Strategy update 2013

As mentioned in the previous post I was a seller in to the santa rally. Generally, I like to position myself by entering or exiting trades in two dimensions, both time and "space"/price. An example would be the last weeks where I have a view on selling in to a coming rally and therefore taking positions over a time of aprox two weeks, at regular intervals. Half my position is created that way and the other half by taking action on pre set index levels.

Even considering last few years of totally central bank and politics driven markets, this market right now is extremely event driven out of Washington. It is very likely we get a whipsaw movements depending on what happens in the next few days. I have a clear strategy how to play it and it rhymes with what I have advocated here many times last few years. Simplified it is:

Sell the rally and buy the dip.

That single statement is the most important to remember going forward as well and my strategy piece for 2013 would be titled exactly that. There simply is no real long term growth driver like previous 30 years and there simply is too much intervention in price levels for a large price decline.

More short termish, any excessive reaction to the fiscal cliff will be mean reversion traded. In the next few weeks, no matter the outcome, I think we will test around 1350 in the S&P. But that level will be bought by me. How to react to the following upswing to 1400-1430 again is another story.

For 2013 some of my themes that I will trade around will be:

Short base metals and crude oil against equities and gold (on a flush out of extreme bullishness in gold).

Short relative small cap tech companies against large global mega cap tech companies.

Long global mega cap companies.

Long USD vs SEK.

Long SPX vs OMX.

Sell volatility on any spike.

Happy new year!

Weekly update 12/3

I am a seller in to all rallies now. I would also, contrary to previous post, not hold longs in precious metals.

Very weak technicals here with negative divergences in weekly RSI translating in to long term weakness in prices.