November 2010 Asset Classes Update

Nov. 11, 2010 - PRLog -- The TDP® posted another positive month in October going up 2.96%. Again, not ju  st because US stocks went up. The TDP® only contains about 15% US stocks and that 15% is all in real estate stocks. From September 1st to October 31st the TDP® climbed 5.9%. This is very nice, especially when one considers the diversification in this strategy.

Last month, I wrote, “I expect gold to continue to go up through the mid part of October, and then somewhere around mid-October, through the rest of the month, we’ve seen that as the most bearish time for gold.” This ended up being exactly what we saw happen: from the close of October 14th through the end of the month gold went down 1.58%. However, gold still finished the month of October up 3.68%. The fact that October is usually gold’s worst month and this October gold still went up just shows me that this is a powerful bull market for gold right now. Few dare stand in its way as it is approaching its final ascent which is usually called “parabolic” or a spill over. When I write “approaching its final ascent” that does not mean that I think it is going to happen soon, it just means that gold has not even gone parabolic yet and therefore I don’t think we have any reason to believe that its bull is over.

I’m still bullish on gold. I believe the market correction to gold during the last half of October is over and that gold (and gold stocks) will resume its course upward and onward in November. Gold has risen 8 of the last 10 years during the month of November with 11/19-11/26 posting the best rise.

Last month I wrote, “I am still bullish on US and real estate stocks in the short term. This September 1st rally, may continue further than any of us expect.” And during the month of October US stocks and real estate stocks went up 3.82% and 4.74%, respectively. Last Wednesday a very large closing downtick reading of -300 or higher, -688, was recorded for the S&P 500. This usually means that an interim bottom is reached either that day or within in the next 2 trading sessions. This again appears to be the case and right now I am still bullish on US and real estate stocks.

What about the US dollar? Well to finish last month I was bearish on the US dollar and had a short position on. However, on October 20th I changed my position to go long the US Dollar. I am currently bullish on the US dollar against the Euro. This does not mean that I believe our dollars are becoming more valuable in the open market and are therefore able to purchase more goods and services for less. I simply believe that right now it looks as though the US dollar is going to outperform the Euro.

Last month, regarding bonds, I wrote, “Right now, and in the intermediate term, I see interesting rates going up on bonds.” During the month of October interest rates did go up. In fact, the interest rate on the 10 year Treasury went from 2.52% to 2.61% during the month of October, representing a 3.57% increase. Because this is more of an intermediate opinion, I could be wrong for months in a row before the trend goes our way. I remain a believer that interest rates will go up or a bear on bonds, in the intermediate term. I don’t think this current intermediate term bear is over yet.

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