We’re Not Done Going Lower Yet

The EURUSD is not confirming the move, and oil prices have retraced. Yesterday’s powerful follow through into this morning has suckered people into the funnel.

For the moment, I don’t know if I want to sell any more. But one thing is clear to me – unless Europe can get its act together, we are going down.

A Difficult Decision – Back To 20% Cash

Here I find myself, anxiously pacing up and down the width of the 9th floor in ferocious concentration on the ground just in front of my stepping feet.

What to do?

I have made almost 7% in one day, putting me back in the black for the year. My timing could hardly have been any better.

In August, animosity led me to sell down my longs to a 45% cash position, at the highs of the market. The oil names that were so mercilessly cut down; I had escaped them in sublime manner. Not that I was spared. I watched in shock as a 20%+ year devolved into a small loss. Rather, what marked this as exceptional was the losses I avoided.

I began to buy back what I had sold, and more…

I soon found myself holding a 115% long position on margin. I will not try and hide from you that I was beginning to get most nervous this morning, when the clamor was loudest and the fear the most potent.

So what do I do now? I can hardly exclaim victory – I’m 20% shy even from an acceptable sigh of relief.

Today was a big move. But I remain worried. The EURUSD is stuck at 1.28. Europe is the hidden driver of this selloff; not ebola or white noise in Fed data.

We could continue much higher. Or, I could be savagely knifed and lose my year entirely.

I think that settles it. I am raising cash back to 20% by taking profits on the names I bought at the lows, and completely selling off BTU for tax loss write offs.

Breakeven For The Year…

You have to be kidding me with this right now.

I just went from a plus 20% year to flat, in the matter of a few short weeks. This blow up in the oil sector is vicious. It is the legacy of the collapse this spring – the tech debacle’s bastard twin. I can only look on in a state of minor shock, watching this unfold for…really no particular reason.

Some people just woke up one morning and said “I think billions in market cap should vanish”.

Then they did.

There is no data driving this. The Fed data is not showing a slow down. Europe data is as bad as ever…but no worse. Oil demand estimates have been revised lower…to a still larger number.

This near total collapse is being fed by the end of QE, a half cocked conspiracy theory concerning Saudi Arabia and the Russians, and fear.

And it is getting so bad, the sector is actually at risk of sustaining real damage, should the hearts of energy producers seize. What is at stake here is nothing short of the US recovery, all thanks to some investors getting wobbly legs.

BAS is trading back in the $16 range. HCLP is a $40 stock again. Are you joking? To the best of my knowledge, both of these companies has not seen a single cancellation of business. Actually, contractually, HCLP cannot see such a thing, unless their customers all go out of business.

The only word that even adequately describes what we are seeing is – panic.

Exhausted…

Now before bed, after having been up writing all night, I say good evening.

I made a few trades this week and, unless there is something dramatic unfolding, I will likely stay low tomorrow. This weekend, I have one final push of work to complete. Then things should break steady.

Or, well…stead-ier, I guess. The busy season in my industry is almost complete, as is a time stacked project I am working on. Throw in the usual academic pursuits and a few nonprofits I board and I was never exactly blessed with free time.

But the uninterrupted 11 and 12 hour days should be just about over. The wife is more or less done with them, and with me being preoccupied. I have been directed, without any room to interpret, that I am to be a family man until Christmas. To make sure I toe the job description, my duties have all been conveniently written and meticulously planned for me.

The schedule is quite something to behold. Long work hours are to be cut short. Late work nights with cups of tea have transformed into tea parties and chaperoning little princesses around the state, to all their most pressing affairs. Vacationing in the north is being explored.

Actually Madame de Thaler has been most good about the past few years, when I have been just dreadfully preoccupied. I will be happy to accommodate her, with quiet dignity. Even if I’d much rather be in the company of gentlemen, conducting business affairs, than in the company of children, conducting games of merry-go-round.

FREE SCOTLAND

The mighty Scottish nation is putting America’s oldest enemy, the British Empire, back to task. Set those royals low, chaps. Pave the way for secessions in Spain, China, Canada, Mexico, and Russia. But don’t you lot in southern California go getting any ideas.

It is absolutely comical the way the Scottish referendum is being spun as a life or death choice for the world. As if we should all of us fret over the implications of five million people deciding they’d like to change how they vote for their incompetent leadership.

The number of legitimate financial institutions screaming about recession is predictable. A third of the UK forming a new government would probably sink the pound sterling and throw into question a lot of debt responsibilities.

So speak up then; who feels bad for the bankers and financiers who might have to rebalance their currency and interest rate bets?

The NATO distraction is by far the most ludicrous of all of the arguments. Oh yes, Scotland will not be a part of NATO immediately, opening them up to attack from foreign enemies. This would be a most terrible risk for this hated nation of peoples.

I am certain that Scotland’s arch nemesis, the Swedes, have already begun plotting to sack Scotland in the peace lull that will ensue. Russian warships will be in Scottish territorial waters any day following a “yes” vote, and no one will do anything because Scotland will be merely in the process of re-joining NATO.

The whole of the doom and gloom predictions are typical. This referendum is threatening to shake up the status quo a little, so the entrenched are clocking overtime stirring up fears of this somehow setting off a European crisis, as if the loss of a unified UK will somehow tip the balance.

Let the Scottish cede. Their plans as they have disclosed them sound pretty terrible. They’re going to spend a ton of oil money showering each other with state bought goods until their productivity drops and the wells run dry. I am sure that will work out splendidly for them.

In the meantime, the UK at large will be mildly inconvenienced by a weaker pound and some nagging legal questions, until foreign investment takes advantage of that and employment picks up, and God forbid they might have to actually address stagnant problems with their healthcare entitlement. Meanwhile, the spoiled eighteenth generation of former aristocrats will face taxes on their hundred square mile estates.

The world weeps…

We’re Not Done Going Lower Yet

The EURUSD is not confirming the move, and oil prices have retraced. Yesterday’s powerful follow through into this morning has suckered people into the funnel.

For the moment, I don’t know if I want to sell any more. But one thing is clear to me – unless Europe can get its act together, we are going down.

A Difficult Decision – Back To 20% Cash

Here I find myself, anxiously pacing up and down the width of the 9th floor in ferocious concentration on the ground just in front of my stepping feet.

What to do?

I have made almost 7% in one day, putting me back in the black for the year. My timing could hardly have been any better.

In August, animosity led me to sell down my longs to a 45% cash position, at the highs of the market. The oil names that were so mercilessly cut down; I had escaped them in sublime manner. Not that I was spared. I watched in shock as a 20%+ year devolved into a small loss. Rather, what marked this as exceptional was the losses I avoided.

I began to buy back what I had sold, and more…

I soon found myself holding a 115% long position on margin. I will not try and hide from you that I was beginning to get most nervous this morning, when the clamor was loudest and the fear the most potent.

So what do I do now? I can hardly exclaim victory – I’m 20% shy even from an acceptable sigh of relief.

Today was a big move. But I remain worried. The EURUSD is stuck at 1.28. Europe is the hidden driver of this selloff; not ebola or white noise in Fed data.

We could continue much higher. Or, I could be savagely knifed and lose my year entirely.

I think that settles it. I am raising cash back to 20% by taking profits on the names I bought at the lows, and completely selling off BTU for tax loss write offs.

Breakeven For The Year…

You have to be kidding me with this right now.

I just went from a plus 20% year to flat, in the matter of a few short weeks. This blow up in the oil sector is vicious. It is the legacy of the collapse this spring – the tech debacle’s bastard twin. I can only look on in a state of minor shock, watching this unfold for…really no particular reason.

Some people just woke up one morning and said “I think billions in market cap should vanish”.

Then they did.

There is no data driving this. The Fed data is not showing a slow down. Europe data is as bad as ever…but no worse. Oil demand estimates have been revised lower…to a still larger number.

This near total collapse is being fed by the end of QE, a half cocked conspiracy theory concerning Saudi Arabia and the Russians, and fear.

And it is getting so bad, the sector is actually at risk of sustaining real damage, should the hearts of energy producers seize. What is at stake here is nothing short of the US recovery, all thanks to some investors getting wobbly legs.

BAS is trading back in the $16 range. HCLP is a $40 stock again. Are you joking? To the best of my knowledge, both of these companies has not seen a single cancellation of business. Actually, contractually, HCLP cannot see such a thing, unless their customers all go out of business.

The only word that even adequately describes what we are seeing is – panic.

Made Some Small Nibbles Today

I made small adds today to HCLP and BTU.

I added to HCLP for $49.73.

I added to BTU for $11.97.

Cash stands at 20%.

Exhausted…

Now before bed, after having been up writing all night, I say good evening.

I made a few trades this week and, unless there is something dramatic unfolding, I will likely stay low tomorrow. This weekend, I have one final push of work to complete. Then things should break steady.

Or, well…stead-ier, I guess. The busy season in my industry is almost complete, as is a time stacked project I am working on. Throw in the usual academic pursuits and a few nonprofits I board and I was never exactly blessed with free time.

But the uninterrupted 11 and 12 hour days should be just about over. The wife is more or less done with them, and with me being preoccupied. I have been directed, without any room to interpret, that I am to be a family man until Christmas. To make sure I toe the job description, my duties have all been conveniently written and meticulously planned for me.

The schedule is quite something to behold. Long work hours are to be cut short. Late work nights with cups of tea have transformed into tea parties and chaperoning little princesses around the state, to all their most pressing affairs. Vacationing in the north is being explored.

Actually Madame de Thaler has been most good about the past few years, when I have been just dreadfully preoccupied. I will be happy to accommodate her, with quiet dignity. Even if I’d much rather be in the company of gentlemen, conducting business affairs, than in the company of children, conducting games of merry-go-round.

FREE SCOTLAND

The mighty Scottish nation is putting America’s oldest enemy, the British Empire, back to task. Set those royals low, chaps. Pave the way for secessions in Spain, China, Canada, Mexico, and Russia. But don’t you lot in southern California go getting any ideas.

It is absolutely comical the way the Scottish referendum is being spun as a life or death choice for the world. As if we should all of us fret over the implications of five million people deciding they’d like to change how they vote for their incompetent leadership.

The number of legitimate financial institutions screaming about recession is predictable. A third of the UK forming a new government would probably sink the pound sterling and throw into question a lot of debt responsibilities.

So speak up then; who feels bad for the bankers and financiers who might have to rebalance their currency and interest rate bets?

The NATO distraction is by far the most ludicrous of all of the arguments. Oh yes, Scotland will not be a part of NATO immediately, opening them up to attack from foreign enemies. This would be a most terrible risk for this hated nation of peoples.

I am certain that Scotland’s arch nemesis, the Swedes, have already begun plotting to sack Scotland in the peace lull that will ensue. Russian warships will be in Scottish territorial waters any day following a “yes” vote, and no one will do anything because Scotland will be merely in the process of re-joining NATO.

The whole of the doom and gloom predictions are typical. This referendum is threatening to shake up the status quo a little, so the entrenched are clocking overtime stirring up fears of this somehow setting off a European crisis, as if the loss of a unified UK will somehow tip the balance.

Let the Scottish cede. Their plans as they have disclosed them sound pretty terrible. They’re going to spend a ton of oil money showering each other with state bought goods until their productivity drops and the wells run dry. I am sure that will work out splendidly for them.

In the meantime, the UK at large will be mildly inconvenienced by a weaker pound and some nagging legal questions, until foreign investment takes advantage of that and employment picks up, and God forbid they might have to actually address stagnant problems with their healthcare entitlement. Meanwhile, the spoiled eighteenth generation of former aristocrats will face taxes on their hundred square mile estates.

The world weeps…

Previous Posts by Mr. Cain Thaler