Dear Investor
On 4th Feb, I wrote to you in detail on “A crash In Progress” expecting correction in virtually every market except dollar and china.
Yes, Commodities have continued rally and Dow too remained in bull zone since then.
But, as I had said the deciding factors will be currency movement coupled with resurfacing fundamental woes.
And, In fact that movement is very much in action and should cast dark shadows on markets next week.
As I pen this article, Dollar index is at 78.62 up against all currencies.
Swiss Franc is down close to 4% against dollar in this week. Japanese Yen is down close to 3%, Euro is down 2.5%, Australian Dollar went down 1% yesterday.
I believe this is the beginning of short term cycle, where in all currencies will come down heavily against dollar forming significant base for long term rally in next 2-3 years.
Dollar will continue its up move targeting 80 first and then 84 level in short to midterm causing significant correction in commodities and developed markets.
Hence, if you are still in commodities and stocks or long on any other currency against dollar, come out now.
On the other hand, China has remained sideways with upside bias. I expect China to continue upside along with dollar.
For China, dollar’s up move and correction in commodities will be like God gift.
Dollar’s up move will reduce pressure of currency revaluation in short term. Correction in commodity prices will be huge comfort for china being world’s largest exporter.
Even investors will seek shelter in Chinese stocks as markets in other nation correct as China market is still cheap in valuation.
Though, I expect China to revalue its currency any time in this year. I will update at length later.
Regards
Dhaval
Blog: http://investmentacademy.wordpress.com/
February 12, 2011
investmentacademy
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1 responses to “A Quick Update on “A Crash In Progress””
Ben
April 13th, 2011 at 01:35
Finally, someone that see’s it the way I do. I’m not an economist, but a small investor. As I look for places to put my USD’s (I live in US, but travel and have family in India) everything is OBVIOUSLY top-heavy, everywhere on earth – looking over-ripe to plummet. I’ve been saying this for years about Gold, I sold my small stash at a little over $1000 per oz, and have no regrets. Even though it went up, it’s just going to crash wildly when it does. Oil is clearly a knee-jerk reaction to threats that do not seem to be real, Japan Earthquakes again shake people up, but fundamentally, everything is overpriced. I look at U.S. Stocks, all high for the year – I looked a currencies today, and found your article on why Rupee is falling, that may be a buy in a few months, but anything else is off the scale. I for one think I just may be wise to hold my $ until something breaks.. Part of why $ are low, I think, is there is just no place to spend them! – The world has buckets of $$ sitting around waiting for a place to go. Once everything else “corrects” I will join in and buy things/invest again. I’ll try to keep an eye on your blog. Good work.