I got out of mostly all of my position within the first 10 mins — held onto a handful and have seen them drift lower as the general market collapses, only held up for aesthetic purposes via tera caps. The small caps are being bludgeoned to death and I propose the time is near to get overall short the tape. Before I partake, I’ll need to see some confirmation via DEFLATIONARY PRESSURES. With oil hovering the mid $70s, I am not all that comfy making that bet. I am, however, pleased to see the 10yr yields PLUNGE below 1.4%, suggestive that inflation is in fact TRANSITORY and what you’ve seen in lumber recently is nothing more than an opening salvo into the full collapse of the inflation trade.
My gains have bee sawed by 2/3rds, after a nice +120bps bump and I am now trying to maintain +50bps with 80% cash.
Although it looks grim and I am biased to believe the time is near to bet against the tape, I am always on the lookout for trades and recent trends have been to fade morning spikes and buy back after 10am.
Let’s see if that holds true today.
If you enjoy the content at iBankCoin, please follow us on Twitter
Inflation is not “transitory.” At the grocery checkout this morning, the fat lady in front of me was complaining that the Twinkies are the same price but much, much smaller.