What I am looking at this week

What I am looking at this week

As I talked about last week Gold is due for a rally. I think that it has temporarily bottomed and I am still in my position although I did take some off the table on the powerful rally that I called when I placed the trade. I have added to that position as I still believe that we are due for a powerful rally in the near future to the upside. From here I will risk a long in the EUR/USD too. I think it is a good spot for it. If the Dollar is going to take a breather at the moment I think that it will be in this area. It seems to have peaked out for the moment at the 102.00 area and may dip back into the 98 area. You see the Dollar has very negative deflationary effects and I think its ascent will try to be controlled or we could see serious problems starting in the US economy. Much more serious than are presently there. We may see a bit of a sideways movement for a bit until things stabilize.
   This is why and the only reason why I see Gold moving up along with the EURO. Forget all that hogwash you read most of the time. It is basically nonsense. If the Dollar rises Gold falls it is that simple. The Gold boom of the early 2000's was not magical event. It happened as the Dollar fell and fell hard. Same with most commodities as measured by the CRB index.
      Its not rocket science folks. When one rises the other falls. It is that simple and vice versa. Yes some short term opportunities present themselves in terms of short bursts of movement but if the long term trend is dictating a strong Dollar you can forget about any serious commodity booms as there is nothing momentum wise to sustain them.
       If you understand what I am saying here then you might wish to short the USD/YEN at this point looking for a pull back or simply wait for the uptrend to resume. That won't likely be for a few weeks.
      I still am in the camp of deflationists because of the debt. However there are opportunities around the globe where inflationary effects are happening. Everyone keeps expecting the real estate global bubble to explode and it keeps defying the odds. I have been wrong here too and as a result am riding the trend versus fighting it. Cheers!