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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (283)	2/19/2004 7:22:05 PM
From: yard_man	Read Replies (6) \| Respond to of 116555

everybody I read thinks that we have started a big counter-trend rally in the dollar -- same story every time we bump. Also, he is in the consensus on being bearish on bonds -- he saw a little uptick in rates for a minute and has his mouth-watering for a turn there. It's consensus for most bears/bulls alike. He is right that a sustained bounce in the dollar would obviate the need for foreign purchase of treasuries. heck, anyone can recognize that pattern -- there's no great insight there. The question is -- where's the impetus for a sustained rally in the buck. Improving balance of trade?? Improving jobs picture?? I don't get it -- everyone is just talking about all the dollar bears -- it is a myth -- all I've seen is tons of bottom pickers getting their heads handed to them -- now we have another batch lined up, it appears. I think far and away this kind of a statement below is consensus -- regarding gold, dollar and the market -- he believes golds is essentially a "dollar inverse" trade: >>and give the cocky "longs" some headaches. It won't take many days like today before declining Treasury prices and rising yields prompt some traders to unwind their positions, as they fear that the Fed might finally be losing its power to keep rates so artificially low. Once we see the 10-year Note's yield move back up toward its 4.5-4.6% peak of last year with some conviction, this selling would also begin to feed on itself. By that time, most everything that has risen in recent months will be bending more noticeably as well. I need to stress here the word EVERYTHING. Just as gold and gold shares, for instance, have generally been carried higher by the same factors that have carried stocks higher generally so, too, will they suffer once the overall market corrects. "Gold bugs" who think that a fall on Wall Street must somehow automatically result in precious metals rising will find out the hard way that they won't. Other commodities and commodity-related stocks will also be vulnerable for a while, though a few-chiefly, in my opinion, in the energy area-may prove fairly immune. << I'll tell you what I think -- 4.5 or 4.6 on ten year won't be seen for a long, long time. That is not consensus -- that is contrarian -- except for Mish here -- you won't find very many on the threads who wouldn't laugh at that. I also think that gold isn't going to be pummelled and the USD isn't going to enter a long term correction of it's current downtrend. I remain long mining shares ...