Thursday, May 25, 2006

More Volatility

Today was another volatile day in the financial markets. Gold fell - obviously the wave 2 correction I disucssed yesterday is not over but with any luck this is the lowest point it will reach for now. If my new interpretation is right it would be a good trade to sell any short-term rally in gold. Stocks fell and rose and fell and ended up... Bonds rose and the yield curve by one measure is again inverted. The US Dollar strengthened again. But recent action in the dollar looks to me like a corrective wave or consolidation before the next fall (I think the same on stocks too).

And yes, my net worth is now down for the month. Investment performance is -0.5%, which is still much better than the the MSCI index's 4.5% loss (losses for other indices and stock mutual funds and similar or greater). Heavy spending on the trip didn't help either. My long positions in mutual funds and stocks are very conservative, but my short positions are not quite compensating. One short position (on News Corporation) went very wrong. The Australian Dollar has also been weak.

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