Market see-saws
A big switch in investment tone is shaping up.
* Profit taking in Agriculture and Energy - They've had a big run
* Delayed dead-cat bounce
Oil prices dropped ~$4 a barrel today. Gas consumption looks to be lower than expected. However, I suspect that a key unstated factor is that the government slowed their re-filling of strategic reserves.
In any case, it's good for DUG and DSX, and bad for MUR.
BTW we have a $0.04 per share dividend on DSX.
MUR I'm not too worried about. They got alittle ahead of themselves and now they are consolidating. A dip below $90 and then I could see them move up to $100.
The puts are no longer as attractive and the Ultrashorts are getting whalloped.
-------------------
Wall Street is encouraged that things may be getting better: we have the combination of easing oil prices and a housing solution from Congress. Add in the threat of higher interest rates in the Fall, and Wall Street will think inflation is going to go away and the economy bought itself some breathing room.
In reality, things will just continue to get worse because it isn't about paying a little less for gas or being able to avoid foreclosure. People are getting fired and consumers have too much debt to buy more stuff. Consumer spending drives our economy, and it isn't coming back anytime soon to the levels that the leaders want.
Take oil, for example. Does a slightly lower oil price suddenly make the economy stronger? Not really.
For consumers, $4 oil or $3.50 oil doesn't really make for dramatic changes. A few dollars a month in gas is not why consumers are slowing their spending on durable goods like washing machines.
For producers, it will be at least 4 months before their energy related costs come down. And even then, the economy isn't going to roar back to life.
And the housing debacle. The dollar will shrivel in the face of an additional $300M spend on housing.
But the perception of improvement is reality for Wall Street and it could spark a rally, which would be bad for our short positions.
* Profit taking in Agriculture and Energy - They've had a big run
* Delayed dead-cat bounce
Oil prices dropped ~$4 a barrel today. Gas consumption looks to be lower than expected. However, I suspect that a key unstated factor is that the government slowed their re-filling of strategic reserves.
In any case, it's good for DUG and DSX, and bad for MUR.
BTW we have a $0.04 per share dividend on DSX.
MUR I'm not too worried about. They got alittle ahead of themselves and now they are consolidating. A dip below $90 and then I could see them move up to $100.
The puts are no longer as attractive and the Ultrashorts are getting whalloped.
-------------------
Wall Street is encouraged that things may be getting better: we have the combination of easing oil prices and a housing solution from Congress. Add in the threat of higher interest rates in the Fall, and Wall Street will think inflation is going to go away and the economy bought itself some breathing room.
In reality, things will just continue to get worse because it isn't about paying a little less for gas or being able to avoid foreclosure. People are getting fired and consumers have too much debt to buy more stuff. Consumer spending drives our economy, and it isn't coming back anytime soon to the levels that the leaders want.
Take oil, for example. Does a slightly lower oil price suddenly make the economy stronger? Not really.
For consumers, $4 oil or $3.50 oil doesn't really make for dramatic changes. A few dollars a month in gas is not why consumers are slowing their spending on durable goods like washing machines.
For producers, it will be at least 4 months before their energy related costs come down. And even then, the economy isn't going to roar back to life.
And the housing debacle. The dollar will shrivel in the face of an additional $300M spend on housing.
But the perception of improvement is reality for Wall Street and it could spark a rally, which would be bad for our short positions.
posted by Andrew at
9:31 AM
1 Comments:
Dug : you need to take profits of 1 to 1.5 bucks every time it goes up and buy back below 27 short term.
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