Market view and our strategy
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Speculatist
Mar 3, 2008, 7:57:18 PM3/3/08
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Hi All,
It has been some time since I sent the group email last time.
It has been some time since I sent the group email last time.
During this time, what I did were mainly the following:
1. Clear all my equity holdings in China A-Shares, as it has been topped and it is in bear market now.
2. Clear all my equity holdings in Singapore market as it is a very small pool which cannot stand alone strong in a big global bear market.
3. Set up several short positions in US and EU markets.
Below are our brief market view and corresponding strategy
1. Global Equity Market
The market was lifted last month due to previous over-sold effect in Jan and Fed's actions in Jan and Feb.
However, we still have strong belief that the equity market is in the midst of prolonged bear market , which is similar to the situation in 2001 , if not as worse as the 70s.
Therefore, the strategy to play in this market is to Short at any good opportunities and hold fire during any rally in the bear market. Whether play daily trades is totally subject to situation. i.e. in cases of takeover play or mini-crash play, day trade might be played. Rest of the time, we will just ignore the daily up and down.
2. Commodity market
We think the commodity market will continue be strong for sometime. For example, Gold, oil and several metals(EG. Nickles), wheats etc.
They are strong not because of strong fundamental, but because of weak US dollar. (Wheat is one exception though)
We will be looking for opportunities to play commodity futures in a very conservative way. (i.e. Long/Short pair to capture the divergence or convergence of the two curves only. )
3. FX market.
Given any good platform , we will be long RMB short USD in some substantial way. That is basically a very sure trend for these two currencies. JPY/USD is another possible pair to play to take advantage of weak USD and stronger Asia currencies.
In a bear market , the best interest is to preserve your capital and fight against inflation before dreaming earning big bucks.
1. Global Equity Market
The market was lifted last month due to previous over-sold effect in Jan and Fed's actions in Jan and Feb.
However, we still have strong belief that the equity market is in the midst of prolonged bear market , which is similar to the situation in 2001 , if not as worse as the 70s.
Therefore, the strategy to play in this market is to Short at any good opportunities and hold fire during any rally in the bear market. Whether play daily trades is totally subject to situation. i.e. in cases of takeover play or mini-crash play, day trade might be played. Rest of the time, we will just ignore the daily up and down.
2. Commodity market
We think the commodity market will continue be strong for sometime. For example, Gold, oil and several metals(EG. Nickles), wheats etc.
They are strong not because of strong fundamental, but because of weak US dollar. (Wheat is one exception though)
We will be looking for opportunities to play commodity futures in a very conservative way. (i.e. Long/Short pair to capture the divergence or convergence of the two curves only. )
3. FX market.
Given any good platform , we will be long RMB short USD in some substantial way. That is basically a very sure trend for these two currencies. JPY/USD is another possible pair to play to take advantage of weak USD and stronger Asia currencies.
In a bear market , the best interest is to preserve your capital and fight against inflation before dreaming earning big bucks.
Have a nice week ahead!
Speculatist
2008/03/04
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