iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,324 Blog Posts

Hedged and Long Oil — Heavily Cashed Up

I sense we spill lower at the open. I mismanaged my book after 3pm and gave back half my gains, finishing up 1% — a solid day overall. I was confused as to whether to go naked long or hedged and I ended up with a 2x TZA position to hedge against my oils.

Best case: small caps rummage lower in the morning but oil is up.

Worst case: oils knife lower and market gaps higher.

For whatever happens, I am 55% cash and will be watching the open closely. If you’re not trading the open — you are missing out on one of the very few windows to trade fast in the entire day. From 9:30 to 10:15am there is extreme volatility and then we settle in. If you’re done 2% by 10:30am, odds are you’ll be down all day and vice versa.

The market is sick and seasonally prone to large declines. The Evergrande business was just an excuse to bid lower, since now the market is sooo worried about energy prices, inflation, and higher rates.

This too is transitory.

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7 comments

  1. purdy

    Bah …this is the end. Short everything cept food and toilet paper and the means to defend them.

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  2. Mr. Cain Thaler

    The 1970s also ended eventually.

    How does this justify a 37x Shiller CAPE ratio in a rising rate environment? We have all the price multiples of 1999 combined with more supply shocks than the Saudis could have dreamed of giving us.

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    • Dr. Fly

      I cannot even begin to consider fundamentals. They haven’t mattered in so long.

      SNOW is trading 110x sales

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      • Mr. Cain Thaler

        (Chuckles) I know it’s just absurd. Yet what would be more appropriate to the character of 2021 than them suddenly mattering again?

        Anyway interest rates are going higher. Look at food prices, still marching up even after stocks dropped so much today.

        That hasn’t happened in a decade. Commodities spent this decade collapsing with equities any time bonds ran. Because of Scott B’s “we are Japan” observation I believe. But that habit is breaking.

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    • edge

      It’s all about the billionaires. They have more money to invest than the system can handle.
      It’s either buy SNOW or stash bales of 100 dollar bills in a warehouse.

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  3. Mr. Cain Thaler

    Corn, oats, wheat, soybeans, sugar, cocoa, cotton all HIGHER.

    Yields will be going up.

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  4. the_wolf

    I always knew you were an oil man

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