Friday, March 11, 2016

Mar 11 - Short GLD/ miners

Took a short position and looking for small/ mid pullback in GLD.  If equities continue to stabilize, this could hurt precious metals in short term

Almost ready to crack the trendline a second time


Doug said...

I know you're a technician and that's why I like to read your posts.

About a week and a half ago, Chinese officials announced upwards of $3 TN 2016 system Credit growth. Like Draghi, they are throwing the kitchen sink at "stability" to counter the (slowly) bursting Global credit bubble. But we now know QE doesn't ultimately work, and now it doesn't even work to devalue your currency anymore (Euro went up with the QE announcement). And the marginal utility of debt is dropping to nearly nothing. The global debt bubble is popping but it's in slow motion when looked at day to day. China might rack up Trillions more of debt, but it's doing less and less-- just like in the rest of the world.

The Chinese debt splurge is creating some repositioning in commodities and EM and equities. Australian and Brazil dollars are up too. Like I mentioned in a previous comment, I think it might last for a couple more weeks until dollar hedges/swaps/forwards, put on in January by PBOC authorities to calm previous currency "turmoil" in Jan., expire. Then the extreme dollar shortage will re-assert itself with severe devaluation pressures as banks struggle to find dollars for even a reduced level of commerce. The result will be even less commerce (less exports & less imports).

So, a couple of more weeks of a choppy rally could conceivably continue until turmoil re-emerges in China's currency markets by early April. For what it's worth. It's how I can explain the recent rallies.

Greenlander said...

Yeh actually I am thinking all this debt turmoil is what is driving up gold right now. China at some point is going to have to unpeg their currency. China's capital controls may prevent capital outflows to a minor degree in the short run but in the long run it will damage their economy. No multinational will want to park capital there bc of government risk and there isn't enough legitimate domestic business growth.

May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...