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Wednesday, 21 March 2012

S&P Trading at 1700?

S&P 500 Trading Higher

The last month or so has seen the S&P grind slowly higher amidst incredibly low volatility. The VIX touched a four year low earlier this week as it closed below 15, and all the while the S&P is only trading in one direction – upwards. A recent forecast had the S&P reaching 1700 by year end, which would certainly put it at the top of the range of estimates, so I thought it’d be worthwhile to take a look at how the S&P could possibly take out such a high level in just 9 months.

Sunday, 11 March 2012

Uranium Prices Going Higher?

What’s Driving Uranium Prices?

Uranium prices used to be the talk of the town – the commodity with perfect fundamentals and massive profits from those trading uranium miners – but in more recent times it’s practically dropped off the face of the earth. Or is less advantageous to remove anyway. The price skyrocketed from $20/lb in 04/05 to $135/lb in 2007, but was crushed during the global financial crisis, and then again by the Japanese disaster and investors shied away from riskier commodities. So is this the end for the uranium mining companies? Just because they're always impressive, here's the Ranger Mine in Australia.

Friday, 2 March 2012

Gold Price Volatility

Gold Price in a Liquidity Trap

The gold price was in focus this week, recording some unusual volatility levels, and giving trading models all over the world a good workout. Front month volatility in equity markets is grinding lower once again, although the later months have shown no signs of declining, suggesting the market isn't rife with complacency just yet. And why would it be? A liquidity vacuum on Wednesday drove precious metal prices lower by 5%, but if you were caught in it at least be reassured by the fact that it no doubt hurt Paulson far more than you.

Tuesday, 21 February 2012

Nikkei outperforming Australia

Nikkei to outperform 

Finally, after many months of Europe toying with markets, Eurozone leaders reluctantly decided to bail out Greece. Or at least that’s what they want people to believe – that this can’t continue, bailouts aren’t to be taken as standard, moral hazard etc etc. In reality, a bailout was always likely to happen, as the panic that would sweep through markets if they believe larger nations such as Italy wouldn’t receive funds would be crippling. They were lucky to get away with relatively minor reductions in future interest payments, though they’d have you believe they were tough enough to avoid real concessions that would create a bad precedent.

Wednesday, 15 February 2012

VIX set to Spike

VIX to Increase Short Term

For those that don’t know, the VIX represents the implied volatility expected to be realised in the S&P 500 over the next 30 days, and is also known as the ‘fear index’. For those that already know this, you’ve probably had a few fearful days trading the spikes recently, as the mini contracts as about as small as Jeremy Lin.

Sunday, 12 February 2012

US Inflation Waiting to Spike

US Inflation Waiting to Spike

Apologies for the lengthy delay between posts recently. Relocating can be stressful at the best of times, but all should be well now. Apart from the medium term US economy that is. The world has a history of overlooking signs of impending doom, and whilst US debt levels aren’t doomsday material just yet, they certainly have the ability to cause a serious problem if they are not reigned in soon. The amount of money to be made in the US economy as a trend follower during the GFC, as supposed to a blindly optimistic follower, was phenomenal. I would have to kidnap John Paulson every single day for the next four years (to get his kidnap insurance of $10m) in order to make what he made during the GFC. A background is here for those that want it.

Tuesday, 31 January 2012

Trading Blog Update

Trading Blog Update

Although the purpose of this trading blog isn’t to have people buy everything I’m bullish on and sell everything I’m bearish on, many seem to find it useful to keep track of what an author’s trading views are at that time. Therefore I always try to list a couple of things I’m buying or selling at the moment (or looking to be), but I try not to include size of positions, risk element, profit expectations etc – just a broad overview to be taken as hearsay and nothing more. Regardless, I thought it might be good to take a quick look back and see how some of the early calls have gone, and where they might be heading: