Less Bullish. Sector Rotation.

I've been balls-to-the-wall bullish since April 2025.  Averaging 120 to 130% invested.  Now I've cut my exposure and added some shorts.  Now I'm 98% (gross) invested, plus 14% short.

Sold or reduced:

• Copper, palladium following Hedgeye Trade and Trend
• A Latam bank
• Shorted tech and crypto, again following Hedgeye Trade and Trend
• Sold 1/4 of my Malaysia Smelting Corp shares.  Tin made all time highs in Jan, with MSC up around 40% from where I bought it.  I think tin continues up this year, but probably falls next year with slowing economic growth.  So I still have a while to sell, but sell a little now in case I am wrong.
• Sold Hartalega (Malaysian rubber glove company) at a 66% loss.  I'm not sure if I timed the cycle wrongly, or there is something wrong with the company, or China is destroying the glove market.  There was no clear signal to say that I was wrong and to cut loss, just a slow drip, drip, drip of bad news.

Still golding a large chunk of gold and precious metals.  Gut feeling that we are not at the end of the gold cycle, but no numbers to back it up.

The US market is rotating away from tech and into Industrials and some cyclicals.

I am still bullish for 2026, but think 2027 has slower growth.  The bear may start end of this year.

My positions.  Short term trades are purple.  Cyclical commodities to sell as they go higher are Green:

The portfolio is doing OK, beating SPY but tracking gold.  With all the volatility that entails:

Another loss; Sector rotation; becoming less bullish

Another big loss last night, around 50K.

Caused by gold dumping for a 3rd time.

I still think gold is in a correction in a bull market.  Gold is making higher lows, while gold vol is dropping:

Still a bull market till proven otherwise.

The loss isn't really that big actually, at 2.6%.  I'm up 12% YTD.  The only way to handle volatility is to get used to it.  There is no course, training or job that can teach you this. When you ride the bubble up, you get smacked with vicious corrections along the way.  

This time tech and crypto sold off along with gold.  The market is rotating.  Tech (mag7, new AI and old SAAS companies) are out of favour.   Industrials, some cyclicals, and energy are in favour.  I have some short crypto positions, and added some short tech positions on the open last night.  Quite pleased with myself.

Since June last year I've been wildly bullish.  Was often 130% invested.  Now I'm down to 108% (gross) long and 10% short.  Want to continue in this direction.  With so many sectors selling off on the same day - and these are usually unrelated sectors like tech & gold - we may get a correction.  Where VIX goes over the 30s and correlations go to one.

2nd Biggest Daily Loss; Buying Japan

 Last Night:

Losses from gold (39K), Silver (12K), Cooper (9K), Platinum & Palladium (7K),.

What happened?

• Silver got hammered by some guy in China building a massive short position.  If his short position is not hedged, he'll have to cover in a few weeks.
• Gold fell in sympathy
• Crypto and Tech fell.  For tech, both Mag 7 (cause they are spending too much on AI), and traditional SAAS companies (cause they're going to get disrupted by AI).

I don't know if all these falls are the start of a new selldown, as volatility begets volatility, and correlations go to one.  I'm posting this to remind myself what 30-40 one-month forward IV feels like.  Really hope my next blog post has a different title.

My best guess is that gold will recover in a few months.  GVZ has peaked and is now falling, but needs to hit the low 20s:

Retail interest is still strong.  For now, I'll hold it and wait for the bull to continue.

Silver I think will also bounce, but is still too volatile.  For now, I'll hold it and look to sell above $100.

I don't know if tech and crypto will recover.  I'd like to put some tech shorts on during a bounce.  And reload my crypto shorts (MSTR and BMNR).

In the meltdown this morning, I bought 2 Japanese companies (paid link).  They are a growing SAAS duopoly, with a 20% market share together and 20-30% growth rates, and EV/Sales in the low single digits.

This is a fundamental bet, not macro.  Betting they won;t be disrupted by AI, and they can keep growing as the majority of additional revenue adds to their profits.

The meltdown can always continue next week.