Bazaar Outlook: Oil, Gold and Stocks

Bazaar Outlook: Oil, Gold and Stocks 

 

The U.S. broader bazaar indexes accept pushed to new 2012 highs over the accomplished two trading sessions. Along with the disinterestedness move higher; gold, argent and oil accept all followed suit. A accumulated of perceived European bread-and-butter adherence and added Federal Reserve bond-buying accept delivered a 10% acceleration in equities, a 25% acceleration in WTI oil, and (gasp) a 27% access in argent bulk over the accomplished two months.

One accept to dig alone hardly below the apparent to apprehend this multi-month ample rally, now dubbed "the a lot of hated rally" on CNBC, is based on annihilation but a achievement and a prayer. In the aggregate, accumulated balance alone exhausted negatively-revised estimates by the aforementioned bulk they accept historically. Oil appeal has been always declining, and China and Indian axial banks accept eased their gold affairs operations.

Overall, appeal for investment-grade cars continues to decline, both in the U.S. and worldwide. For investors gluttonous a altar in gold or European or U.S. equities, the six-month angle is not promising. Now, acting advancement moves are abiding to occur, but "buying and holding" in this bread-and-butter altitude is not prudent.

It seems added and added acceptable that the U.S. Federal Reserve will apparatus addition annular of bond-buying (QE3); however, there is still no adumbration that U.S. budgetary issues are any afterpiece to getting bound than they were at this time in 2011. Until there is aldermanic movement on the Federal akin by the Congress to agreement a growth-promoting bread-and-butter climate, our problems will continue, and get worse. One accept to attending no added than the apathetic account job advance through the summer.

So, what's the move? Well, as abundant in "An Ounce of Gold will be $800... " there are several strategies that may prove assisting over the next six months:

First, abbreviate silver. At its accustomed bulk of about $34/ounce, the "poor man's gold" is in fact just the sucker's gold. Argent is an automated metal, and even admitting it has been advised a barrier adjoin aggrandizement and abundance of value, it absolutely is just an big-ticket automated metal. Attending for a 50% move down in silver.

Second, advertise gold. I don't like shorting gold because it is an internationally accustomed abundance of value, and a accurate barrier adjoin inflation, but at these balloon prices, gold is abundant too big-ticket to buy at these levels. I'll delay until sub $1000.

Third, abbreviate U.S. stocks. Unlike European equities, abounding U.S. banal valuations accept captivated up and even soared over the accomplished six months. The angle that European problems can be abandoned to Europe is absurd.

Right now, Europe is off the radar, as the ECB has said they will buy an "unlimited bulk of Spanish and Italian bonds." The botheration with this strategy, abundant like in the U.S., is budgetary action cannot actual budgetary issues!

Fall 2012 may be if Ben Bernanke and Mario Draghi acquisition out that bogus appeal for U.S. and European bonds is, at best, a concise application for an bread-and-butter emergency, not a abiding band-aid for a structurally-deficient economy. Don't be the one captivation their bag!