3 Charts I Am Looking At (Aka Dead Cat Bounce Watch) - John Rothe | Portfolio Manager, Quant, Tech Geek, And Sometime Superhero To My Kids

3 Charts I Am Looking At (Aka Dead Cat Bounce Watch)

Three ideas I am looking at now:

Gold is still rising after its three month decline. Additional liquidity from QE3, China’s recent interest rate cut, and European bank bailouts, have inflation watchers worried about inflation spikes in the future.

For those who are interested in the correlation between gold, inflation and deflation, last week I posted a research piece I was reading showing the impact of inflation and deflation on the price of gold from Oxford Economics:

The Impact of Inflation and Deflation on the Case for Gold

 

I have also been looking at the ProShares Short 20+ Year Treasury,(“TBF”) and PowerShares DB US Dollar Index Bearish (“UDN”) ETFs.

Fears of what will happen to the Euro and European banks have caused a major sell off in the Euro. The proceeds have flowed into the US via the US Dollar and US Treasury Bonds.

As talks of a solution to Europe’s problems progress, traders looking for a bounce may reallocate money from the US back to Europe. Hence the inverse ideas.

Possible Short Term Bounce?

Money Moving Back Into The Euro?

Happy Trading

-John

 

(Disclaimer: I/my clients have a position in XAU/GDX, UDN, TBF/TBT and may add to those positions in the near future.)

 

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