Already short yen and long bonds pre-breakout on both, though not with enough size. Came close to shorting PMs this week but talked myself out of it. That's what I get for chickening out...
Other great moments in mag cover history Feb 1999 Not a magazine, but you get the picture. From 2000, now available for $0.01 on Amazon
'Not enough size' is easily rectified! Shorting PMs seems like it will be quite correlated with being short bonds and Yen, so personally I think it wasn't necessarily a bad decision to chicken out. Out of those 3 positions I think PMs are the least likely to be a home run short. One other point that occurred to me - the Yen move was very swift and stealthy, if you missed the initial breakout then there was barely any pullback to enter 'comfortably'. This could be an important lesson if the bond breakout is the genuine article and not a head fake. If a real move is in progress, the most important thing is to have on and stay in with a decent-sized position, not to try and finesse your entry to perfection. A further macro point - if Japan is going the QE route, which is what has hit the Yen hard, then this could revive their stock market, moribund for 22 years and still down 75% from the highs. And almost no one is pounding the table to buy Japan. So, that's a market to keep an eye on (although you'd want to hedge the Yen exposure).
Understand your point re: LNKD, however I believe you are generalizing too much in the area of growth stocks. There are growth stocks ala LNKD/Z/recent IPOs, and then there's the GMCRs/NFLX/CRMs. One is basically as you alluded to in your post above, the others are potentially hitting the top of their markets with ridiculous PEs. Re: PMs, Yen, Bonds. My 2 cents is that for fundamental and technical reasons, yen has much lower to go, bonds can run but will be choppy and lastly gold while weak has not given a definite sell signal. Buy the pullback if one in stock index.
Yen is just beginning to break down on the weeklies, if indeed this is the beginning of Japan's slide to doom there ought to be plenty of chances to get in. I'm not so sure about the Japanese market: granted it's down a lot, but it's been down a lot for more than a decade and in a bear trend during that time. It's not a 'blood in the streets' panic washout from which we can expect a sharp rebound. Dividend yield is only 2% (a few basis points above SPX), PEs at around 13 are low by U.S. standards but not that low. 13 is a level last seen in the 70s, when demographically and developmentally Japan was a booming future growth story rather than an aging country with a shrinking population and sclerotic economy. When you look at the high-flying exporters you don't see obvious bargains, but PEs in the high teens, twenties or more - compare with companies like Boeing and GE trading at 14-16 times earnings and similar dividends but without the added risks of investing overseas, different currency, etc. The broad Japanese market could be a value trap in other words, book value isn't worth anything if you have no prospect of extracting it. AUD short is something I've liked as a play on China - in this connection the Chinese government recently lowered growth targets, to some degree probably just adapting to what was already the reality. But I'd want to see a good deal more in the way of bearish PA before putting that one on.
I'm trying to see if there is value on the Dec 2013 Fed futures contract There are 11 people in the Fed that believes rates should be at 0.25 by year end 2013 and 6(35%) that believe it should be higher If you look at their forecast they expect GDP to grow 2.5%(The middle of the central tendency) in 2012, 3% in 2013. UR to be at 8.3% at year end 2012, 7.7% in 2013 and PCE inflation to be at 1.6% for 2012 and 1.75% for 2013(Again, I took the middle of the central tendency forecasts) The risk here is that inflation picks up and they are wrong on the inflation forecast(I don't even think those forecasts are true, they just say that to anchor iexpectations). If that were to happen it would tip over some voters to the hike camp. It might go from 35% to 50-60%, it would be an unbalanced revolt because most of the hawks are Fed presidents who like to dissent whereas the Governors think long and hard before doing it(Presidents also have less seats at the actual voting committee). So its possible even in that scenario Bernanke is able to contain the revolt by having support from the Governors by that would also be a risk propostion Frankly those contracts don't seem to be priced fairly okay, if there is an edge there is not large by any means(The edge was on the short side a few months ago, I flirted with it but never pulled the trigger, big mistake) Of course if there is a recession/slowdown the contracts are totally mispriced but in that case I believe there are better bets out there, mainly shorting stocks/buying vol and buying the 30y bond
The Fed voting balance is 5 seats for Governors(Usually doves), 4 seats for Presidents(Usually hawks) plus the Chairman