Monday, July 18, 2011

Gold and bonds and currencies

Three charts:


The US Dollar, the Euro, and Gold.
The USD and the Euro trade inversely. It used to be that when the USD was weak gold went up, and when the USD was strong gold went down. Now it doesn't seem to matter. When the Euro is weak, gold goes up, and when the Euro is strong gold goes up. I think that the world is losing faith in both of these currencies. Imagine a true flight out of either! Where would you go? The Swiss franc is doing well.... As are gold and silver...
Even the safe haven of US Treasurys are not such a safe haven. Particularly because they are denominated in US Dollars.
GLD was an easy buy as it cleared 152.

Lately the 10 yr Treasury is losing ground, even as the stock indexes lose ground.
So I have picked a place to put a bottom in TBT, which is the long only way to short the US 10yr Treasury Note.
A small position here, risked to new lows, add if we clear those recent highs at about 35... Notice how the volume has stayed high as the price went sideways. Quite often this is the sign of a trend reversal...
Control risk!

No comments:

Post a Comment

All comments are appreciated as it will give me a chance to adjust my content to any real people who may be out there. Thank you. gh