Thursday, June 19, 2008

Now on to Jedda

What has historically happened in commodity markets when intraday volatility makes new highs for 7 consecutive days?

Of course, one must be careful with quantitative analysis as all oil traders are looking to the Jedda conference this Sunday for guidance as to the direction of oil.

This dovetails into an email response I just wrote to an investor (names removed as I am not going to provide investment advice per se on this blog):

Got out of *** and several other multi-line insurers. Whole world is bearish, I love it and sold lots and lots of puts (calendar spreads as well) for nice premium. Even sold *** as well. (*** does not "creep" up to explodes to those levels)

I have several positions that will profit from the Euro area being doomed. Sell PIGS, buy core country (Germany, France) debt spreads as well as my good old dollar/euro. Starting to build China doom scenario and Latin America problems (coinciding with commodity bust). Argentina already underway.

Long term, I am all about Africa - provided AFRICOM builds a base on the Sub Saharan west coast.

Exessively pessimistic valuations being priced into an environment with low rates, large cash positions (significantly overseas) in the S&P 500,, Jedda, Trichet denying reality and Europe still pretending they are OK. This is the time when flexibility, tolerance, and democracy eats the lunches of countries and political systems that lack these characteristics.

As usual, wall street analysts are wrong. RBC called for S&P 1000 a couple of days ago with the same conviction and analysis of that sock puppet ***** **********.

Sometimes, Investing and trading is more about emotion and temperment than analysis. Recall when the entire world was bullish back in the day...

1 comment:

Drackbolt said...

Position on the falling dollar at this juncture?