I sold my Dec Aussie this AM at 73.18 (in at 71.95), and added to my Dec 5 year Treasury short at 111.12. I'm still long DEC Yen (in at 91.22), and holding on to my fundamental longs May corn and March copper. Stock market looks to me in very serious trouble, I'm staying short via my put purchases, although may lighten up some on XLF if it's real weak this AM. I'd like to see implied volatilities expand, so I could shift more to naked call writes.
Rationale (or more accurately SWAG) is this: Keeping Yen at least through the weekend, in case there is a surprise Chinese re-peg. Asia is under huge Train Wreck stress right now, note big overnight market drop in Korea, etc, they desperately need a new higher currency level. But, I doubt if it would happen after Monday Oct. 25 though, just too close to the US elections. If it comes, will happen over next five days IMO.
The US branch of the MoP needs to shore the USD up now, too many stall lights (gold!!)going off, getting serious. And boy, oh boy, printing money now is NOT the answer, will watch the real time permanent and monetization numbers. Seems like these clowns think the answer to higher oil is print more money, is that their bogus modus operandi? I'm not sure, but actions speak louder than words. Since they don't have fundamentals, they'll try manipulation and BS. This may work now, because of the way specs are positioned. Bogus 3Q GDP numbers on Friday Oct. 29th, may be the trick. I think a marginally successful attack on oil will also be part of it. A Kerry election might also temporarily give the USD a boost.
You'll remember that last week we very briefly discussed the potential for nominal and real GDP growth in 3Q. The upshot being that since the GDP deflator (measure of inflation) is absolutely set to fall in 3Q relative to 2Q, "real" growth rates are going to be higher than what was experienced in 2Q. It's simply pre-ordained by the simple math. There is no question that in light of very reasonable retail sales growth in September, both "real" measures of consumer spending and total GDP in 3Q will be favorable. If we were forced to guess, when reported, 3Q GDP has a shot a coming in near 4.5%. At worst, probably 4% or better. |
