Are your core positions long or short?

Sauros wrote:

Hey Snapman, a first quick answer, I drop thoughts as they come, I'll detail later.

As you know, while at the beginning of the year I was bearish equity and long USD as a safe haven, I changed my view this summer.

This year I started building a long stock position though some asset managers using an old good dollar cost average strategy, betting that I would get some at the bottom : that appeared to be a good idea if only at the beginning of the year, being bearish, I didn't short the stock indices. That offset most of the gains I got of my equity position.
Now as you mentioned, a correction on the equities is still possible and likely (after a 7-month rally !!!) but i would say that :
1 - I think lots of guys, including what we call "real money accounts" ie "long-only" traditional players missed the rally and are waiting for a pull back to come it. That makes a severe correction unlikely
2 - The FED and others central banks still veil and now we know they will do ANYTHING to avoid a severe correction.

Now about your argument on the speed at which the SPX grew, as we discussed earlier, it is bullish to me as it signals a strength it is hard to reverse : I referred to "physical" parameters of the price. The jumps in the RSI, the white marubozu etc are generally to me strong bullish arguments (unless they are unvalidated straight but the opposite move which can lead to an evening star)

About the USD, to me its weakness is still very supported by the US Gov (don't listen to their BS at the recent G7 about "we want a strong USD") and as you know : trade the FED.

If you think that the equities will correct and the USD will go down, my advise is, you guess it : go long gold.
(Arghhhh, as I write this, i just had a look at a Gold chart : 1044 and I took part of the profits )

Snapman wrote:

I may consider to start moving a considerable amount of my portfolio into cash as they have nearly fully recovered from the 2008 crash, as it is the end of the year (take advantage of tax strategy of selling my loosers).

Anyone else fully invested right now?

Batman wrote:

I am absolutely loving the bears. I am looking to get short equities via dxd, skf, and qid.

Quote :

IMHO
that is a big risk considering how far the equities tanked the past two
weeks, and considering bullish picture is still in tact. At most you
will get a small profit IMO, but hey thats better than a loss. Best of
luck, who knows maybe we will see 1030 support hold on the SPX... if so
you definitely got room to the downside.

Batman wrote:

I can't understand why you are still bullish. The volume tells the true story. Up days lack any kind of significant buying support (Light volume every time). The sell-offs arre heavily traded. I'll send you some tables. Equities are over-valued point blank. Fundamentals tell the true story. Not to mention Vix out of the money calls for december 35's are picking up in volume. When the vix is over 30 that is a historically bad sign for equity markets. This rally is artificial. Anyone who jumps in now will daly be scathed.

Asset appreciation in US and other G-7
economies has been artificially elevated for years. In order to prevent
prices sinking even lower than recent downtrends averaging 30% for
stocks, homes, commercial real estate, and certain high yield bonds,
central banks must keep policy rates historically low for an extended
period of time. If policy rates are artificially low then bond
investors should recognize that artificial buyers of notes and bonds
(quantitative easing programs and Chinese currency fixing) have
compressed almost all interest rates.But while this may support
asset prices - including Treasury paper across the front end and belly
of the curve, at the same time it provides little reward in terms of
future income. Investors, of course, notice this inevitable conclusion
by referencing Treasury Bills at .15%, two-year Notes at less than 1%,
and 10-year maturities at a paltry 3.40%. Absent deflationary momentum,
this is all a Treasury investor can expect. What you see in the bond market is often what you get.Broadening the concept to the U.S. bond market as a whole (mortgages + investment grade corporates), the total bond market yields
only 3.5%. To get more than that, high yield, distressed mortgages, and
stocks beckon the investor increasingly beguiled by hopes of a V-shaped
recovery and ‘old normal’ market standards. Not likely, and the risks
outweigh the rewards at this point.Investors must recognize that
if assets appreciate with nominal GDP, a 4-5% return is about all they
can expect even with abnormally low policy rates. Rage, rage, against
this conclusion if you wish, but the six-month rally in risk assets -
while still continuously supported by Fed and Treasury policymakers -
is likely at its pinnacle. Out, out, brief candle.”