This week, after the Japanese yen had surged to a fifteen-year high against the US dollar, the Japanese government decided to intervene in the foreign exchange market. To great fanfare, the Bank of Japan initiated a vigorous campaign to buy US dollars, thereby stemming the rise of the yen and pulling up the greenback. The effects were immediate, with the yen falling an astonishing 3% on the day of the announcement.
Many commodity traders are familiar with the question of whether a stock or commodity has broken out for “real” or not. In other words, when making a new high for the first time, many speculators are unsure if the trend will continue.
Diversification is the one of the ways to reduce risk, or so we learned. While a properly diversified portfolio might reduce your risk of loss, it also lowers the chance you have to achieve market-beating returns. If you are a value investor, you find that your approach already reduces your risk of loss without having to resort to various diversification schemes.
Last week the government released the latest unemployment data. Bloomberg, always ready to roll up the sleeves to help its friends in government (get reelected), was running a headline that “Companies in U.S. Added 67,000 Jobs in August.”
Gold is at a new record high, and there’s a lot of talk about it being time to take profits, to expect a serious decline, in fact the end of its 10-year bull market. Gold is up 16% so far this year. If it ends up for the year it will be its 10th straight year of gains, and the longest bull market for gold since 1920. So yes, by that measurement gold’s bull market is aged.
In an era of economic weakness and concern over the cost and environmental consequences of petroleum-based fuel, the promise of electric vehicles has attracted a lot of attention from both investors as well as analysts and companies seeking to enter the sector.
A common flaw that we see the average investor make is to follow their investments measured in foreign currencies and at the same time forget to calculate their local exchange rate on those investments. This is a HUGE mistake as the fluctuation of an investor’s home currency has a massive impact on their returns.
According to some experts the U.S. economy is one “event” away from a catastrophic sequence. My own variation on this sequence goes something like this: first, the dollar collapses; second, the government’s response prevents any chance for recovery; third, political unrest and destabilization begins; last, the defensive function of the state fails as external and internal enemies take advantage of the country’s weakness. This sequence would likely be nonsense if it were only my sequence.
Most market observers believe a break above 1,130 is unlikely based on (a) weak volume and (b) strong trading range resistance just a few points above us. We share those concerns. However, we must be prepared for a possible break above 1,130 over the next week or so based on a clear improvement in the market’s technicals (charts and indicators) and recent economic data (weak but not projecting a double-dip).
Let me be upfront: I hate gold (and silver). Hoarding isn’t beneficial to anyone. Yet my faith has been put in 5 G’s: G(religious edit)d, Gold, Guns & Grub. Having absolute faith in the 5th G - (the Government will continue to screw it up) is why I can have faith in the other four. Today I stumbled upon a colossal moron whose website clearly underscores the 5th G.
