Still waiting

The situation has improved slightly from my perspective over the past 1-2 weeks. As I forecast, international equities are noticeably weaker. Indeed, the US market is displaying many of the signs of an early bear market. Gold is considerably higher and the USD is much lower. The problem is that I have made little money. Cdn equities, while off their recent peak, have not fallen as much as US equities. Moreover, the gains on my short US equity position have been negated by the large increase in the CDN/USD rate. Gold is significantly higher but gold equities have not rallied nearly as much. AG is 10% higher but I have not yet taken a position (though I still intend to). Clearly I need to work on structuring my portfolio better -- if one cannot make money when one is right, when can one make money?

Despite the strong fundamentals I am wary of entering AG and increasing my gold position at present. The equity market is drifting sideways today after yesterday's sharp fall, indicating that investors remain wary. I think it is best to keep some powder dry for when the (inevitable?) break comes, and hopefully I can pick up some at more attractive prices. I am also seriously considering taking a long energy position. Energy stocks have not increased very much despite the large increase in oil prices over the past few months. Perhaps most investors do not believe that the current period of high prices is sustainable. I am not sure if $95 oil is sustainble, but I think $70 oil is easily sustainable, and this is probably not yet priced into oil stocks.

MARKET POSITION: EQUITIES - SHORT (6 units); GOLD - LONG (1 unit)