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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (50479)	5/26/2004 3:56:43 AM
From: macavity	Read Replies (1) \| Respond to of 74559

There are 2 paths (at least). These are long-term (> 8 years) and well beyond most timescales, but you can see them in long-term charts. 1) DowJones/GoldRatio - defines 16-24yr swings between risky financial and non-financial assets. 2) Quarterly charts and TrendOscillators of the Dow Jones and the $SPX. The Deflation Trade is the minority trade - that is all. The Majority - the Inflationistas - could well be right here. We need to take out $AU=435 to convince me that inflation is here. 30Y bonds have already taken out 5.5% EURUSD should then slice through 1.30 like butter. My issue is this. If it really were all about inflation then the performance of Gold would be better than those of other Currencies (unless they are better than Gold). Right now I am seeing 'more' weakness in Gold than in Currencies. It could be merely 'more' speculative froth coming off, but I am keeping my eyes on it. Gold in JPY and EUR is really not that impressive. I could imagine a decline here in the $USD dollar index - followed by a more substantial rally to the $USD=98-100 area (a 38% retracement). I trade the intermediate term - roughly the 21 and 55 day moving averages, so my long-term views are irrelevant to my trading actions. I am currently Long EUR and Short USD and looking to add-to -macavity