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

USDAUD at 1.19 40% of NAV. Close All of the German government bond position at 3.31%


Establish short positions in German government bonds at 3.31 100%.

Cover copper position at $2.66. This is a 282 basis point loss.