Friday, January 27, 2012

Nothing Correlates

I am glad that I am not day trading this market, and that I am long PM and that is it.  Nothing is correlating the way it has previously, or the way one would imagine.  FX is extremely volatile, but volatility by the VIX is low.  Stocks keep ramping higher, and the euro's moves have not exactly matched the news lately.  The dollar ramped with stocks, but now is receding.  Of course, the one simple play, investing in PM, has done fine.

Oil stayed high on a high dollar, which was weird, and as the dollar recedes, it still stays where it was.  Bonds remain high, even while foreign investment flee USTs.  The PWG must have a lot of cash from frontrunning every stock bubble and bust over the last three years to juggle the stock and bond markets.

What this all means of course is that we are at a turning point.  Who knows how the macro news will translate, but we know Europe is in trouble, the Federal Reserve will continue to unleash credit for the Treasurie's debt, and geo-politics remains on pins and needles as the Middle East to Persia to Asia continue to question the motives of the Western Powers.  It is likely that any swan that descends on the lake of the real world will not be black, as we will see it coming from afar, but that does not mean it won't land.

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