(Click at the picture to enlarge)Every thing seems to fall in place. The USD-Index has reached or is very close to its bottom, metals might need to rally a bit more, but remember how gold and silver continued to rally well into 2008 before collapsing, while equities began falling in October 2007.
Oil is lagging, but again it didn't collapse before July 2008 even later than the metals.
We migth need one more small rally higher in DJI and S&P 500, but we are very close to the top now. If it isn't already in place it could be met later this afternoon. DJI have retraced 38.2 % of its 2007 - 2009 fall and S&P 500 has retraced 50 %, which are normale Fibonacci retracements in a bear market.
When prices begin to collaps again I do expect the fall to be just as violent as we saw it in the autum 2008 and the first quater 2009. It will take many by surprise, as they do expect the crisis to be over. Just yesterday both President Obama and Treasury Geithner said that they have pulled the economy away from the brink of collaps - They can hope all they want, but I'm sure they will be very dissapointed soon.
Also yesterday I saw that Funds now are all back into the market with only about 4% in cash, just as low as their holdings in October 2007. This is the perfect "Black Swan" scenario.
Right now the risk being out of equities or even short is rather low, while risks being into equities could loose you a lot of money quickly.
I hear it over and over again, I read about it and I still think it's the most stupid thing I have ever heared or read: Being in the market all the time is the only way you can nail the big upswings - Yeear right, but you also nail the big downswing and this one is like no one we have ever seen before and could whip out gains made over the past 20-30 years. You are welcome to stay in the market... I won't.
I will rather be prepared and wrong, than unprepared but right!
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