Well, thank god this month is almost over! My portfolio had a fantastic run from June through August but it has been all pain in the month of September. And I can't say I am completely surprised because the two months of the year that I have always struggled with are August and September. Whether the trading is not uniform due to vacations or back to school, I have had issues making money at this time of the year. So with that said, what are my current short term trading thoughts (which you probably can do the opposite and make money!).
In the metals area, I like gold and silver to continue their move higher. This is all about momentum and SI has plenty. Gold has been running into more selling but if 1300 is taken out, I think we'll see a wave of short covering. Silver, as I noted a few days ago, has an extrapolated target around 30 based on this breakout so the momo guys might jump in with both feet if it runs. For copper, the trend is higher but resistance here has been a bit problematic at 350. in terms of the trade, I am long silver and gold. Copper, nothing at the moment.
In the FX arena, I remain bearish the Euro and bullish Yen. For the Euro I am not trading against the current momentum so I am sitting on the sidelines. As for the Yen, I missed my long entry a few days ago so I am flat on this end as well. Even with the BOJ coming in and tattooing the Yen, the trend did not break which argues the rally mode will continue here. Ultimately I think some great shorts come from both of these trades in the months ahead.
In the softs and grains section, I bought the dip in sugar the other day and trailing with a stop. With Wheat, I am waiting for the contract to rollover. It has been range bound of late with major resistance at 745/750. The trend in sugar I believe is still upward. For the wheat market, I believe it is down.
In the equity and vol world, I am flat in the SPs and have been cutting back in my long term money in anticipation of a correction. I remain long VIX futures and the VXX and might add if the VXX breaks over the 18.50 level. In terms of trends for this vol, I believe it is still down over the long term but playing the long side anyways because it is so very oversold. On the equity front, I believe we are in a bull market with a correction possible.
Lastly, in the bond market, I am flat at the moment not choosing to fight the trend. I believe the overall trend is down in price for both 10s and bonds but at the momentum, the very short term momentum is working against that thought. Thus I sit on the sidelines and wait for the turn.
Happy trading.
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