After some excitement last week, it is back to waiting again. Waiting for the markets to finally collapse. Last Tuesday there was a brief moment when it looked like it might happen, but then the markets pulled back from the brink and rallied fairly hard the next 2 days. Despite my concern that a bounce was near, I elected not to cover my shorts. I had set a few indicators that I wanted to see before I covered (sharp falls in 2 yr note yield and EUR/JPY, VIX above 32/33, SPX near 1100). And although all of them started to move in the right direction on Tuesday, they were never close to what I was looking for. This shows that there was relatively little panic amongst institutional investors, suggesting that the bottom is yet to come. I mentioned a few weeks ago that I thought the bottom would come in August or September, I am going to stick with that for now.
MARKET POSITION: EQUITIES - short SPX (5 units); short S&P/TSX (5 units); short EAFE (3.5 units); short energy (2 units); short real estate (2 units)
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