The Games That We Play

Ok......so let me see if I can get this one right. PPI number comes out. It's high (0.6%), so that if projected out over a 12 month period we get an annualized inflation number around 8%!!! Still.....it's only high enough to increase expectations of Fed continuing rate increases, not high enough to encourage the belief in an inflationary cycle where gold, oil, and the other commodities run some more....... oh yeah - but it is high enough to tank the broad market amid the rate increase fears.

It's probably not even worth trying to connect those dots. Any relationships discussed above - are even too murky for me to make another attempt. Bottom line from the portfolio perspective - my NEM options are selling off and Friday's half-sale is turning out to be a great call as my options prices are now below where they were on Friday. Friday was also my chief most optimistic moment - as I was sure gold was breaking out here and this was the moment. Instead it looks like gold is rolling over and may retest the $430 area - as it is down close to $5 already today.

I am sticking with plan to hold my NEM options for a few more days - there is just too much interesting economic data coming out this week which is just waiting to be spun. Just have to wait long enough for it to get spun my way.

Regards,

BG