2010-2011 Growth Cycle

Aug 31 2010: Gold flows are supporting this recent run-up in price. Model output suggest that prices can continue higher (Gold spot price below)

Sep 20 2010: The strength of equities in the face of overbought conditions and weak data suggests that there is some solid underlying demand. The recent Fed Flow of Funds report suggest the largest cash balances as a percentage of private and corporate balance sheets since the early 1960’s. When combined with low yields, this suggests the potential for a big reflationary move.  (S&P 500 Chart below)

Dec 7 2010: I’ve been looking at Eurostoxx Dividend Futures over the past week. The futures curve is trading at a very substantial discount to consensus expectations. This suggests that going long the 2011 future is good risk/reward (Dec 2011 Eurostoxx Dividend future below)

Jun 28 2011: Long Nasdaq 100 vs S&P, equal dollar weighted.  Relative growth differential is not adequately priced in. On a forward basis, the Nasdaq is very cheap vs the S&P.  Nasdaq Index earnings continue to grow faster than S&P earnings (Nasdaq vs S&P 500 ratio below)

Sep 23 2011: Risk assets are likely to bounce (S&P 500 chart below)

Dec 13 2011: Buy an ATMF 3y1y USD Receiver.  The US is going to slowdown, and headline Inflation is likely to peak soon.  Fed will do more QE. (USD 1 year swap rate below)