If we see some big upward surprises tomorrow before the market opens for Caterpillar, Citigroup, and Honeywell we could have a pretty big up day for U.S. equities.
On the international front, Iceland's credit rating was cut again by S&P and Israel's rating was raised by Moody's. Now I don't necessarily care too much about what the soon-to-be-defunct-in-current-form rating agencies are doing, but I was planning on taking this weekend to read up on Israel and their market. My initial thoughts were that Israeli equities were pretty darn cheap. Along with Israel, South Korea and Turkey are on my agenda. South Korea is dirt cheap, but they are also closely tied to the fortunes of Samsung. I plan on checking out the macro picture in addition to looking at equities, currencies, etc. etc. for those three countries. I'm hoping to make this a weekend ritual actually.In currencies, Luxembourg Finance Minister Jean-Claude Juncker helped lift USD by saying financial markets misunderstood the recent G-7 statement about currency volatility. I've believed for some time that the endgame for the slide of USD is cooperative action by the world's central banks. This would certainly make that statement by Juncker pretty important. But we're not quite there yet. Macro Man has a good post on the wording of past statements preceding currency interventions. I mentioned this idea to a friend who works in currencies and he brought up an essential point that even if their was collective action to boost USD, China is sitting on over $1 Trillion and will buy EUR/USD out to yazoo. This makes collective action extremely difficult.
So that's the portfolio right now. Won't be doing any other moves in the near future. I am moving the portfolio to MB Trading over the course of the next two weeks. As I've mentioned before, I'm approved for margin trading, futures, options, and international markets over there. This is the initial setup for the portfolio during the ACAT transfer process. As with any shorts, I'll be keeping a close eye to make sure things don't get out of hand. Since these are all long/medium term holdings, my plan is to do a thorough review of a position if I it's at a 10% unrealized loss.And in closing I'll add a few links to what I've been reading. I like posting links so I can go back later and read again.
Lenders examine Libor alternatives
