7-15-2011 Market Timing Brief™

7-11-2011 Brief:
1. Gold is up 0.08% at the moment with silver up only 0.08% (pre-open).  The US dollar index(UUP) is up MORE than either at 1.17% from the close Friday.  This means the pecking order is: Dollar Index > US dollars > Gold > Silver. (update: SLV is now DOWN 0.17% making my point – today silver is NOT as good as dollars; gold IS better than regular dollars, but not quite as good as betting against other currencies (UUP)).   Remember that the UUP represents a bet against a basket of currencies with the Euro representing a big chunk of that. Also remember my previous warning that gold will weaken as well if the dollar becomes too strong, too fast. Gold buying and dollar buying counteract each other in the price of gold as I’ve explained. If you are a European, you want to own gold for sure in my opinion. The Euro has major issues today with worries about the big one, Italy.

2. The EURO is down 1.44% (FXE) this morning with, as I said, the UUP up 1.17% in the midst of new Euro Worries.  The European panic scenario is in full force this morning.  Please subscribe to my blog and read the free PDF so you know what this means (use link below).  It can make you money.  This scenario being in force means that stocks are down with the SPY down 1.18%.

3. We had an island reversal in the SPYs which is very Bearish.  This may be a good place to start lightening up or selling and rebuying higher.  Read my “Passive Shorting” page if you don’t know the steps involved: Passive Shorting .  The key is to rebuy higher if necessary or near your exit point if you like if the market does NOT in fact break down here.  Yes, there is that risk of course.  The Bulls were not ready to “Give it up” on Friday with some indices like the REITs barely down for the day at the close.  I will have a video on the SPX up later today.  You will get it today only if you are a free subscriber, so please sign up here:  Free Market Tracking Newsletter

4. Bonds are rallying again because of the flight out of stocks.  Continue to watch interest rates and consider averaging out of bond funds if rates back up substantially.  Many investors are going to be shocked at how much they can lose on bond funds when they’ve had great gains over the past few years.  Just look at the 10 year Treasury chart back in 2007-2008 and you’ll see the risks.  Owning individual bonds is better, because at least there you can hold to maturity.  Your risk is interest rate risk.

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