Over the coming few months, I will keep my comments short and steer clear of politics. After all, who needs a long ramble when your day is spent listening to your spouse complain about the long airport queues?
And let’s be honest, for some of you with young families, by the time you reach Torremolinos, many of you will be wishing the airline had lost the kids instead of the luggage.
So, with that said, I will keep it short and be more direct.
As you know, I dumped my long positions in commodities two weeks ago, and I am very grateful to have done so. These markets have collapsed since then, almost to the point where it is tempting to go back in, but the urge should be resisted.
There will be an opportunity to get long in these markets again, but we have plenty of time, as I do not see the potential for any “V” bottoms in commodities in the short term. I would not be surprised to see Gold pull back a little more, but I will not touch my physical holdings for a few years. If we are lucky enough to see a few hundred dollars lower, it might be tempting to add.
On the rumor mill, some are suggesting that governments may start to clamp down on private purchasing of gold. Nothing would surprise me. However, such a move is a long way off, and I am not overly sure whether such action will be bearish or bullish for the price of the shiny stuff.
I remain slightly optimistic about Oil and energy, but it is a political minefield. I am sure it will not be long before we are discussing consumption during the summer months, but this is secondary to the overall picture. The geopolitical picture is uncertain, to say the least, and if Trump does get back in, his only decent policy is to “Drill, Baby Drill.” So, we know what to expect there.
I saw last month that Russia is now the largest supplier of energy to the EU (that says a lot about EU sabre-rattling and strongly imposed sanctions on Russian exports). That said, it’s a crazy market, so let’s sit back and watch what it does. For now.
I am maintaining a short EURUSD position, which I have held for a month or so, and we are getting very near to what I consider a serious break to the downside. Living in Euroland, I have long held the view that as weak as the dollar may become, the Euro will not fare any better.
Technically, I am watching the development of a strong diamond pattern on my charts, and although we haven’t broken out yet (Wednesday afternoon), a break looks almost imminent, and that could cause us to see EUR trading at sub-par levels before the end of the summer.
Also, before the end of the summer, I expect equity markets to be much lower, but that will not surprise any of my regular readers. You know I have been looking at September SP500 puts this past week. Although expensive, I liked the 4800 strike but got some cheaper 4750’s. If it breaks, it’s going to break.
I completely underestimated how much AI shares would push the indices higher, and while no expert, I have been completely impressed by the performance of NVIDIA. That said, trading at 20 times revenue sounds a bit overdone and is starting to sound like an alarm bell.
Finally, everyone’s friend BTC. That product that continually threatens to go to the moon but never quite makes it. I haven’t traded BTC for some time because, besides all the rhetoric, there are conflicting views about what it is or, more importantly, what it has become since BlackRock arrived on the scene.
Values have dropped quite a lot over recent weeks, but I would prefer to stay sidelined at current levels rather than jump back in. After all, this is super-volatile BTC, and a 20% correction is hardly a move worth writing about.
That is just a short overview of how I see things currently. Rightly or wrongly, only time will tell.
Right now, I am more concerned about England’s progress in football. As it stands, it feels like Rishi Sunak is giving Southgate advice, which means they will both be out of a job before the end of the tournament!
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