How does an inverted yield curve square with your deflation thesis? Are you thinking 2% long bond?
I think the long commodities/short dollar trade is long in the tooth and due for a substantial counter trend move.
You can make a lot of money as a momentum trader. It's a style that has never fit my personality and therefore I don't embrace it. It feels like a sheeple trade and it always ends bad. Of course, if you know when to peel out ahead of the herd, you'll make a killing.
To me, the biggest disconnect in the stock market right now is that somehow the bottom is in. Housing has bottomed, financials are near bottom and the contagion won't spread from here. It's human nature to be optimistic. I think this is just plain wrong.
This massive bubble burst is only now beginning to metastasize. Economy is shedding jobs, job openings are evaporating, savings rate is heading higher, discretionary spending capacity is plunging.
Aside from the obvious US consumer shorts, I think the most profitable shorts from here are the areas that went up the most over the past 4 years that people think are immune from the fallout. These are cyclicals, foreign stocks, commodities, industrial metals.
I like one of Dennis Gartman's simple rules of trading. In a bull market, go long or neutral but never short. In a bear market, go short or neutral but never long.
We're in a bear market. I see no reason to have any longs on my sheets. |
