If the bookies' electoral college math is right, here is a way to visualize from a poker perspective: Imagine Obama pushing all in with pocket kings preflop, and Romney with pocket queens. Well over 80% of the time, kings will be good. But can a third queen, a four-card flush, or a four-card straight to the queen materialize by the river? Absolutely...
Under normal circumstances, these market bellwethers are not correlated. The "horsemen" generally do not ride in the same direction. When gold is going up, the dollar and USTs are normally going down, or vice versa and so on.
When all rise together, however, it indicates an extreme correlation of "risk off" and diminished risk appetite across the board...
Hugh Hendry, the amusing Scotsman who runs Eclectica Asset Management, hates gold stocks. He won't buy them under any circumstances. Which is interesting, considering Hendry is partial to macro doom forecasts, and has made large amounts in years past betting on gold...
