Once again, love to see some response to this article...
Agreed Navin...
I think it will be worse than 29... but thats just me!
If US stock market crashes I guess the Dollar also gonna take a beating hey...
If we make the assumption that the retrenchment of the consumer has been significantly underestimated, then equities are massively overvalued and at some point are likely to sell off aggressively.
bbaker says what I had so far considered to be the likely outcome - out of risk, dollar index up. But also it depends as digger1 says, on what happens with those USD which are liberated from equities, and sure enough gold is going to be in big demand, at least by the retail hordes who are being cajoled into thinking gold is the only asset you can buy which is safe. Gold will be a bubble all of its own, IMHO. Institutions will be more savvy and I'm inclined to agree there will be a general move into commodities, (which will be inflationary, putting further pressure on the consumer, presumably?).
On the GBP side, I believe, as a resident and national of this rainy island, that recent results are over positive and do not reflect the true state of affairs. I think our new government is doing a great job, but they're dealing with a similar mess - too much debt, by government and by consumers, and I don't think consumers here have changed their mentality significantly yet. Once figures start to head down, it seems to me that GU will be hit from both sides - USD strengthening through increased flight-from-risk and GBP weakening through poorer results.
My strategy is currently to hunt for decent GU shorts to hold over the longer term, and play short moves only on the daily (simply because I can't hold opposing positions in the same instrument with my broker - which for those who don't know is called "Hedging"
). If this beast breaks, I want to be holding as large a position as I can stomach from a nice comfy place up high.Edit: I see the words "I believe" above, and I know this goes against the daytraders mantra of "trade what you see, not what you feel". But there is room for the discussion of fundamentals and longer term trades - I apologise if this is not the right place for it.
"Sell? Sell? No! I can't Sell! I'll Sell When I'm Dead"
