Oct 20, 2004

A few ideas

It might make sense here given the weakness in the dollar and the base metals to buy precious metals and short base metals. This trade implies a weakening economy, or at the very least a weakening of Chinese demand for commodities.

It may make sense to short the bank sector or buy bank puts against other positions because if this insurance stuff pulls us down it will be short, sharp, and focused on the banks. Maybe short some GM for good measure as it makes most of its money of GMAC and has got some definite issues in the pipe with this pension investigation.

The put/call ratio is a bit low given the position of the indices. It sure feels like everyone is worried in here but I would like it better if that number were 1.3 rather than 0.9.

Despite the angst we stayed above 1100 which will look very bullish if we manage to bounce.

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