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Thoughts On The Markets & Where We’re Going Here…

11 August 2010 2 Comments

Ok, the market had a big down day today.  I’ve been saying that for stocks to rally, the Fed needed to drop a nuclear bomb on the economy and really open up the printing press engine.  They opened it up but only a little bit.  As such, the markets tanked today.  Ok, we got that.  What next.

If the market moves to correct here which is a very real possibility, we need to know what to do with it.

First, you should have some of your long portfolio hedged.  I own a few shorts (short XHB & AMZN) and own SDS which is a double-inverse S&P ETF.  Ok, check.

Next, what about moving forward?  How about gold?  Here’s my position… the U.S. will not and cannot pay back its debts.  Same goes for many European countries.  It’s a reality that more and more people are accepting.  Furthermore, I think the latest Fed announcement was just a small step towards a larger QE program to be announced post-elections and maybe early 2011.  More QE is coming.  It has to otherwise the system collapses and everything of the last couple years has been for naught.  So, the future for gold is very bullish in my opinion.

If we get a correction in the markets including commodities and gold (like we did today), consider adding to your gold stashes – this includes gold stocks.  I own GDX, CEF, SLV.

2 Comments »

  • Marco said:

    Hello,
    I've been reading your blog for few months but I wasn't sure where to ask this question. Have you ever plaid Forad?