April Updates

I have taken a break in the month of March from writing on the blog. I went for a spring break on a cruise to West Caribbean. It was a wonderful time with the family but that is no excuse for not writing. I was away only for 10 days.

I alluded to some expectations on the market before I left. I awaited a correction of 10%. I waited in Jan, Feb and March, and it did not come again! I had accumulated more than 50% cash. I hedge all my positions before I left for my holidays.

The market continued to go climb the wall of worry and goes up. Despite all the negative events in Libya, Egypt, Middle East tension and unrest, earthquake in Japan, escalating risk of debt situation in Europe and high price of oil, the market continues its ascension with no fear.

I am now leaning to the direction that the market will continue to be bullish for a while. There is so much liquidity. Merger and acquisition happens on a weekly basis.

On the other hand, the dollar has hit its very important support level at 75. It continues to exhibit weakness. If this support is broken, it can go down quickly to 72.  The weakness of the dollars is also positive for stock and commodities. As the dollar is being destroyed, assets price goes up ( except housing ). The winners are gold, commodities and stocks that has good exposure outside US.

Gold and silver broke all time historic highs. It was a surprise to me. I expected it to continue to go up but not at this pace without a meaningful correction.

Thus, I am again leaning bullish again. I want a confirmation from the earnings the start of the earnings week. If it is positive, I can expect the market to continue to climb for the next 4-6 weeks. I can delay the expectation for a correction. 

My portfolio is still positive but it was a slight disappointment for me.  Upon reflection, it is prudent for me to hedge in view of all the negative events that happened in March. The market has proven to be very resilient.

With such a rise in the precious metals, I should  have been riding happily on the trend. I did not although I enjoyed some gains.

Also, as most of my positions are in USD and my account is based on Canadian dollars, I suffer some losses. These losses are higher than the gains on my stocks in USD.

Anyway, the opportunities will be there again. Just need to stay on my system and continue to trade with discipline and risk control.