There are two schools of thought at play here. One lies in the fact that markets are dislocated from reality, ignoring the slack in the global economy and deleterious effects the decline in WTI will have on the heavily invested energy sector. The other side of that coin is pervasive central bank planning that will succor asset prices, which will, inevitably, lead to higher prices.
If you’re into buying gold stocks, due to the central bankers, it’s hard to buy them here–following a 1 week 15% gain.
If you’re looking to buy equities, it’s a little scary to do so, as oil breaks $40 to the downside.
REITs, UTES? That’s a hard trade too, since those sectors have been bid up to new highs.
Where is a lad to place his hard earned cash?
For me, the sole destination for all of these questions is the ark, via TLT. Also, I just added a short position, which was mentioned in Exodus today. On the long side, I like nothing–but Exodus is spitting out oversold signals for some key names.
Bottom line: Ignoring the drop in crude over the past month has proven to be a profitable course of action. Whether this trend will continue is anyone’s guess. With my money, I prefer to sell short the basic materials and remain idle in treasuries and cash.
This is the ebb tide. Time to make a move.
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