It's a New Year and looking backwards can be interesting. We saw currency markets turning exceptionally volatile and solid results continuing in both bond and stock markets. Precious metals and commodities provided outperformance in 2010.
Today, it's time to look at now and into the future. It looks to me like the time to reduce equity market risk for conservative portfolio's and to look for an attractive entry point for the new positions. More aggressive portfolio's can tolerate the equity markets better. IMHO, it may be that the equity indexes have more upward resistance from the US$ index which has been busting higher, currently through 81. This can be illustrated with the price correlation between the two prices, which as seen next, no longer seems intact, at least for the recent past.
Today, it's time to look at now and into the future. It looks to me like the time to reduce equity market risk for conservative portfolio's and to look for an attractive entry point for the new positions. More aggressive portfolio's can tolerate the equity markets better. IMHO, it may be that the equity indexes have more upward resistance from the US$ index which has been busting higher, currently through 81. This can be illustrated with the price correlation between the two prices, which as seen next, no longer seems intact, at least for the recent past.
The
graph below shows the scenario as of last night, illustrating the US$ index in
candlesticks and the S&P 500 in the black line.
Next is a look at the US$ index with the DBP (precious metals) ETF as a metals proxy. Price weakness is already seen in the metals. The price correlation between these two prices still seems intact.