Friday, 10 April 2009

a quiet week and some thoughts from friday...

L: 20% S:19% G: 39% N: 2% ~ $D -3% $G 23% $V 0% $P 1%

The Raven has paid the price for being short this week, although thankfully in not too huge a size. He's paid his theta for this view and now its a bit of a question of where to next? The media coverage is unrelenting in its bullish call that everything is all gravy now. Wells came out with some good news on Thursday at it put the financials in a frothy storm. Although the Raven has said before that they were priced to move and if good news did start to come through we'd have a rally he's not participated as much as he should have because of his overally view on the whole market, alas he's feeling slightly frustrated with this situation and its stopped him from increasing his exposure in fear of chasing the market.

Interesting to watch Hank Greenberg talking on NBC yesterday, well not really interesting as shameful. I don't understand how the man comes out with the majority of his spiel with a straight face. He seems to believe that AIG's counterparties should have faced a haircut and that the government should reduce its stake giving it up to shareholders. You can't bitch about losing a fortune in a stock when you ran the company for 40yrs, who gives a toss if it was huge 3years ago, it had way too much risk and it blew up, your $$s are gone Hank and if you fail to grasp that equity holders come last in a liquidation then you deserve even less than zero back! The irony was that he thought it appropriate to comment on the mismanagement and the poor business model, ahem... the Raven has two letters for Hank, FP. oh and deal with it, its not like you were going to get to spend it anyway, oh and before the Raven forgets, why did you leave the company again?

EUR/USD is at a very interesting level and could provide some short term alpha at the start of the week. It appears to be struggling to break the 200d resistance line and one would naturally presume we'd retest the 1.24 bottom, saying all of that, we're right back to the level were Big Ben Bernanke Bazooka'd the dollar. The USD also seems to have lost its 1:1 correlation with the SPX at the moment.

The Raven is looking at the oil majors as XOM looks very cheap given the current rally in risk assets, that oil looks to be averaging $50 and if the 'buy risk' trade is really a signal we are through the woods then he'd imagine it shouldn't be too long before the demand for oil increased. Saying that there seems to have been a decent inventory build up (although the Raven needs to put some numbers and historical context on that), the OPEC wild card, etc. Its interesting that OXY has rallied far more, as has CVX and the biggest perhaps defensive stock looks cheap. This fits with the trend of sector rotation that he's witnessed over the last couple of weeks, VOD, TSCO have got panned on a relative basis, even though they look pretty decent.

We shall see how far this rally monkey goes, although his trader's gut says we should at least have another retest, just for japes at least, saying that the risk rally has rather winded that trader's gut.

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