Lately I've felt like a kid in a candy store (easy trades in a bull market).
The US economy is the place to be and you're seeing it in both the market prices and the data points. Today's ADP payroll numbers came out as a whopping surprise to the upside, and although the ADP number isn't usually looked to as a great economic indicator, you can't ignore the huge number that was posted. Expect a similar increase in employment figures due out at the end of the week, Friday, and the UE number to ratchet down a tenth or so.
What I love most about our economy right now, is the confidence it's displaying. Money is flowing out of conservative assets and into new avenues of growth and risk. Interest rates are rising as money comes out of bonds and into equities (Long TBT). Gold is DIEING and I love it! GLD just broke the 50day moving average today, and expect about a 5-10% move to the downside until it finds support around 1240 on the 200 day moving average. Now I'm not saying the gold trade is over, but I am saying it's not the place to be anymore. As money flows into equities and other risk assets, why stay in a position that is exhausted on the buy-side (minus central banks adding to their positions in the future), and doesn't pay a yield to be in. Also, the fundamentals for being in gold (inflation/deflation, safe haven, etc.) are dwindling. Find the next emerging investment instead.
Note: Small corrections should be expected, especially after the huge run we've seen in December and now January. So be careful with your buy-ins, let the market come to you, and buy on dips for 2011.
GGB is breaking out nicely after a couple weeks of indecisiveness. Long HK, MU, PBR, TBT, TUR, UAL in trading account. Some have been working. Some may not work.
Eyeing metals and ag names when they finish pulling back due to profit taking.
Trade on my friends,
AF
Do the non-farms jobs numbers that came out friday change your confidence?
ReplyDeleteI love how you hate gold. I will heed your advice and look for other emerging trades though. (I still secretly love gold bullion and will buy on the dip... not GLD)
I see with those long positions that you're still long oil and industrial commodities.
MU is a new one to me with semi-conductor devices. I don't know much about that sector.
Love the TBT position as I see yields have to rise eventually.. and they already are.
So I guess my only question was the first one... Are you guys still bullish with the not-so-great jobs numbers that came out?