onsdag den 26. august 2009

The answer my friend is blowing in the wind...

This market only does one thing: it drives you bonkers - there is presently classic war between the signals for this being intermediate top:

  • Divergence in S&P again (new price high - lower RSI high)
  • Break down in Crude prices confirming "priced-in hike in demand"
  • Falling freight rates.....
  • GBP - cyclical currency under attack....
  • Fixed Income - our favorite play still bid.... despite S&P now 50 figures higher (reflection of loose short-term rates and nowhere to place them...)
  • Lot of the buy-and-be-happy programs running out of either money or political will to be renewed...

....and that this could be for "real"... i.e S&P towards 1050-00 then 1125-00:

  • US index having hard time confirming strength
  • AUD - the Asian sentiment indicator refusing to go down - for now...
  • S&P hanging in there by end of day - every single night...
  • VIX still low (although note how ATR (Average True Range) is going higher...!!
  • Incoming data has been good, will remain good...

For now we remain with very small positions (except in FI):

Foreign exchange:

Short GBP.USD since 1.65ish on lowest STIR rates around , a MPC which is very bearish......

Long US index --- from just below here... Do not trade EURUSD no more - waste of time....

Note how US index could confirm strength today on close:

Equity:

Still short small S&P - close below 1020-00 would confirm top in place - a close above today should theoretically confirm UPTREND... so decisive day today...

Fixed income:

Long Danish Govies - budget deficit to expand, but low rates is part of equation - Denmark remains one of the most leveraged economies around and we will have low rates well in to 2011 if not 2012.......

Commodities:

Short Crude for the past week - sold small gold this p.m.....

Overall - not really exciting- some signs of cyclical top in place, but rest assure the "plunge-teams" will be in tomorrow should we go down.

The main scenario remains one of: Some downside in September, then Q4 should be ok ...

Safe trading,

Steen

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