All up, all the time!
Come on people, I mean I’m not chained to modern portfolio theory; the idea that bonds and equities almost always have to trade in an inverse tandem is silly nonsense.
But over the past week, equities, bonds and the dollar have been consistently higher together.
Is it possible? Absolutely.
Is it likely such an event can coincide with the Eurozone crisis? No.
Something needs to give here. If the dollar continues to strengthen appropriately, money will have to find a cheaper Europe. Unless everyone already has all the money they need, that must mean more selling of U.S. dollar denominated assets.
At a minimum, should the dollar burst higher then interest in U.S. markets should diminish. That leaves us trading sideways, not up.
And by the way; how much demand for crude and products do you think will be present if countries like Portugal keep slamming austerity on their citizens?
Despite checking my enthusiasm, I do hold out hope that oil collapses further. It would be like an early Christmas for me. It would also put us on the path to avoiding another recession. Think of it as cheap resources for those who are left to take part in the fun. A sort of “to-the-victor-goes-the-spoils” outcome.
I await a pullback but with caution. I don’t think the Fed will offer more juice here, but then again I didn’t think they would last year either. The Fed is good that way about punching me when I’m not looking.
On any pullback, barring a shift in my mood (always possible), I will probably cover these oil and energy shorts, locking in profits.
Also, today I sold the AEC I purchased on August 8 ($16 a share cost) for $17.75; securing a nice 11% profit on a small part of my holdings. The additional cash will help calm my nerves, bringing me back above 10%, before potential losses on shorts being considered.
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Fuck oil.
Cain, you got a public email? Thanks
You can reach me at [email protected]
I sold out of the shares of CLP I purchased for $18.63 on August 5 for $20.95 apiece.
I have been selling a big chunk of all my holdings today, including AEC (CEO sold 50K shares last week, by the way), CLP, and even AWK. The correct trade lately has been to buy when the charts look like shit, sell when the charts look great. Other than the volume, the charts on all 3 are looking pretty good right now. With volume this thin anything can happen, but they are all at the top of their range and I’m pretty sure I’ll have a chance to buy back what I sold lower at some point. Just got to wait for the next scaryass headline.
Probably a good strategy Jack.
Myself, I just looked down and realized I needed more cash.
Unfortunately oil demand is no longer dictated by the western developed economies. Our fine friends in China and India rule that nest now.