6 replies to this topic

[arbman]

I am going to close all of the short positions by the close today, maybe leave a little for Monday. I will open the following put positions for the short portion of the portfolio in the next 10 sessions or so, hopefully the prices will drift higher from here until the second week of Feb...

10% SPX Mar 1430
15% SPX Apr 1430
15% SPX Jun 1430

10% NDX Mar 1800
25% NDX Apr 1800
25% NDX Jun 1800

Again I will hedge them with the Feb contracts if necessary. But, I strongly believe this is the last chance for anyone to exit their long positions by March or so...

There is a significant slow down coming according to the commercial credit growth, I detailed this chart in a previous post, so I am only posting an updated chart...

For the short term, the securities lending and the open interest picture confirms with the fundamental liquidity outlook. The institutions trimmed their commitments down in the derivatives and the securities lending did not increase ahead of this week's decline, they are selling...

Good luck,
- kisa

Edited by kisacik, 26 January 2007 - 11:55 AM.

[Cirrus]

VXO is too low yet to go straight down here and would agree. I'm only short stuff that I think leads the market down. I started with the homebuilders FWIW and am looking around for other sectors that represent the 'lame and the sick'. I still have longs but not many and they're LT postions. I'm still hoping for a last dose of weakness in the energy sector as we move into spring. I have a growing baske of CanRoys and my average yield their is 20%! I know this sounds strange but soo much bad news has hit the sector so fast that we've had a few months of liquidation from conservative investors. SND/UN.TO, for example, has a 28% yield. Take a look at their presentation and assumptions for CL and NG, their tax pool, drilling prospects, etc and you will find some serious LT value there. A cut in distribution is already priced in IMO in a big way. Heck, I didn't even buy for the yield--I bought for the LT value. It is one of the smaller CanRoys and is NOT widely followed--only covered by a single institution in Canada and I think it's number one on their list--not that it matters. If there's managers here that handle OPM I would recommend doing your diligence on this one and a couple others in the sector. Given SND's tax pool I wouldn't be surprised to see them bought out in the next 12 months--especially if the energy commodity complex begins to turn.

[arbman]

Good luck with your positions... On a separate note, the narrowing spread in between the credit growth rate and the 5yr yields ended up with the significant market corrections. The last few times that it was inverted, the market actually crashed. The rates are so high right now that by the time it turns around and declines, the USD will be much stronger and choke the multi-nationals, the credit growth can actually drop below the 5 yr at that point, this projects around Aug-Oct or so on that chart. It kind of makes sense since it is the anniversary of the correction from last year. There is a good chance that the market will have a significant decline around summer or late summer, on top of whatever it might do in late March around the 20 wk cycle low... - kisa

[Cirrus]

Thanks kisacik..... I really like your chart above and would love to chat with you about it someday. I much appreciate you posting the chart and contributing!

[short_seller]

Thanks kisacik.....

I really like your chart above and would love to chat with you about it someday. I much appreciate you posting the chart and contributing!

I second that. I really really like your posts kisacik.

[pdx5]

Kisa...thanks for taking the time to post the liquidity update. Please keep up the good work. Roberto

[arbman]

we are all sharing a little bit here, enjoy the show...