Canadian Bonds and a Short Goodbye

Alright, he's really Australian, but it's the closest you'll get (rumours that William Shatner was originally slated to replace Sean are completely unfounded)

A bit more trading today. Firstly, and with some reluctance, I said goodbye to my EFA short, the Proshares Short MSCI EAFE ETF (EFZ). This was, if you recall, a play on collapsing European shares, as a result of the east European economic implosion.

I still think this is on the cards, but having been very oversold for a couple of days (14-day RSI below 14), I think that the EFA index could rally quite a bit. So, I have sold EFZ at $109.47 (£77.55), which is about a 10% profit. Nothing too exciting, but at least it's in the right direction.

I have also replaced my Yen holdings with an ETF which holds short-dated Canadian government bonds - the Claymore 1-5 year Laddered Government Bond ETF, which trades in Toronto under the symbol CLF.TO (see here for details). I bought a big stack at C$21.09 (about £11.65).

CLF is mainly a play on the Canadian dollar, which I suspect could do well if commodities such as oil manage to recover at all. At the same time, CLF is a much less risky proposition than a commodity ETF or share, as it should also benefit from renewed deflationary pressure. That's my theory, anyway, although I'm not alone.