What Goes UP....Comes Down

Well, this has been an interesting time.

The USD has been seeing all time lows against all the major currencies and the big banks in the US are writing off BILLIONS and this is only the tip of the iceberg. The worst in the US economy is yet to come. Everyone knows that the fundamentals of the US economy are in extremely bad shape.

So, what is happening?

Gold is up, the EURO is up. The CHF is up. The USD is down, down down....how far no one knows.

How does this affect this kind of hedging?

Well, as long as the hedge sticks we should fare the storm on lower margin settings. But, if you look at the EURCHF 4 hr chart you will see that it is tanking. That means it takes LESS Swiss Francs to buy a EURO. The CHF is getting stronger in other words. Why? Investors often flee to the Swissy in unstable times. And, boy, are these ever unstable times!

This does have an effect on our equity swings in this system. But, as long as it goes down gradually and is offset by interest and sell high earnings we should not see too much damage.

The system is designed for the long term and is not a daytrading system. As long as the interest and sell high profits accumulate it makes it easier to go up than down.

You can see that recent events have affected the equity fluctuation to the negative on the left.

It cannot always go up. Must take the good with the bad.

Equity will go up and it will go down all while we are getting daily interest and buying low and sell high.

I guess the markets will do what they do.

Let's see how the USD fares next week.