Monday, July 7, 2008

USD will Define Crude Top - Anil Gandhi

The global equity markets bottom is quite strongly linked to top in crude oil as of now, and crude oil can top out only when US dollar (USD) starts its Bull run again.

Amid talk of a bear run and recession in the US economy, a bull run in USD will move money out of Gold -- for a while considered a safe haven -- and also put a top in crude oil (cheap import of oil in USA). This will be the starting point of stability and the short-term bottom resulting in 2-3 months of uptrend in the equity markets.

I recall how Dow had topped out earliest in October 2007, before rest of world markets had topped out in January, so ideally Dow should bottom out first followed by the rest of the world 's markets. Invest 35 percent of your cash now in frontline stocks. Just 35 percent and not all of it.
and keep adding on more as the uptrend starts and more signals comes in.

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