Tuesday, January 02, 2007

Coal in the stocking

Macro Man got coal in his stocking this Christmas, as the portfolio got smoked in the second half of the month. Let's assess the damage:

* Equities topped out mid-month and drfited sideways to lower for the balance of December
* Oil nudged lower and the OIH had a catastrophic reversal of fortunes
* The dollar mounted a recovery against the EUR and GBP on the back of a much improved tone to the data
* The dollar suffered against the kiwi, however, as the flightless bird hitched a ride on a rocket known as 'FX carry.'

Macro Man plans to put on a 'beta plus' strategy in equities and FX carry, but fears he may already have missed the boat, as both carry currencies and S&P futures have gone doo-lolly already. Fortunately, the dollar has come off against EUR and GBP as well, so January is off to a good start.

Macro Man is still catching up with his day job, but will post the results of his carry study and the initiation of the beta plus portfolio later on this week.

Happy New Year!


Anonymous said...

What are your thoughts on Yen/Euro ?

Macro Man said...

It is in nosebleed territory for sure. With USD/JPY starting to approach 120 resistance and 158 barriers taken out, it is looking close to a sale....as it did at 150, 152.50, and 155- which is the problem!

Anonymous said...

agreed ..... yuch , drives me nuts