OT to Food4: I'm back from a 6 week trip to Australia. Not too much new. I miscalculated the arrival of a correction, to be sure. I expected it in September...October at the latest. But the market refused to cooperate. I underestimated the power of the hedge fund carry trade whereby the hedgies were borrowing US Dollars at essentially no interest and investing in Gold, Emerging Markets and other foreign investments to take advantage of the weak US Dollar. Thus we saw the huge run-up in Gold. But interestingly silver didn't mirror the move in Gold, and oil prices stayed stagnant. So it wasn't an all out rush to inflation hedges....only gold seemed to move higher and higher. I think it is now in a corrective phase and I fully expect the gold spot price to test $1000 again. It went up too far, too fast. If you own Gold investments I'd hold because it will only be a brief but necessary correction. Gold is eventually going to $1300-$1400 by late winter/early spring. One thing to watch out for is the UD Dollar Index. The USD actually has been gaining a little strength in here, after essentially staying in a tight range for weeks despite the hype about how low it would go. If the Dollar continues to firm up it will cause the carry trade to abandon their strategy (these are usually highly leveraged strategies)and will lead to lower gold prices and a drop in the financial markets worldwide. I still expect the S&P to drop at least 15% from its recent intermediate high. You'll get your money back on VXX if your basis is in the mid 40's. (I'll be lucky to break even on VXX at this point because the correction, if it comes, has been too drawn out for that trade to be a winner. But I'm holding VXX for now and have a series of sell orders on it starting at @ $53.) I'm still hodling a significant Gold position and will add more as the gold price approaches $1000. I plan to buy GDX (and GDXJ) when the price of GDX drops to @ $40.
As for COR, I'm probably not going to dump it until next year. I'll be selling ALL my equities by Spring and will use my COR losses to offset what I'm sure will be very nice gains in SLV,GDX,FCG,MOO,and my other inflation hedges. But I lost faith in COR a while back. It is essentially a total loss for me. One of the most dissaspointing investments I've ever made and I don't just mean the financial side of the trade. I'm sorry Ampakines are apparently not what we thought they were, or past and present management is more incompetent than I give them credit for. But the timing of losses will be a critical component of my forward strategy. Taxes are going to be going up, including the rate on long term capital gains. If I have sizeable cap gains realized next tax year then it will be imperative to realize my losses to offset the gains. And there will be almost no reason to own equities once this secular bear marker 'relief rally' runs its course. And I mean ANY equities..whether they be US, Euro-zone, Emerging Markets, energy, even precious metals. Just like in 1932 we have a long way to drop before we see a generational bottom in the markets. And the current administration is doing everything in its power to insure just such an outcome by delaying the pain with more of the medicine that caused the "patient" to get sick in the first place...too much leverage and too much debt. Have a good weekend.
