Chart update

WTI, Light Crude Oil, Update, note real time quote @ 92

Silver

Gold

SPX - looking for a blow off top between 1530 and 1550, then some sideways/down action until we build a base.

Weekly update

SPX @ 1512. The crowd turned awfully bearish after just one day of declines. I used the decline to sell vol and increase longs on equities while slightly decreasing shorts in the commodity space. Also keeping a bunch of shorts in weak equity names. The consensus is now very much to buy the dip and see new all time highs. My playbook says that we first at least will get a fake new high of the year in early march and then we could be in for some sort of wider consolidation period until things become more clear. At that point I would aggressively short commodities and almost as aggressively short some equities and on third place broader equity indices.  So, first higher, but less than the crowd consensus will be, and then down, through the buy the dip camp levels. Perfect for fooling as many as possible.

WTI Light Sweet Crude Oil

Another commodity sell visualized.

 

Weekly update 2/14

SPX at 1521. OPEX tomorrow. Expecting very small movements until end of next week when indices will break upwards and continue to slow motion squeeeezeee...

Nice to see precious metals breaking down. This could get ugly on the downside with everybody and their granny long.

Weekly update 2/8

SPX at 1517. The only update I will give is a first estimate of when it makes sense to start selling in to this rally. Until then, just ride the rally and sell option vol on any uptick in vol. That the equity market will continue its grind higher is the high conviction low risk trade, what will be more interesting is to see if metals will disconnect from the equity market in this rotation phase. There will be more money to be made in that space than the equity space if that is the case.

The first estimate of when to start selling is mid march. That is when according to my analysis of sentiment, fundamentals and other technicals, we will have a first window opportunity of taking advantage of a potentially neutralized bearish sentiment which can give way for some real profit taking. Until then, stay long.

Weekly Update 2/3

SPX at 1513. Everybody are trying to call the top. This market will continue to grind higher in the following week, with perhaps, a small shakeout of new weak longs that will once again have us testing 1490-1505 area. But more likely than nominal levels, this is about relative levels, i.e. a 1% decline from high to low in a market that has around 3-5% more upside before the possibility of a larger correction, i.e. MA 20, MA 50 correction.

Continuing to sell equity volatility on any increase in premiums is a very profitable strategy in this environment, as long as premium does not reflect the fact that markets will be dead (prices set by central banks) for some time still. After a 1-2% decline I would be selling atm puts.

I still prefer selling the commodity spectrum (especially precious metals) on any upticks, and especially when we are close to "risk market highs", which we are at the moment. Then the long equities, short commodity trade makes a lot of sense to increase in position size. Also to take advantage of the super short squeeze we have seen in some fundamentally very weak names like RIMM/BBY, NOK, AMD, LXK, XRX, PHILIPS, FB, LOGI. Short these against long positions in the likes of GOOG, IBM, GE, MCD, PG etc...