Between Now and 2017
Until the events of yesterday and today I held hope that the current portion of the 17.6 year long cycle (2000 to 2017) had seen its stock market low in 2009. That is no longer the case. As an investor I now have to figure out how cute I want to get in my investment strategies over the coming six years.
For stocks the easy approach is to be short and wait for the S&P to drop to 333, who knows what the number will be for sure, but why not half of 666, the 2009 low.
On gold the easy approach will to be long until it gets to $ 3000 an ounce and get out, this will be a hyper fear trade, don’t even talk supply and demand and how many bracelets are being made in India.
For the dollar index, the easy approach is to be short until it hits 24, it is 76 now.
For commodities, supply and demand rules, but a 333 S&P will not be conducive to $ 85 oil.
For bonds, who knows, as they and interest rates are at the center of the whole scenario, it might be best to stay out of them and watch them as the big red indicator from which to time all your other investments.
With all that said there are going to be a lot of short-term moves before we come to the big stake in the ground, the Fed’s June 30 2011 date for completion of QE2. No doubt QE3 and QE4 and QE5 will come on some unannounced schedule after, probably on July 1, 2011, July 2, 2011, July 3, 2011.
So the cute period of trading will probably extend for up to eight months and we will talk about short term positions we are carrying during that period. There will be periods no doubt when short-term signals will be opposite the long-term objectives mentioned earlier in this post. More on that in the coming days.
At the moment our short-term technical systems are long stocks, commodities and short-term interest rates, neutral gold and the dollar, and short T-Bonds. Keep in mind that many of the bullish positions are long in the tooth as they were generated on September 1st based on the QE2 pre -announcement and are in resistance areas.
The 18 ETF Technical signals we track are currently:
Long : DBA,MOO,USO,QQQQ,SPY,SMH,XLY,IYR,IEV,IEF,SHY
Neutral : FXE,FXY,FXI,GLD,UUP,XLF
Short : TLT