Sunday

TheInflationist Weekend Summary: 170509

Post a Comment May 17, 2009 – 1:00 pm |   | Permalink |  Print This Post |

Markets finally made a move lower after nine consecutive up weeks - a gain of 33.4%. The Dow turned from 6480 to 8650 (2170 points) in a solid move with a few one-two down days. So far all the pullbacks within this strong rally have not been tradeable declines. Our targets for the Dax of 5000 and ASX of 4000 were not achieved (China broke the 10000 and since then have pulled back). We had a turn date of 19th May, perhaps markets could surprise us all by one more push higher before heading south. It is hard to trade at this level.

We took profits in Giralia and Cooper Energy last week before this decline - lightening up all our Euro/GBP positions too. We are still long Agriculture and Natural Gas, and look to hold this for the time being.

We reviewed markets over the weekend. European Union is beginning to show cracks in the Economy - with Germany leading the way: unemployment of 8.9% in April, GDP -3.8% for the quarter (largest decline since 1970). With 1 in 5 jobs in Germany within the Motor industry, it is no surprise that it will be taking a hit if conditions do not improve. The relative strength of the Euro against most other currencies is a flight to false safety. We are shorting the Euro against the Kiwi dollar, and look to reestablish our Euro/AUD when it goes above 1.82 (our exit).

We spent our weekend reviewing stocks in the Australia 300 - and have identified a list of stocks worth reviewing based on a few criteria: close to 52 week low, high dividends, low PE, Stay tuned as we present our findings over the course of the weeks.

TheInflationist Weekend Summary 170509