Going Short by Going Long

Take a look at the negative correlation between UUP and SLV.

Yes, the inverse of UUP is UDN. But UDN is pretty illiquid. Whereas SLV isn’t. Therefore, if an investor (or trader) wants to short the $US, he could buy FXE (not shown) or SLV and achieve nearly the same result.

That’s what most investors don’t understand. Almost always, to go long something means one is --in effect-- going short something else.

John Murphy, in one of his books, talks about ‘inter-market anaysis’, which is something most investors ignore. But the hedgies, like Perry Kaufman or Linda Raschke, depend it on to manage their risks and to turn a profit.

PALL and PPLT are pretty thinly traded. But I think they’ll have their day in the coming year. So I’m willing to track them as part of the ticker list I’m putting together for 2024.