I will be away for traveling in Australia for the next 2+ weeks till almost the end of this month. Given constant changes of locations and the time difference, I'm not sure I will have time to really sit down to observe, think and write in this period. So you may not hear from me for a few weeks. But I don't think you will miss too much.
The main theme for the next few weeks for the overall market I think will be a severe correction. S&P500 significantly below 1300 is very likely in my mind and close to low 1200s is not impossible. So if you are thinking to add more money to any long positions, I will suggest you exercise patience and wait. Better opportunities will be coming soon. Last week's job data was terrible as well as other major economic data around the world. I bet Bernanke is waiting for the market to call for his salvage by announcing another round of printing money, i.e. QE3. Without an end of world kind of sentiment in the market, he is in a very difficult position and may be blamed for manipulating the market and the election if he does QE3 now. But he knows there is no way he can avoid QE3. So my gut feeling is that the market will plunge dearly to allow Bernanke to move ahead with QE3. From the technical charting perspective, it is also arguing strongly for a severe drop.
Personally I want to be prepared for this, especially while I'm away and cannot attend to my portfolio in a timely fashion. So I have taken profits from short-term long oil positions and have added quite a bit short positions with SDS and TZA, which will benefit from the market plunge. I also think gold and silver may experience some severe decline as well in the near term, to prepare them for some significant bouncing up towards the year end, especially if QE3 is indeed in place. Similarly I have also added some short positions for gold and silver such as GLL & ZSL. In other words, I'm very much biased towards a severe overall market plunge impacting virtually on all assets in the next few weeks.
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