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EFT Portfolio April 18 th. 2011

Equities
Markets look increasingly over stretched and while analysts seem to favour the equities to everything else it fails to reach new highs. This combined with the Greek interest rates breaching 14% and Finland looking more and more like they will vote against a Portugueese bail out, might be the straw that breaks the camels back.

Technical indicators are still neutral on major markets, but I noticed that banks have turned bearish. this is often a sign of things to come. Also, if markets close lower today it will trigger a lot of bearish signals in both EU and US indicies.

Bonds
Inflation linked bonds in both Germany and US have given buy signals and I have entered positions of 1.5 time normal size. However I am not sure this trade will corolate well with a faling stock market - Except in a stagflation scenario.

A restructuring of Greek debt may trigger a major drop in EU rates, rather than what would be normal - an increase. The logic being - All the bad news is now in the price.

I am heavily overweight bonds right now, but mostly due to the lack of alternative places to park the money.

Commodities
Still long Gold and Silver. In case of country defaults on debt these assest will tear the markets appart and be viewed as the only safehaven out there. While expensive and very dangerous to go into I would consider increasing current positions if anything like that happen.

Copper broke down again and is back in neutral mode along with Oil.