Back to Deflation,Austerity, and Inflation……Update: Watching Dimon
With the markets in the top half of their recent trading ranges we took off the long gold side of our total position yesterday. Since May 31st when we went to the long gold/ short S&P position our equity has risen 2.7 %. During that time gold was up 2.8 % and the S&P is up 0.8 %. Now we are essentially sitting short S&P at the 1316 level, not a bad level but at the same time not a level that gives us a big edge in the trade.
In a sense I have let myself be drawn into the drama of Europe and the Fed and have mixed emotions about how wise that is, being totally flat would be safer but then one tends to lose the feel of what is unfolding. If you are looking for more input, the article below does a good job of evaluating the situation:
Update at 10:15 AM : It is interesting, not surprising, that whenever a Republican Senator asks Dimon a question this morning that the Republican less regulation spin rallys the market a little, and likewise when a Democratic Senator talks about a stronger Dodd-Frank rule, the market backs off a little. It is obvious that the so-called “market” still doesn’t get it, it wants to go back to pre 2008 and set up another crash. For me it is one reason that I don’t see the long-term bottom as being in place, ie the market still has its head on backwards.
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