Yankees. That would be really cool, and really a fantasy that can't ever happen.

The falling dollar hurts everyone except those that have enough to weather it. They can then swoop in and further destroy the class(es) economically below them by buying up all the land and then charging them more to rent it out from them. It's very disturbing. So much so that even someone with a couple mil needs to worry. The term millionaire used to have some meaning, now it just means middle class.

The market has to go up as long as the dollar weakens. It is now officially pegged to the dollar. It'll be interesting to see what WFC and MS do post earnings tomorrow.

I would watch DRYS here as well. That sector is a notable laggard and it will have to get going if we are going to get another leg higher. I'm unsure here, this market is very schizoid. I like trading it intraday, but swinging stuff other then a couple earnings plays is difficult to do. AAPL on a break and hold over $200 mid-day should lead it over $204 and there it becomes blue skies breakout city and $225 may be next stop. I am not long it, no shot, just observing. I wasn't there for most of the wedding, I don't want to be there if it dies and has a funeral. I've sat Shiva enough the last year, trust me.

In the meantime, let's see what shakes out, earnings are still working. Watch EBAY with YAHOO's move it should get some momo into its own earnings if YHOO holds up, which is a big if, but it very well may.

I'm also eyeing the casino's for a reentry on LVS. I'd love $15 as a entry, we'll see soon enough as the market tips its hand!



1 comment:

Jim Murphy said...

I let the news on Microsoft shake me out of some calls today. Still made a little on them, however, it caused a question to come to my mind to ask you, "Do you have any rules, for knowing when to listen to the news and when to ignore it?" I may decide to go back in this morning, if the market gaps down lower but may have missed some on the position trying to preserve capital. I'd appreciate your thoughts on this subject, since the last hours trading in Microsoft proved me wrong to sell out. Thanks, murf