If you agree with the assessment that we are in for a long term inflation including economic stagnation, then the pullback in the natural resources today is good to see. Long time readers know I have been patiently waiting for the energy pullback to get back in. Not ready yet, but it is getting close.
Remember nothing goes straight down or straight up. We take these as opportunities to get in.
So looking to get long diagonals on XLE and calendars on KOL.
Patience here.
On a political note here, we are seeing winds from Washington that I do not like. But then most of what comes out of there is not good for investing. Only pandering to the masses. What has me concerned is the blame game. Us "speculators" driving up prices and manipulating them. I wish this were true, then I could know with certainty a direction and capitalize on it.
What is really going on is the masses are hurting and need a scapegoat. That scapegoat is anyone that is prospering during this meltdown.
The question is not what the gov will do, that is a given. The question is how will that effect trading. We will stay tuned.
Reality is that traders make it liquid to get in and out of positions. If the gov limits this, then you can make a trade and if wrong take a long time to get out. Take Real Estate for example. If that market were liquid, the first sign of trouble you could get out with a small loss. However trying to sell in a buyers market is a killer. What I hear coming out of Washington will only make the housing problem linger much longer.
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