The Dollar Continues its Collapse Against Oil.
I read the Nasdaq Bubble, the Real Estate Bubble, and now the Oil Bubble as essentially a dollar-collapse phenomenon. Gold appears to be waiting in the wings for its turn.
My solution since the Spring has been to trade in the stock options of the Oil Majors, which have benefited greatly from ramapant skepticism about the future price of crude--which is to say their call options have been extremely cheap at various periods, only to correct upward, nicely.
The upward price correction in the energy stocks is not over. The Oil Majors remain woefully undervalued. The Oil Services Stocks remain however too pricey--as always. (And their call options never cheapen, to boot.)
Longer term, my other solution has been to accumulate the stocks of the Coal Companies. Yes, these too ramp up and down, but with much more volatile sentiment.
What I love about coal as a solution is a future environment of a weak, weaker, and weakening dollar as a butress to this American export. I also love coal as a proxy and as a solution to high crude.
Last week's manic commodity blow off top did likely mark a brief cessation, from a trading standpoint, but frankly I see it as a portent of things to come. Today, copper has finally cracked--a little--so this blow off top is perhaps taking a week or so to ripple through commodity land.
The dollar looks hungry to collapse against anything it can--something old (like real estate), something current (like oil) and maybe something new: gold?
Regards,
LP |
