Assessing the Field of Battle

The market is acting stupid again. But I am not going to complain. As you know, today is my 36th birthday and I am running out of time on this here blog. The cut off age for reading iBankCoin is 47.5, so I need to enjoy the time I have left here.

I am not going to complain about how “stupid” the market is because markets are not stupid, just the people playing them. So, let’s think this through, shall we?

Is a Greek exit from the Euro imminent? Seriously, should we be worried about the election results in June and prepare for a real fucked up Mad Max scenario? Or, will the central banks, yet again, kick the can down the road. This distinction means everything.

Moreover, being that China’s growth has slowed dramatically (as intended by their policies), is the risk now betting against Chinese stimulus at a fresh high? Meaning: people have been shitting on China for years now. And, frankly, their growth has been less than impressive in recent months. Will the Chinese step in and cut rates and/or launch a stimulus missile?

If so, anything related to China will soar. Industrials and basic resource names should be accumulated now, in anticipation of that news.

I think everyone is too bearish. I also think too many people are expecting a full fledged rout of the euro. Whenever things seem obvious, shit happens and the once obvious becomes absurd, shortly after the fact.

For now, I am holding onto my longs and will be looking at basic resource names, anticipating the Chinese to step in one of these weekends with surprise clawhammers to the faces of those betting against it.

NOTE: With natural gas under $4, coal is in the “do not buy zone” thanks to displacement. I would not touch debt laden coal names until natty spikes.