To everything - turn, turn, turn
There is a season - turn, turn, turn

-The Byrds

It is time to go short again.

The market has been inching higher on light volume.  Yesterday’s sell off is an ominous sign.  It is a tell for tomorrow’s economic numbers.  They will not be good.

It is time to ride the next wave lower.  I said I’d let you know when.  It’s time.

Peace

Today, I took a break from the office and did an open water swim with some pals.
Happy New Year to all.
Peace.

Swimming with Sharks

The US Dollar is breaking down and gold is acting strong. I will continue to benefit from my weak dollar, strong gold thesis. The Dow Jones US Real Estate Index (IYR) is rallying. This is very opportunistic.

At some point the (IYR) is going to be a massive short, again. I do not think that point in time has come. I wonder how much retracement we will see in the trend?

Nature’s math is evident in all places. Especially markets.

Peace

Click to Enlarge

Let’s take a look at the current relationship that the dollar has with the U.S. Equity market.
As you can see it is inverse. Dollar up = stocks down.

spx-vs-dollar

How is this relationship going to look moving forward. In other words, tell me about the future.

While not a psychologist, I do have some experience with markets. And my experience tells me that this relationship has to change. It has no choice. It will roll in ecstasy into my bankroll. What we are staring at here is deep into the eyes of volatility.

The decoupling of this relationship is going to happen. We are no longer going to see the dollar rally as stocks go down. We are going to see the dollar decline as stocks go down. If you don’t believe me, allow me to elaborate with a picture. From our history. Take a look at the chart below. This is what the relationship is going to look like. The dollar and stocks will no longer have an inverse relationship. Position yourself accordingly.

Nothing changes in the markets. Just the participants.

usd-vs-spx02

Until we meet again….I’m back. Back in the New York groove.

Peace

The fiat currency system has tipped to the point of no return. With this knowledge of the underlying probabilities, I am now positioned to hit it big. When the tipping point in volatility hits in Gold, you are going to see calls in the yellow metal zoom out so fast you’ll be sittin’ there sayin’, geez I wish I owned gold, or I wish I was short the dollar or I wish I was short treasuries or I wish I was long Swiss Francs.

To hit a volatility move right, you have to be positioned before everyone else HAS TO BE. I feel this one strong. No one has to own gold….YET. Watch what happens when they do. The insane is about to get insaner. And you know Mr. Volatility likes it when markets get insaner. Insanity in markets leads to percent gains that are exponential in function. And the exponential function is the best friend of a volatilist.

This will be dubbed the gold bubble in the media. But it won’t be a bubble at all. It will be a return to normalcy. Put on your seat belt. This ride is just gettin’ started. And a wild one it will be, through the eyes of Mr. Volatility.

Peace