Quick mid-week post

Quick mid-week post to update thoughts and trades. As I stated last weekend, I had become very bullish. The price action on Monday/Tuesday convinced me that we were building a base so I put most of the rest of my cash to work. On Monday purchased more SPX, and on Tuesday morning purchased more Cdn equities, gold equities and went long the C$. All of these looked very oversold and ready for a major bounce. The commodities downswing in particular was way overdone -- I had expected oil prices to fall to about $80, and they went to almost $60! In terms of the broader indices, there seemed to be about an even chance that SPX could fall by about 10% (to its 2002 low) or jump 20% higher. Those are pretty good odds that one does not see very often.

As it turned out, I was luckly in my timing, as the market exploded upwards late in the day Tuesday. Certainly did not expect that! And it made me a bit uncomfortable, as sustainable rallies generally do not happen like that -- they are slowish grinds upwards. When the SPX was up almost another 3% yesterday afternoon I was about to sell, but then the market collapsed in the last 15 minutes, so I held off. Ironically, the decline actually made me feel better, because it showed that there is a lot of nervousness out there, which is important for the rally to be sustainable.

All in all, it's been a good few days, and my portfolio is up another 9% since last Friday, and is up 34% since the end of September.

Market positions: EQUITIES: LONG CDN EQUITIES (3 units); ENERGY (3 units); SPX (5 units); EAFE (2 units); GOLD (2 units); CDN$ (2 units); CASH (1 unit)