The rally of the past 5 weeks was built on a house of sugar. It was an alluring idea, one wrought with fantasy and wonder. The global economy, out of nowhere and without reason, was bottoming and 5 years of broad commodity sell offs were coming to an abrupt end. Steel prices were on the mend. Copper and oil careened higher, helping the shares of WLL, FCX and many other surge to recent heights.
While nothing is etched in stone and it’s all very possible that the house of sugar might solidify and become a monument for decades to come, it’s not very likely, is it?
Don’t look now, but oil and copper are on a losing streak, damaging the narrative of reflation and the need for higher interest rates.
Conversely, money keeps pouring into treasuries. Why do I call it an ark? It’s a play on words, really. It symbolizes safety and a method by which the layman, or giraffe, might escape the catastrophic floods to come. In this case, the floods will be more in a metaphorical sense, as a deluge of sellers hit the market in a frenzy to sell what’s rapidly losing value.
I remain 50% short XLE, 25% long TLT and 25% long SPY.
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The Ark.
Crazy that MS reiterated a $43 PT on FCX yesterday.
The SPYs are trying to reverse. If so, the Fly has a perfect day. 3 for 3.
What instrument do you use to short XLE?
I’ll take this one.
Enter a trade for a short on XLE etf stock.
I bought DUG for my IRA when I saw that XLE might be a good short. I will be selling DUG by Friday.
We’re in a policy driven market, so you can’t trust the models. When policy finally controls the markets, you definitely want real assets, because things will eventually come crashing down. The policy wonks get it wrong more often than not.
lolz grandma TINA says “get off the ark”
sold NUGT lolz thanks grandma
Chinese imposed new property curbs last night. Also that Arbitrage is going down so hard cuz China keeping Yuan stronger vs Grandma Yellen.