Perfect time to SHORT LEND

Stocks: short LEND, HRB, MCO, WFC, GOOG, EEM, FXI
While the markets continued to gyrate this week, the question remained: will stocks decline further? The U.S. stock market found some stability this week, but most probably due to short covering and option expirations. LEND has made a 100%+ come back this week, providing a perfect opportunity to load up on put options. Right now (3pm), the market is declining into the close, and this may be signaling that next week will be pretty bad for stocks. All eyes will be on Bernanke next Wednesday.

FX: long euro, long yen
With a deteriorating economy and stock market, I am bearish on the dollar. As the fed attempts to prop up the markets by injecting capital, the dollar will take a further hit. Euro futures made a big move yesterday (shooting above 1.3250), and the yen is poised to break out of its triangular formation.

Bonds: short 30-day, long 30-yr
I see a steepening yield curve in a desparate situation where the fed jacks up the money supply while investors seek protection. Next week's FOMC statement will be crucial.

Crude Oil: short crude (target - between 55 and 54)
The calendar spread for crude futures has widened since the last post (below), evidenced by crude's declince by almost $4 this week. But crude will probably not dip below 55 due to buyers with long-term demand.

Precious Metals: long gold
While I remain long-term bullish on PM, a potential across-the-board asset correction cannot be ruled out. But gold is currently a good hedge because it is considered a safe haven, and many foreign governments are diversifying out of the weakening dollar.