OpenEconomist Finally Gets Some Forecasting Credibility

I almost hate to say "I told you so" since it is never fun to be correct about major negative events, but at the same time, today's market reaction gives me some forecasting credibility. If in doubt, read both parts of my forecasts: Part 1 and Part 2.

If there is one area I may have fallen short, it is in my forecast of Gold. I anticipated Gold falling with any rise in the dollar against major currencies during a short-term flight to safety. Gold was up $30 dollars today (Thursday, when I wrote this) to a near-term high even as the dollar was up against just about everything.

This means that Gold is acting as a co-reserve currency along with the US Dollar.

I've yet to determine if this will be a longer-term trend. I am not planning on selling any of the Gold holdings that I have so far (about 15% of my total portfolio), but neither am I buying more. I was really planning on a near-term Gold correction and was going to use it as a massive buying opportunity -- that correction may not come, and I don't want to pass up my Gold play. I will keep readers informed.

My previous recommendations to buy puts on the SPY and calls on the VIX have paid off very nicely.

Disclosure: Long PHYS, GLD, UGL, short SPY via puts, short C, short BAC, long VIX via a variety of september calls

Reference: www.opensourceecon.com/main/my-economic-...