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Countercyclical? Sell Gold, USD and North America, Buy Euro, Europe and 4 PIGS

|Includes: GLD, SPY, ProShares Ultra FTSE Europe ETF (UPV)

Buy low and sell high! The age old mantra.

So what does it mean in big picture terms today?

Sell Gold, USD and North America, Buy Euro and Europe.

The fear for Europe is widespread.

In USD terms, Euro Stock markets have, according to MSCI Barra, underperformed North America on MTD and YTD terms as well as for each of 1, 3, 5, and 10 years. The USD and Gold have had significant rises.
   www.msci.com/equity/gics.html

28/05/2010 Regional USD          
 MSCI Index MTD 3MTD YTD 1 Yr 3 Yr ↓ 5 Yr 10 Yr
EURO -13.7% -12.4% -22.8% -3.6% -19.0% -3.0% -3.0%
FAR EAST -8.1% -4.3% -2.4% 5.9% -11.5% -0.2% -2.9%
PACIFIC -9.9% -5.6% -5.3% 10.5% -10.8% 0.8% -1.3%
NORTH AMERICA -8.2% -1.3% -2.3% 19.8% -9.7% -1.0% -2.0%
NA - EUR 5.5% 11.1% 20.5% 23.4% 9.3% 2.0% 1.0%

For people with a higher tolerance of  risk, maybe it's time to sell USD, North America and Gold and buy 4 little PIGS:

28/05/2010 USD
 MSCI Index YTD
GREECE -42.19%
SPAIN -33.20%
PORTUGAL -27.82%
ITALY -27.75%

There may be worse to come for the 4 PIGS, Euro and European stock markets, but perhaps it's at least time to commence re-weighting to Europe and the EUR on a countercyclical basis.

At the very least it's time to watch for a change in trend for US vs Euro markets in USD terms and consider your entry timing and strategy.



Disclosure: International bonds, various share funds, Australian property. (About 90% AUD.denominated).