I’m Sitting This Out

My predilection is to remain on the sidelines. Even if we should have a little higher to go.

I bit into this rally in its infancy, back in October. Myself and a few others grabbed the entire length of it, and my accounts show that. There is zero reason to sit around, crying about a few percent missed out on.

Now, the jobs numbers looked good, and so did a host of other things that came out yesterday. But we are still running on Christmas, and this isn’t the first time we’ve had some good jobs numbers that got sold.

Meanwhile, I am watching an exact repeat of what happened last year. Horrible economic numbers that begin in Europe and spread across economic forecasts, causing panic. Eventually, something sets off the euro (bonds, elections, riots), and suddently, the dollar starts to get strong.

Right around the same time, manufacturing and industry reports start bleeding from their faces, and energy use plummets. I don’t know if the two (euro and manufacturing) are directly related, or if it’s just some sort of sick, divine joke. But the two factors intertwine into a web of chaos that bloodlets indices for a quick 10% washout. And by that, I mean, nobody owns the indices, so if you’re stuck with the wrong positions, you get creamed by 20-30%.

I’m staying off the field. I’ll let those of you who were short and doubting until mid January put your neck on the line here.

Positions: 30%+ cash, AEC, CLP, CCJ, BAS, RGR, physical silver

Hedges: EUO, SCO