The coming opportunity to once again sell the market at 1580-1610 is a gift. Holding long short positions in equities vs commodities has been profitable. Will look for shorts in fundamentally weak markets that has short squeezed lately, like spain and italy, together with shorts in commodities. Continously, on/off, after the market has corrected some, hedging is done with a strong market like the s&p.
Bull against bear
Financial markets, macro economics, politics and everything else concerning the global markets. The writer is a long time investment banking operative in the nordic markets. The blog is usually updated once a week with specific trading advice. On a monthly basis, the goal is to provide a strategy update. In addition to that, there will be posts of more general content, housing bubbles, investment strategies and more.
April 23, 2013
April 15, 2013
Weekly update 4/15
Have a look at the previous recommendations and my charts.
I would not continue to aggressively sell commodities here.
In the S&P I would be looking for a consolidation move sideways in before mentioned intervals this week and perhaps next and then higher again if the bearish hedging continues at this pace.
Will evaluate the relative value of commodities vs equities as this consolidation period continues.
As always, sell volatility on any spikes.
I would not continue to aggressively sell commodities here.
In the S&P I would be looking for a consolidation move sideways in before mentioned intervals this week and perhaps next and then higher again if the bearish hedging continues at this pace.
Will evaluate the relative value of commodities vs equities as this consolidation period continues.
As always, sell volatility on any spikes.
April 3, 2013
Weekly update 4/3
SPX @ 1561. So, in my last two posts I called for
1) Obviously we seem to be needing new all time highs in SPX and DAX to finally flush out the last of the bearish speculators. I do not expect much follow through and will follow the scenario outlined in the last post with a trading range between 1540 and 1570.
2) Sentiment, technicals and fundamentals now warrant a decline below 1540, maybe all the way to 1500-1510 in to earnings season.
Both these statements I actually hold on to still. I am short puts and calls around this strategy. Tomorrow is ECB day and there is a tradable chance (i.e. market is underestimating the chances of a rate cut IMO), that ECB lowers the rate or signals strongly for lower rates. That would create a huge spike since short interest has risen the last few days near the all time highs in the SPX. Without that ECB fuel, I expect us to visit 1510 without much of a pause within the next 1-2 weeks. A second trigger could be the payrolls report friday. So within that event setup lies the trading strategy.
I would hold onto the statement selling around 1570-1575, expecting we do visit the region around 1510 into earnings season. THAT would provide fuel for another leg higher but that is also a leg I would sell in to... altough at slightly higher levels, lets say even above 1600 if we are lucky.
That is my road map at the moment. Obviously any long equity exposures are hedged partly or completely by short commodities as pointed out previously and in the yearly strategy update.
1) Obviously we seem to be needing new all time highs in SPX and DAX to finally flush out the last of the bearish speculators. I do not expect much follow through and will follow the scenario outlined in the last post with a trading range between 1540 and 1570.
2) Sentiment, technicals and fundamentals now warrant a decline below 1540, maybe all the way to 1500-1510 in to earnings season.
Both these statements I actually hold on to still. I am short puts and calls around this strategy. Tomorrow is ECB day and there is a tradable chance (i.e. market is underestimating the chances of a rate cut IMO), that ECB lowers the rate or signals strongly for lower rates. That would create a huge spike since short interest has risen the last few days near the all time highs in the SPX. Without that ECB fuel, I expect us to visit 1510 without much of a pause within the next 1-2 weeks. A second trigger could be the payrolls report friday. So within that event setup lies the trading strategy.
I would hold onto the statement selling around 1570-1575, expecting we do visit the region around 1510 into earnings season. THAT would provide fuel for another leg higher but that is also a leg I would sell in to... altough at slightly higher levels, lets say even above 1600 if we are lucky.
That is my road map at the moment. Obviously any long equity exposures are hedged partly or completely by short commodities as pointed out previously and in the yearly strategy update.
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