As sure as I was sitting there, watching Dennis Gartman say oil would be “boring” for the remainder of 2016, it got shredded to pieces.
Brent crude down 6% for the day is no laughing matter. Jobs will be lost; people will suffer. The poor folks in Saudi Arabia just got their gasoline tax raised and now have to pay 20 cents per gallon.
What is the world coming to?
In other news, the dollar is at 11 yr highs. When things get sporty, and things are most certainly sporty now, investors flee to the dollar and US treasuries, which is why I am doing so well in TLT.
“The market remains bullish about the U.S. and hawkish on the Fed,” said Joe Manimbo, an analyst with Western Union Business Solutions, a unit of Western Union Co., in Washington. The likelihood of several interest-rate increases this year “bodes well for dollar outperformance,” he said.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose 0.3 percent to 1,243.48 as of 12:34 p.m. in New York, the highest on a closing basis since data going back to January 2005. The greenback was little changed at $1.0759 per euro and fell 0.4 percent to 118.57 yen.
Bottom line: the market has done nothing but plunge over the past week. We are overdue a bounce. But when we do get that bounce, you should take it to lighten up and/or hedge.
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But the Fed is worried about inflation.
Western Union Business Solutions?!
Not sure anyone has said it yet but nice work going long TLT, Senor Fly.
24 cents per liter = 91 cents per gallon