Another busy week albeit as price consolidates in a near term top formation providing us time to select the currencies and short targets to best profit from the near term correction.

Some instruments have already provided large profits to those who did their homework correctly. On the forum pages we picked out the euro cyclical stocks as being the likely best short targets and indeed in both and fx as well as movements in their own currency they have been the positive beta to the short side of the market falling by around 15% from their highs thus far. Assuming you got the currency and short target selection correct. Certainly the various currency spikes in the Euro vs JPY and GBP as well as spike in euro cyclical equity themes looked like a blow off top and the subsequent moves have proven those that provided that theory correct. At least in the near term.

Looking ahead we are looking for this price distribution to continue and setup for a near term correction of up to around 5%. Markets have a habit of surprising us and not behaving as best laid plans suggest. In my view a deeper correction may well occur but this would set us up nicely for a spring summer powerful bull run.

Here below a few reports and charts from the week past.

Here a couple of insightful reports from Standard Chartered.

SC-Weekly Market View – 01 Feb 2013

SC-Global Market Outlook – February 2013

Fx continues to play a major roll in providing the + beta to equity returns.

In euro terms the dow and ftse100 (and many other indexes have gone no where in the last 9 months).

 

 

And here the nik225 vs the ftse100 measured in pounds.. surprising perhaps?



The Dax funded by borrowed yn vs the euro has been the + beta trade +160% in 9 months!

 

 

 

 

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