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Boris Chikvashvili

Boris Chikvashvili

Boris Chikvashvili was supposed to be a theoretical physicist (Russia+Jerusalem Hebrew University, MS Physics, with distinction, toyed with QUARKS). Somewhere on the road to PHD…

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Dollar Topped for Now

Dear Reader, It looks like the Dollar has reached a point of rest, as 96 area on DX represents half of the retrace of the fall from 2001 to 2008. If you look at my postings here for last 8 years, you will notice, that I was bullish on Dollar since 2008. Notwithstanding the market and economic conditions which caused majorityof observers to call DEMISE OF DOLLAR, again and again, I kept being bullish and still do, but would like to remind all that we are reaching late in the tooth for this bull market. Enjoy Trips to Europe and shopping imported goods, but remember nothing lasts forever.


Stocks

We called for topping process in stocks for 2014 and markets did not disappoint, as twice last year DOW went negative and NYA, has practically topped in July, with marginal new high in September. We continue to posit that as long as no new highs are generated in NYA, market is vulnerable and requires strict technical trading for catching moves up and down. Believe that another 10-23% decline is still in the cards( from top), but will abandon this theses when / if the NYA makes new highs.


Bonds

We repeated , All along, Bonds will outperform the stocks and they have done masterfully so. There is hardly much to say about this, except that it looks like the stock market is undergoing a stealth decline

Note, at no point did we Call for shorting the markets, just that Equities will under-perform the Bonds. As stated above till we see new highs on NYA, sharp decline in stocks is still more likely than new bull leg. Having that said, the YBR is suggesting a bottom soon and it does not matter how shallow that low will be, it will cause us to change the stance from bearish to more bullish. Interest rates are likely to bottom this year, with marginal new lows in 30 Year Bonds compared to 2008.

SPX/TLT Chart
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Gold

We were look-warm towards GOLD and it has payed off. As we have seen new lows in GOLD and it is still possible to see new (or approach) low in gold in 2015. At the recent lows of late 2014 we did go in to ride the upside and stayed positive on some GOLD miners since the bottom of late 2013! which remained in black , since. In general , we remained more constructive on Gold Miners and still do. So, while GOLD is viewed still as an insurance policy against the madness of the world, the GOLD miners are more of a longer term investment for us. Still do not expect miracles as choppiness may persist in 2015 and trader maybe better off than investor.


Oil

We were negative on OIL even though year ago, we did not advise shorts as the geopolitical situation looked suspect to us ( and still is). Now, we believe the time and price windows for OIL bear are closing onto 75%+ area, which implies that we would be a lot more constructive on OIL, within few months and few percentage points lower. At the same time , there is nothing wrong with picking up few quality stocks from OIL industry. If one must hold stocks , I would rather concentrate on entry points for those stocks.

As our motto is by Shota Rustavely: "You Find What You Give, All Else Is Lost"

 

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