Its All About Risk Now

The market now has its base numbers for the pre-austerity period.  It will probably take about three months for the austerity effects to start showing up.  The corporate CEO’s have now bought into a recovery mood, that is a significant piece to add to the increasing risk scenario.  Bernanke has laid the framework for a fragile system, now we can watch it its unraveling over the next four years.

The question for me now is the T-Bond market and gold.  We have been short gold for a long time and that position has helped to cover our short stock position.  Now we have to decide whether or not to get rid of the short gold side of the trade. 

The short T-Bond position that we put on last summer and got out of recently is also in our cross-hairs.  After we covered our short bonds a few weeks ago they rallied four points and now as of today are back down to where we covered our shorts.  So do we reinstate our shorts or watch.  I don’t know at this point.

Leave a Reply

Your email address will not be published. Required fields are marked *

16 − one =