Earlier this week I was looking at the charts and I am convinced we are headed toward 1450 on the S&P 500. This gives us another 10% upside from where we are now. Also this week the Fed announced they plan to extend the length of time that they will hold rates low until 2014. These items make me bullish for commodities and most other investments due to the likely increase in the money supply coupled with recent ECB easing and the chart patterns. Gold should start running on the Fed news but it looks to me that Platinum may start to outperform gold; I still am long gold and platinum and recently increased both these positions.
Once the Fed announced the extension of their policy, I purchased long options on BAC, GLD, and EEM. Due to my net length in upside volatility, my beta has been increasing as more of the out of the money options I purchased go into the money or deeper in the money.
I am running low on cash and I’m not sure I have sufficient cash on hand to cover the increased margin requirements if there was a sudden price drop. This may have the benefit of forcing me to sell on a sudden drop in the market. I should not play with fire and should not reduce my cash any further.
The S&P 500 is up 5.7% so far 2012 and my portfolio is up 19.6% moving my beta up to a lofty 3.5 times the market. My cash is now uncomfortably low at 6.4% while my margin requirement is now at 14.1% of the portfolio.
traderwasteland
mattmarsh
miltonfriedman
rshm02
