Since I am presently 90% long, this hardly makes the argument that I’m betting on the end of civilization or any similar nonsense. I’ve been calling for the dollar rally since the beginning of April, and it arrived in a timely fashion. It brought along a friend, however; renewed fear of a double dip.

I just can’t see the more important things, like factory utilization, dropping to where they were during the run in 2009. So I’m not really bearish on the economy; I am however looking for a continued drawdown in stocks, which is why I fled my positions, taking up defensive stances in a water utility company, an agricultural company, and the trodden real estate market.

I was looking for something like this, so I’m fairly composed on the issue.

But I think I could use a little bigger buffer. The last few weeks, my portfolio has bled, and I’d really like it to be neutral until I see the currency issues resolved. Plus, my position sizing is out of wack, with the various impacts any one position has on my portfolio varying wildly (BG is twice the weight of any other position, and it is also psychotic, interestingly enough).

Compare that with my purchase of CCJ yesterday, and I could use a little more cash coming from the re-balancing of the old stock portfolio.

I aim to complete this task on the next available bounce, which is feeling like it could happen today.

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I employed some cash, adding to CCJ for $26.44 a share, making it a full position.

To hell with Angela Merkel, do any of you think she or her supporting politicians will be around by 2022? More importantly, where are they going to find the replacement power sources required to keep capacity running through their lines?

Cut the “green energy” bullshit, it’s not ready and maybe never will be. Hooking up non-uniform energy sources to the grid is a recipe for disaster and requires making the lines absurdly complicated. As a rule, overly complicated technology is harder to fix and easier to break.

For instance, you all remember that massive power outage in the U.S. that struck last decade?

It was caused by a tree and a failed set of sensors.

The power was never reallocated so a tree on a line that was left running succeeded in blowing out the transformers in the entire east coast.

That was with uniform energy sources in controlled environmental settings. And you all want to hook up near random energy sources to the grid and think it’ll work out fine?

We’re nowhere near being able to supplement real energy, like coal or oil or nuclear, with fake energy, like sunbeams and rainbows.

Which means Germany’s options are increasing gas burning plants, or eating their own words.

Merkel is playing to the crowd because she won’t be the one to tell the German people, in a decade or so, that nuclear isn’t going anywhere. She gets to score some quick points, and nothing is changing.

Long CCJ, to the promised land, as environmentalist movements are regularly squashed by people pissed that their iPads keep browning out.

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Did crude begin this down move because some stupid bastards in the middle east were going to raise quotas?

No, it didn’t.

In fact, crude prices got this high in part because OPEC was losing production (although they cheat so much on their own quotas, who knows for sure?).

So don’t get suckered into going long oil because after holding a meeting where they push the press to report that the organization will be raising quotas, they suddenly announce that everything is unchanged. They’re just playing the crowd, trying to get the attention on them and off of the looming strength in the U.S. Dollar and relaxing global economies.

I don’t know if they’re attempting a ploy to support prices of crude, or if they’re just stupid. But really, that meeting was a huge waste of time and since I wasn’t a fan of crude oil before it happened, I’m not about to start cheerleading it now.

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This is the best kind of relief rally there is; one that in no way changes my outlook on the market.

ERX is up over 2% as the equities it tracks push higher. However, the price per barrel of crude oil is down nearing 1%.

So I am both enjoying my core long positions as they receive the blessing of the bounce, while refusing to make changes of any material kind.

I want to see crude push below $95 by the end of the week.

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At least where oil is concerned, as ERX now spirals back below $70 a share.

Sadly, the rest of my positions are getting hammered. If I didn’t have the hedge, the losses would be far more horrific.

Times like this require trust. Do I trust myself and my analysis of my investments? Have I done a sufficiently good job that the pieces I’m holding can weather the storm? My entire plan has been centered around selecting gold amongst garbage and trusting that the garbage man can tell the difference.

If I’ve fucked up, it will hurt extremely badly.

As my entire strategy at this moment revolves around keeping a small amount of cash reinforced with a cracked out hedge against what will hopefully be resilient positions, losses do not deter me now. The deeper we dive, the more profitable it will be when I reverse off the bottom and margin myself long hard.

The game is afoot, friends. And the 9th floor is open for war.

Update:

Take a look at the oil futures.

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I am back in my office, eating a nice French style sandwich, after a pleasant weekend abroad.

I had the pleasure of attending a wedding on Saturday, and spent most of Sunday sleeping in the sun outside.

And today, after preparing myself for a melt up, I’ve so far been gifted both a meltdown in crude, as well as relative resilience in the rest of my portfolio. However, as I write this, it looks like the Dow is correcting upward, so maybe we end up for the day?

Either way, I don’t care much. This market is feeling lazy, but the ball is in the hands of those who would see the market go higher. The opposing view has already scored up, if you follow me.

Yes, it does look like crude is now easing under 1% losses for the day. Late day rally, perhaps, is coming.

I’m not changing my tune, however. After all, my opinion of this market is not based on what the market is doing in the mean or the moment. I’m hanging out at the fringe, where risk management and asset unwinding can’t touch me. But hey, keep feeling comfortable in commodities and, to a lesser extent, treasuries.

I’ll give you a hint: short term treasuries are the most dangerous here. Yet, you all seem to be eating them up. I will dance on your graves if the U.S. delays interest payments, as your money is held in limbo.

My positions remain, AEC, CLP, MGM, BG, CCJ, AWK, short ERX, silver and cash.

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