Took a painful drawdown on Friday ahead of G20 and reduced positions, which was a mistake in hindsight. Friday trades :

Sold 1m gbpjpy at 142.623
Sold 20 NIH3 11000 Mar calls at 371
Sold 10 G H3 at 114.72
Sold 3 USH3 at 143-13

The last 2 trades re-established shorts in gilts and T-bonds, albeit at a very poor level in gilts (quite oversold).

The gold trade look more compelling the more I think about it. Price action was awful on Friday obviously, and the market has broken through an uptrend from 2008. It could bottom and recover, but the environment looks hostile to gold to me for all the reasons discussed before. The price rallied from 682 post-Lehman to 1921 in late 2011. Obvious 38 and 50% targets for a healthy pullback would therefore be 1450 and 1301. Since it feels like kicking on an open door, I'm taking a risk and betting that we won't have the squeeze back into the old range (above the trendline mentioned earlier), and so I'm increasing my gold short to full size right here :

sell 3 gcj3 at 1619.3

sell 10 gck3 may 1700 call at 11.0 (expiry 25Apr13)
buy 10 gck3 may 1560/1510 put spread at 10.0

buy 30 gcq3 1400/1350 put spreads at 3.7 (expiry 25Jul) - cheap, but 12:1 for a real collapse over the summer.


Fri 14Feb13 NAV 111.6