Chart update

 

Time for change - this very long term model which is giving out WARNING SIGNAL....and it has been good before though it takes some time (and P&L pain) to get there...

 

Kind of interesting to check this chart out - the signal? Lower rates tracks stocks......lower - and this is the key part of the present malaise: Low rates for extended time is function of economy not allocating correctly - maybe it is absolutely perfect timing the Nobel prize in Economics was given to 'search theory' markets which does not clear out!  (Nobel Prize interview)

 

Gold - ETF- GLD: looks like to possible correction - Gold, although not a bubble yet, is clearly overbought and overowned by spec-society.

 

My biggest position - time to take profit? CPI later this week?

US Dollar likewise - QE2 has been priced in at 2-3 trl. US Dollar already - recent local Fed speak indicates it is still going ahead, but both the impact and size is still being discussed....

 

Unusual for a Tuesday there seems to be some early sign of RISK OFF post the Chinese reserve requirement increase, also watch for Foreclosure Gate to hit the banking sector - its a big mess getting worse....


Winston

Performance Index

Tuesday March 23rd, 2010

Inflation: -1 bps
Benchmark: +28 bps
60/40: +37 bps
Doom/Gloom: -137 bps
Old Style Macro: -155 bps

The Old-Style Macro got hit pretty hard:

Clearly the RISK ON environment took over despite the uncertainty on the Healthcare reform, the one divergence being gold which continues to be weak relative to other assets. We see gold as leading indicator so we have some believe in bigger correction today Tuesday after the usual ALWAYS-UP Monday.

(Click on chart for bigger version)

For the day ahead I remain:

Short GBPUSD; EURUSD, equities through options, and long 10 y notes.....

CPI from UK biggest data point today .....

Strategy: Observe the final push higher in stocks and sell into US open - and for Gold and EURUSD, close below 1094 and 1.3500 could explore further downside - main bearish and biggest view remains: GBP in 1.4200 ish and soon.

Winston