I think we are going to get a bond rout out of these bogus employment numbers Friday, especially the revisions. And yes, I think this will seriously puncture the housing and credit bubble.
fxmoneytrends.com
fxmoneytrends.com
It will be interesting to see how much USD can rally from it. If it can get up over 90, 91, we could finally see a break in oil. I think the 10 year needs to trade well above 4.30% to support the USD at all. The stock market might react to the good employment numbers, Bush re-election and oil break with an exhaustion gap up, but then a rapid fade (big intra day reversal)as it has to deal with maybe a 40-50 bps higher ten year (and oil prices that are still high, maybe $42).
In otherwords everything is going to be shaken up good in October. I am going to use this shake up "big lie" period to get positioned heavily anti-dollar, but right now I'm out of the way. I converted my Cdn cash and many of my Cdn listed stocks (precious metals) back into USD at this level. I've lightened up considerably on my PM holdings, I even sold half my copper stocks: NTO (@2.69) and HUGO (@5.82) and all my NXG on a trading basis. I'm going to keep my March copper futures as they trade in backwardization to Dec by about six cents, but I sold one fourth of my Cu (the Dec) at 142.50. I'm staying long corn, and am especially interested in the 2005 crop year, as I see a major drop in acreage planted given current uneconomical price levels.
As we get the fallout correction, I'll look to reenter PMs, and the out months in Cu. I think I'll use the Aussie $, as it's really lagged the Cdn. If we get the bond rout, I'll even go out an extra year and use the Aust Govt. 6.75 of 11-15-2006, rather than the 7.5 of 7-15-2005.
fxmoneytrends.com
If my Friday call turns out to be the wrong one, I have no problem with moving to restablish my position. I bought some out of the money gold calls as a hedge to getting whipsawed the other way. I'm just keeping my XLF, XLY, IWM, RTH and QQQ puts, impossible to time. |
