Monday, November 23, 2009

Short Stocks Long Gold may be the easiest trade

My recent re entry into Gold Miners is paying off handsomely today.

As mentioned I exited stocks late last week and took profits, that was timely.

I entered a very small position at the end of the day Friday.  That position is at a loss now but more than offset by my longs in the Gold Miners.

This week will likely be portrayed in a positive light because we need the lemmings to spend on Black Friday.

I have not had a chance to review the economic data.  Will be taking care of some business matters most of the week.  Letting the miners run for now with a hedged position in short equities.

Long Gold Short Equities is the easiest way to stay profitable in a hedged fashion.

That being said, it feels like classic distribution.  Financials are lagging, XHB lagging, transports are lagging, Russell 2000 is lagging, QQQQs have not made a new high.

The Dow which is easy to manipulate is at new highs and large caps are probably what is pulling the market.  Why? Foreign profits repatriated into cheap dollars equals good profits.

Bottom line? This is a rally on the legs of a cheap dollar.  If fundamentals were healthy, governments would not be lining up to purchase Gold.

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