Friday, July 20, 2012

Markets rising against the Sentiments

Markets have been rising, and there are skeptics out there, myself included given how much whiplash action we've experienced in the second quarter and all of 2011.  MarketAnthropology expects a similar falloff to the original GFC.

The currently weeklong rally has been met with rising yields and higher US dollars, this decoupling can only last for so long.  Is shorting bonds the trade of the second half of the year?

I'm taking a much more mild position in my equities, with what I expect to be reduced volatility with a slight upside bias.  Looking for a few covered put positions of stocks trading in their ranges, and position for a possible rally in commodities.

Another decoupling is the Aussie dollar which has rallied 8% whilst gold and silver is off 2.5% and 4.5% in the last two months.

I am still holding my QAG agriculture position - I had expected a good rebound from the prices of corn and wheat, the unexpected drought was just pure luck, and now the ETF position is up over 40%.

Consumers are shopping increasingly more frequently online - EBAY showing good results, and GOOG showing a higher click through rate - beating the trends against ad-blocking programs - and this is on the backdrop of weaker retail figures overall - the overall spend might be falling but the online players are starting to gain most of the market share.