The 2008 market meltdown and rebound from early 2009 to now has been difficult for many traditional fund managers as asset classes have been increasingly correlelated – meaning prices tend to move in the same direction together. In fact there is now more use by mainstream funds of hedge fund type strategies, sometimes called Long-Short or Global Macro than in the past. This is definitely a trend that is set to continue.
I have used a defensive strategy of taking less trades on average in 2010 than in 2009, but with many markets on the cusp of breaking out a more agressive approach is appropriate for the remaining part of 2010 – suitable as traders return on Tuesday after the long Labor Day weekend. Although 2010 has been challenging trading wise, the last 4 months of the year usually produce some very nice moves in markets – the recent rise in Gold to about level with historic highs indicates markets are generally at a significant point here and this increased interest will drive cashflows into the market that are currently sitting on the sidelines, so moving not just Gold but currencies too.
News to note since last posting this years:
Coffee (NY) – moving to new price level/value area over 170-180 from support at 130 – await sell off
Grains – moving higher on weather markets and Russian export controls – Buying
Stock indices – drifting higher/slightly toppy but only a year and a bit into cyclical bull market statistically
Metals – Gold moving/about to move to new highs; Silver just under $20, risk of sell off
US Crude oil – Trading sideways/ranging between high 60s and low 80s – no direction/trend
Euro – recovered from a deep sell off to 1.2000 tested above 1.3000 now risk of sell off on weekly chart basis
Aussie – Was toppy and now is testing those overhead resistance levels – to buy if breaksthrough 0.9400
Recent trade;
Gold Bugs Index near highs:
