turned bullish at the wrong time

Close Treasury shorts at 3.16... the worse than expected jobs report was enough to break the 3.30 resistance. I also thought long fixed-income was quite crowded too and deflation was ALREADY expected. I am starting to get bearish on Treasuries, but the downward pressure in yields could run for a week. I think 2.90-3.00 percent are fair considering the amount of yield volatility these instruments have.

I'll get long during earning season... and then short, depending on how much the dollar rallies, that will determine the size and aggressiveness of the 4th Quarter short.

Add 20 at 1.161 USD/AUD



So we are very long the dollar.

Edit: add to short SPY at 103 at 35%; my hypothesis is that we need a bear trap at lure more shorts who think it will go to 90 or 80... then we go long during earnings season, and then short and a dollar rally would be at our back.

short december oil at 70 at 20

German government bonds at 60

USD/AUD 60
EURUSD 60
GBPUSD 60

SPY short 35
Gold short 20
Copper short 30
oil short 20

Edit 10/3/09... take back S&P short... we will go short after earnings season. I didn't know earnings season starts October 7th on wednesday. That is not enough time to allow bearish sentiment to develope.

9.30.09

New positions... close short stock position at 106.00

Add 160 short Treasury position at 322.

Also consider going long stocks at opening to the tune of 40%

Let's add 60% in German government bonds.

10 year
60& US Treasuries
60& german gover (hedged) at 3.38%

Starting over...

I want to start over... I did not like the fact that I started the experiment when the market was about to turn and had a very bad start. Ironically, I actually knew the market was going to turn, but I was reluctant to hold on to a long position because I did not want to speculate. The losses from currency trading made me more risk averse instead of holding. However, in hindsight, I was surprised at this rally's strength. I thought it might be one of those 25% rallies that happened during 2000-2002.

Right now... people will not be optimistic or even bullish, but the frustration from bearish traders would keep them out of the market.

This will at least change my psychology as i would not be trying to dig out of hole (let's say I am only down 4% now). From this perspective, I would not be frustrated. The starting over is to simply refresh my own mind.

Same positions though although initiating them now.

EUR/USD short 1.47 60

GBP/USD short 1.64 60

USD/AUD 40 1.14

gold short 1016 20

copper 2.94 30

US treauries 10 year. 3.46 70

SPY short 65 107.10

Preliminary calculations

About a one percent gain...

About a 2 percent gain in government bonds and 2.4 percent in currencies.

2.4 percent loss in equities and a .9% loss in copper.

Also add another 15% in copper at 2.93.

short copper again

Luckly I avoided at 9 cent move by covering. short copper at 2.76 (let's say december) at 15%.

accounting losses

We'll start from the May 28 positions

Total losses

Currencies:
-GBPUSD .3 * (1.44/1.394 - 1) = 97bps (open)
-EURUSD .6 * (1.69/1.625 -1) = 240 bps (open)
NZD 140 basis points

Equities:

-SPY .8 * (100/97.5 - 1) = 200 bps (open)

Commodities:
Copper .25 * (267/239 -1) = 292 bps
Silver .2 * (1 - (13.90/14.93)) = 137 bps

Gains:
Germand bonds 282 bps (from 3.65 to 3.31)
oil 180 bps (71.25/62)
short treasuries 160 basis points (from 3.48-3.68)

All together 5 percent loss. (A 5% loss in two months isn't that high).

New positions (close german goverment bond short (no gain no loss 3.31 to 3.34)/ long treasuries 10 year Treasuries at 3.64 at 120%) (Bernanke may print money again and Treasuries may rally so we need a larger position to hedge the dollar longs )

Tommorrow we short copper.

The RALLY WILL END SOON. I regret betting against it too early. Finally the Darwinian flush of the Bears is done! The breakouts of the Euro, pound, equities, copper show a blowoff high much like oil at $147. The former two had very strong resistances at 1.43 and 1.65 respectively. It feels like euphoria, much like the top of the NASDAQ bubble.

positions

- SPY 80

US 10 year Treasury 120

USD AUD 40
-EURUSD 30
-GBPUSD 60

- gold 20