What's the Best Way to Prepare for the Market's Next Move?

I took some profits off the table on Friday, and expect to see a mini-rally in the dollar and some weakness in gold over the next few weeks. This will most likely be a much-needed breather and consolidation in order to form a base for the next big move, but we could see a small correction taking gold back to $800 next week.

As many readers know, my strategy is to maintain a core position in precious metals and energy stocks, and rarely touch that position. It represents over half of my portfolio and will take the punches, and keep riding up over time. The remainder of my money is allocated to more speculative trading strategy, investing is smaller companies and attempting to time the market, and add to positions on dips. I think we will see one of those dips in the next week or two, so it might be worthwhile to have some powder dry.

Consequently, new traders looking to establish positions will likely find a better entry point in the next few weeks. But I don’t expect the consolidation/correction to last long, and would not be surprised to see gold above $900, and perhaps pushing towards $1,000 by the end of the year.

Outside of gold and energy, we recently reduced our exposure to emerging market ETFs and shorted the U.S. market in Housing (SRS), and Financials (SKF). And while we might be a little premature in discussing the ProShares UltraShort FTSE/Xinhua China 25 ETF (FXP), we fully plan to take advantage of both sides of the China boom, and expect the U.S. market decline to trigger a significant sell-off in China in the near future.