Tuesday, September 23, 2008

Rebalancing The Twins

The first short position on oil was at US$139 (June 8, 2008), the double up position was taken at US$119.90 (August 5, 2008). The shorts were covered at US$112.90.

New positions (August 19, 2008)
Long oil futures $113.20
Long gold futures $802


The time has come to neutralise the oil position and take a small gain there. While I was bullish on oil, it was too much linked to the movements in USD.

I am very bearish on USD but I am more bearish on the destruction of demand from recent events. The liquidity injections from various central banks are good, but may not push oil past the US$115-120 region.

Sell oil futures $117.80 (gain 4.7%)

However I would be doubling up on Gold exposure. The destruction of wealth, and the reinjection of tons of liquidity by all central banks will stoke inflationary pressures again. In particular I am very much keen to be in real assets in this kind of era. I believe gold can even break US$1,000 this year and is headed for higher grounds. Key words, real assets.

Long gold futures US$900.60

(Double Long position in Gold with average price 900.6 + 802/2 -=

p/s photos: Pace Wu Pei Ci


see said...

For oil to go back to its peak of $130-$140, you need those speculators back in. And with deleveraging going on & with a lot of speculators got hit by oil & commodities crash I doubt oil price will go back that $130 zone anytime soon.

successis said...

take a look at natural gas as well mr.Dali, and nevertheless, AUDS!!


ru40342 said...

Dear see,

With dollar going down like raining cats and dogs, speculators are always to ready to shoot the crude oil price all the way to the moon.

Dear Dali,

You really should cover the currency cause i think here's the real place ta make money now. Here's what i get starting from Monday:

USD/JPY: down 185 pips.
Euro/JPY: up 126 pips
Euro/GBP: up 89 pips
USD/CAD: down 203 pips
AUS/USD: up 98 pips
EUR/USD: up 326 pips

Imagine how much money you can make since the leverage for forex trading is 90% or more.

You can easily make 100% return in 1 full day of trading.

Salvatore_Dali said...

dear all,

I have a rule in not revealing my trades. I have chosen to reveal OIL and GOLD because I believe these are the critical elements in deciphering the markets this year, and maybe next. Hence I put it up to help readers understand my views and strategy, and its impact on global equities and bonds. Its not meant to be a whoopie-doozy portfolio. I am not Bill Gross or Buffett.

Yvonne said...

Dear Dali,

Provided that you always make consistent winning in commodities, otherwise isn't it an issue since the USD will depreciate?

Hope you can shed some light here.

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