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11/02/2010 - Market a la mode

 General:

  • Nothing has changed. People are still sipping the kool-aid, expecting that a GOP sweep and $2T QE2 blowout. Neither of these things will happen, and that will send the markets down for a much needed correction. Everything is just a little more extended than it was from yesterday’s post. 

Macro

  • The global recovery is still in effect, with Australia & India raising rates today. With so many countries raising interest rates and commodities on an insane rally (cotton hit the highest $ price since the Civil War), the Fed will have to word their statement that much more hawkishly. It will probably be something along the lines of $100b-$200b with ‘more if needed later’. 

Positions:

  • Long CYB(Yuan)
  • Long EWV (short japan)
  • Short XLK 
  • Long SH (Short $SPX)
  • Short COF


Disclosure: Long CYB, Long EWV, Short XLK, Long SH, Short COF