Macro Strategy

Post FOMC - rate cuts finished
1) Equity Bear Bias
2) Gold Bear Bias
3) Bond Bull Bias
4) USD Bear Bias
5) Oil Bear Bias

Remember the Iranian deadline at the UN 8/31/06....this is a timing point. The trends should reverse or profit taking should occur.

chris

Trying to correlate different markets and timing points is a hard task. Sometimes correlations fall apart or are delayed a day or two from a given market reaction.

Equities, the prospects for them arent that great, given the revenue scenarios projected out into the future.

Gold has been closely following world equity movements for the past few months. When equities sell off gold sells off.

Oil has been reacting to geopolitical events, and that seems to be the only buffer against a significant bear trade in it. This might snowball when the first two markets above collapse.

Usually when the american consumer becomes conservative, the balance of payments improve. The speculators in the market might use this as a trading idea or infectious mental thought process to create a bull trade in the USD. The probabilities are high with paulsons stint on the USD.

Bonds as they see the above scenarios playout, people will flock into them.

In a nutshell this is the 'world view' that seems to have evolved at this point.

Differentiations in mathematical correlations only break down when...correlations in markets lag...
This is to say your thought process looks correct but don't be surprised if the markets lag...or fail to catch on a given timepoint...