Thursday, May 5, 2011

Getting Shorts Set

So, the inflation trades worked out to the tune of, spot gold for $200, and KCN tanking like crazy and taking my biggest hit of the year so far for $700, and ABG a scratch. Basically not stoked with how the bet panned out, given that my short term call was correct. Might be an example of getting too cute, with not enough competence when it comes to taking positions in equities as part of a 'macro' view.

To shore up my weakness in equity valuations/calls - I've been doing some heavy lifting, or shall I say reading - currently reading best practises for equity research analysts, picked up the little book of valuation, bull's eye investing by mauldin. All look promising so far, I've realised that my excel work, needs a lot of work.

Tonight I've put down some short positions on the euro, aud, gold, and sp500. This is my biggest short bet of the year so far, I think the fake breakout viz the Osama news, and the current reaction to weak ISM data has set the right scene for US to follow the commodity price downturn in the last few sessions.

As you can see all price flows are breaking supports and are now turning lower intermarket themes don't lie, they just take time.

Let's call my basket of shorts, the 'recession trade' for now. Got about 95k loaded up ready to go. This is my biggest swing year to date, will plan to hold for as long as the tape allows.