I’ve been asked quite a few times to share what I keep a close eye on in the markets. In my framework, everything hinges on the dollar. The thing I am most concerned about is an abrupt fall in the dollar.
So I keep a close eye on three things each day: the dollar, interest rates, and gold. By tracking these three things, I feel I am adequately prepared to know if a major event is occurring. Should I see a pronounced break in all three of these items in concert, I will send out one of my very rare alerts.
For those new to the site, I will only send out an alert if I receive information that would personally cause me to take a specific action. Those actions might be “retrieve my gold from the bank,” or “take out more cash,” or “go home” (if traveling), or “fuel up the cars,” and so forth. Suffice it to say that there are a number of events that would cause me to shift from relative complacency to more vigorous action.
I consider these events to be rather unlikely, even improbable, but I cannot dismiss these concerns entirely. So my approach is to develop a plan of action and keep a close eye on a few sentinel charts that reflect the views of millions of separate eyeballs.
What I Track
The Dollar
At the top of the list is the dollar. Here I follow the following chart (located here on my site). Every day, it’s up and running (~six days a week).
Today the dollar took a pretty good tumble. Whenever the world’s reserve currency falls more than a whole percent, it’s a pretty significant fall. My personal limit, beyond which I enter the “alert zone,” is around 2%.
by mono