Don’t believe for a second the drop in gold and silver were isolated events. As a matter of fact, it’s all tied into a single thesis, all to do with liquidations and the reemergence of risk off.
Oil will follow, luring people back into the fold due to a reduction in “input costs.” However, what they won’t realize straight away is the municipal dependence upon gasoline taxes and how lower gas prices is onerous for many state across the country.
There are beneficiaries.
Look at the shippers, companies like FRO are plagued by fuel costs–which comprise 67% of their expenses. If one could surmise a few simple points, they may start to believe that a company like FRO will benefit from sharply lower fuel costs.
But the shippers are not a short term play, as it needs to undergo restructuring in order to heal.
Be wary of the fast money trades, picking the depressed “for a trade.” Sometimes those trades end up becoming an albatross, something you will regret with every fiber of your existence–shortly thereafter.
“The Fly” will continue to wait out the tape in search for reasonable discounts. At these levels, following a mini-pullback, I do not feel a sense of urgency to jump into the fray.If you enjoy the content at iBankCoin, please follow us on Twitter