Unconvinced

As I keep stating, I am unconvinced. Unconvinced that the credit crunch is over, unconvinced that the Fed lowering rates by 50 bps will solve the housing problem (which is at the root of the crisis), and unconvinced that the recent rally in the equity markets has legs. Perhaps I am stubborn, or wedded to my short position, but I don't think so. The more I think about it, the more unconvinced I become.

For risk management purposes, I entered 2 stop losses yesterday on my HXD position, for 1 unit at 19.90, and one unit at 19.80. The market gyrated between about 19.85 and 20.00 for the first 90 minutes. I thought I had outwaited the volatility, but not quite. My 19.90 stop was hit on the last move down through 19.90, then the stock subsequently rallied by about 50 cents (2nd stop was not hit).

Gold continued to rally so later in the day I placed a stop buy for one unit on HGU at 25.05 but this was not hit. Neither was my "re-enter" stop buy on one unit of HXD at 20.50.

Gold is through $730 today so I am a buyer of one unit of HGU at market (25.39). I also re-placed my re-entry stop buy for HXD at 20.65. CDN market continues to be quite weak and has fallen below my 13,900 upper target that I kept re-emphasising earlier this month. I think this may signal the final top of the rebound rally that began mid-August. Sentiment turned noticeably over-bullish after the Fed announcement. Most bears seemed to throw in the towel and assume risky assets were once again a safe bet. Reminds me of last June.

MARKET POSITION: SHORT EQUITIES (3 units); LONG GOLD (1 unit)