This is the question I am getting many times right now. To which I reply it may very well be. If it is not, then it will be soon.
Not being a timing expert, I can only go with what should be. As we look at the gold market jumping 9 yesterday and the grains moving once again. What really is getting my attention is the dollar. It appears that the run up over the last few weeks seems to be at a stall.
If you are in the commodities as a bull for a while longer, this has you excited. After all since oil is traded in dollars, any weakness in the dollar spills over into higher oil prices. If you are not of the opinion of this blog author, then you are going to be upset with the prices of everything marching higher.
Corrections can be very gut wrenching. Especially watching the entertainment channels. I too see what you see. Instead of getting fearful, I smile and enjoy the pundits. It is almost as fun as watching the Olympics. The Real Estate market has bottomed, the oil bubble has popped, gold investors are taking a beating...Yes I see it too.
Fundamentally, the housing has more to go, what has changed over the course of a year since it first reared it's ugly head. Only billions upon billions poured into the mess. The same billions poured in at cheap interest that caused these bubbles in the first place. That has not changed. While the U.S. has drop slightly in consumption, that has been taken up world wide by many other nations. We are still as a world consuming more than we are producing. That is the fundamental picture.
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2 comments:
Dell,
If I wanted to enter a new diag position on GDX right now, what strike prices would you do?
Also, what are you thinking on rolling your XLE? Are your changing your strike prices? Or are you rolling your long out further just because the prices are down? I typically use too high strike prices and lose too much on these downturns.Debbie
I will have to look at Octobers options Monday as they start to trade. (since Aug expired yesterday).
As for the strike prices I am staying with the 74 for now.
GDX while I am terribly bullish on these and have loaded up on them over the past year, now is even a better time to load up. I would use a diagonal since you are pretty close to the bottom of the correction and it should rally quite nicely. Something like a 35 long 40 short. I have not looked at the premiums here but if you can get enough premium from the short side to take care of the time decay for a month, then you are sitting pretty for a strong rally. You will get the full 5 dollar upside.
Now having said this, as conservative as I am, I would buy a '10 35 and sell the Sept 36. But then you dont have to be a conservative as me.
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