Trade ~~~

Given that I see:
- Stagnant global growth, at best
- No QE on the horizon, and no hint at it in next week's FOMC meeting, except to say that the Fed still has the capacity to act should the need arise.
- A deteriorating situation in Europe
- Silver has farther to fall than copper, even though copper still has room to sell off

Short QI (silver) at 31.35.  Not too much leverage, and I may keep a tight stop on it.

Update 1: I hope I didn't make a bad call here, but I decided to exit at 31.325 - it just looks like I'll be able to short at a better price (didn't I keep saying that about copper?).

Evaluation and Outlook

Evaluation
While I am up for the year by about 50%, my performance has been sub-optimal and I need to find out why, and then correct as much as can be corrected.
The key driver of my trading strategy over the last month or so has been risk-minimization.  Unable to afford losses, I've restricted the time I've held on to a given trade.  While copper, et. al., have been range-trading the last few months, I did well.  That changed in the last week when the correction that I had been waiting for kept moving prices lower.  I missed the move at 3.80, 3.75 and 3.67, worried about a snap back.  As far as its fallen now (3.64), I can't see entering another short until I see some short covering by others.
Silver, EUR/USD, AUD/USD, ES? also look like interesting/potential shorting opportunities, but again, I would prefer to wait for short-covering / dead-cat bounce before entering another short trade.

I have a feeling I need to remind myself of Rule #2 again:  If you don't know, you don't trade.

Outlook


U.S. - should continue to muddle along.  Not too much better, not too much worse (without an exogenous shock, e.g., Iran, Europe).  I don't see blowout earnings again, but I don't see big misses, either.

Europe - Only a matter of time (but this could be many months more).  The last few weeks have seen a notable deterioration in pretty much all European equity and credit markets.  PIIGS deficits and debts are simply too much given the backdrop of declining GDP.  Would you loan them money?  At any rate?  I didn't think so...

China - Economic data will continue to surprise to the downside and monetary policy easing will not be as aggressive as the market is hoping for (this is why I am so enthusiastic about shorting copper - timing is the issue, though.  The market can stay stupid for longer than I can stay solvent).  Michael Pettis gives very convincing reasons to think that growth for the rest of the decade will be even weaker than the hard-landing crowd thinks.

Iran - Its hard to imagine that all the American military hardware moving to the Persian Gulf is anything other than a message to Iran that this is their last chance to open up for regular inspections and agree to create/use only low-enriched uranium, etc., etc.  At the same time, I think Obama is more worried about his re-election and won't want high gas prices going in to November -- then again, there's a pretty good historical trend of sticking with the CiC while at war...  I would put the odds of Iran seriously backing down at about 25%; odds of Iran throwing the US a bone at this weekend's conference (and the next) at 65%; odds of the bone being good enough at 25%; odds of an Israeli strike within 6 months at 51%; odds of an Israeli strike within 12 months at 75%.  Yes, I just made these numbers up.

:-(

This was a frustration trade.  I completely missed today's selloff in copper and tried to get in too late.  Short-covering has me worried, so I did not leverage too much here and did not want to stay in too long.  I think we still may be in correction-mode, but the market may hold up here for right now.  Hopefully, I don't sleep through the next big move, lol.

Short HG at 365, closed at 366.  Loss of 3.5%.

btw, this ends my longest win streak at 6 in a row.

:-/

Again, I don't like this very-short-term trading, but its hard to have any conviction in either direction at today's levels without more data.  I'm not ready to make a call just yet.
Instead, I traded on today's news of higher than expected Chinese CPI.  That brings doubts about how much monetary easing China will do, and when.  But for right now (after the market collected its collective head), it looks like copper will simply follow risk in general, so this was a very short-term trade.

Short HG at 378.80, covered at 378.20.  Gain of 2.4%.

No New QE Near-Term

As I thought, the Fed minutes released today showed that unless growth slows or inflation falls below 2%, there will be no new QE (for now).  As such, I shorted copper (should have shorted silver, but didn't have a window up to do so at the time).

Short HG at 391, closed at 386.95.  Gain of 13.5%.

Range Trading

Copper (et. al.) continue to trade in a range, so I'm going to continue to range trade them.

Short HG at 386.20, closed at 384.20.  Gain of 7.3%.

Still Scurred

Copper is a little unpredictable right now, so I shorted another range-bound product, again using less leverage.

Short EUR/USD @ 133.21, closed at 132.76.  Gain of 5.7%.

Scurred

I wanted to short copper last night, but it kept falling so fast that I thought I had missed the boat...so I missed the boat.  Instead, I shorted something that hadn't fallen yet, and made a small fraction of the gain I would have made by shorting copper.  I still think we're going to see weaker than expected Chinese growth, which means lower copper; its just a matter of when to get in a short.  I still think there will be good opportunities for doing so.

Short QI (silver) at 32.20, closed at 31.85.  Gain of 4.7%

The market has gone full retard

Bernanke's speech today ignited market expectations for more QE, when in reality it appears he was only trying to tell the market that tightening is not on the table (accommodative monetary policy until end of 2014, when the Fed Funds futures were pricing it in before the end of 2013).  I'm always reluctant to move in front of a moving train, and I don't know how long the market is going to be in full-retard mode (where bad is good because it means more QE, and good is better because there won't be any monetary policy tightening anyways).  I'll update this post if I think there's a short opportunity tonight.

Update: Well, I made what would have been a money-making trade, but unfortunately, I put on too tight a stop. I almost perfectly called the top, lol.  Short HG @ 387.70, stopped at 390.25.  Loss of 10.8%.

Trade 5

China HSBC Flash PMI figures, particularly New Orders, came in well below expectations.

Short HG (copper) at 384.55

Update: To protect profits from a quick snap back, I put in a stop order at 382, which triggered.  I'll probably get back in soon, I think this has some room to run.  Gain of 16.2%.