The Big Boys, page-549

Hi Cha, Hi Snout

I've gone uber bearish I/O, from an already bearish position. Posted a fair bit of I/O FA a few weeks back on XSO so wont bore you again with it, but suffice to say i'm expecting a big drop in demand just as supply is ramping up...this is all short term supply/demand expectations against a larger backdrop of a persistently ugly picture.

I'm also expecting crude to roll over this weekend if OPEC cannot come to an agreement to freeze production (which i rate as a very high possibility). I'm hoping BHP can push up into that $18 resistance area this week. If so i'll likely take a 30% tranche, then the rest upon confirmation. Reckon $12 this year.

Goldies could well go on with it here, but i just have a gut feeling gold is going to put in a new low before the bear can finally give up. Too many gold bulls for my liking. Everything looking pretty overbought, even though there has been consolidation as you mentioned. I've still got a few core holding that i wont be fully liquidating, but taking the cream off here.

Yellen declared war on USD, and I know it doesn't pay to fight the FED, but I think the bulk of damage done here. Looking for 93-94 to hold then back to being range bound to 100. Eventually, i'm expecting USD to get up to the 120 mark, when the market realises US is the place to be. Unless the US economy deteriorates severely, I can't see Yellen reversing course, at worse rates on hold, which is essentially priced in right now. Persistently low Oil should be another tailwind for US economy (and therefore USD), with US still a net importer. This has taken longer than I expected.

In a nutshell, next 6-12 months, I'm seeing higher USD, Lower I/O and lower crude (independent of USD).