Going global

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I ett försök att öka aktiviteten på bloggen, både för min egen del och fler läsare, övergår bloggen till det engelska språket och en ny adress.

http://bullagainstbear.blogspot.com

11 September, 2012

Update 9/11

It has been some time since the last update. It was also a long time since I saw the market as boring as I do today. "Boring" needs to be interpreted in the right way though. It is important to understand that we live in a time with so-called "financial repression". Central banks have gone all in, and thereby controls currently the world's markets. Therefore we have a low volatility environment right now and will probably have it until something goes wrong, which would be a country within the EU get enough of cutbacks, leaving the euro, or central bank activity reaches end of the road, creating inflation and / or rising input prices and falling margins and / or final demand. It's not something I see happening in the next few months and will apply the strategy layed out below until further notice. Otherwise, there is little immediate threat to the economy other than the long-factors that have been in force for many years and treated in many previous posts. These fill but more the function of a cap on growth in general, and for workers in the western world in particular, and are not so much a significant negative for the stock market.

In this environment, daytrading probably needs to be limited compared to previous years. For myself, that means significant reaollocation aprox once a week. A more basic investor should apply a strong focus on minimizing costs and to switch focus to dividends.

Sentiment studies and anecdotal reports suggest a very, if not bearishly positioned, at least "not very long" investors. Although downside ahead will be limited as long central bank puts are in place, the upside will be limited by all the aforementioned factors raised on the blog many times and remain relevant. To make clear how extreme I look at central situation. I think next year the S & P 500 moves within a 10-15% range. Approximately 5% upside and 10% downside. I will act accordingly and work with mean reversion trading.

Directionally (weekly focus), my next activity will be in coming weeks to use dips of 1-2% in major indexes to swing trade the next leg up.

Mean reversion/Consolidition (daily focus), until that leg starts we will probably be stuck in this 1-2% or less consolidition phase.

Hedged bets (monthly foxus), will consist of

a) long short trade in precious metals vs industrial metals.
Some oil will be used for long trading as well but only on unrational SPR- or other rumour related dips.

b) long short trade within tech space, long tech companies with a brand/margins, short tech companies without a brand/margins (to really simplify the strategy, but really, that is it's core).

c) long worlds largest global companies, short more regional ones of same operational focus but limited to (most interesting) Europe.

As a general note on shorting I find it more and more difficult to identify good short sales. There are some in the tech space still though but many, like AMD, LXK, LOGI have already been slaughtered and should await squeezes until new shorts on these or long/short.

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