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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: studdog who wrote (9575)	3/6/2004 2:23:45 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Thanks for the explanation, Mish. I understand your reasoning and compliment you on your prognostication. Now I am very curious how you are positioning yourself. You were out of gold if I recall, but are now back in, correct? What else are you doing? Thanks Karl I am enormously leveraged in Eurodollars and Euribors (Interest rate plays in the US and Europe respectively). Contract highs were set on some of these on Friday. I added more Euribor futures on Thursday and Eurodollar futures on Friday morning just ahead of the numbers. I bought a Euro future on Thursday but unfortunately chickened out of it and actually bailed for a small loss (silly me). Instead I decided to play gold but with calls rather than futures. My theory was that jobs were going to suck and to make it even better they were overhyped going in. If jobs sucked I expected Eurodollars, euribors, treasuries, gold, and the Euro to all go up big. I was unsure of what the equity markets would do but my guess was a big whipsaw (and that proved correct as well). I was staggered at how badly they sucked. I should have immediately thrown every available cent into Eurodollar futures but I had a huge position and just watched it go up. I have a far far bigger position in euribors and eurodollars than gold. On thursday I bought two gold calls, one front month ITM, the other AUG OTM. The ITM call on gold futures was for April (it expires in March so I took that off on friday for a 50% gain). Holding the other one (I have a second one still that I am underwater on, but the last two are green). I have been recommending shorting OOTM eurodollar puts on pullbacks, and buying Euribor futures or calls (DEC05) on the latter. Right now, Eurodollars are hugely extended so I can not vigorously tout them as I was earlier. I still Like Euribor a LOT. In fact, that would be my #1 investment right now. I think Europe cuts in the next two months. Europe "recovery" is much much weaker than ours, inflation is lower over there, and they are hampered by a strong Euro to boot. Not the bargain they were last month but I still think they are a no-brainer. It's not where they are but where they are going that is important. Europe is still priced for rate hikes when I am convinced more than ever that cuts are coming. I am having problems with this link right now but it will show Euribor future prices. Click on the chart of the Dec05 Euribor to see a nice strong trend. futuresource.com Mish