Feels like March all over again
Back in March I took a bearish position that contradicted the market's direction. It rallied while I went short.
Same thing again. A market rally is crushing the shorts. Worse, my energy positions are diving with oil. Both are related.
My strategy is to wait.
1. Rally will fizzle – so many companies are missing estimates and showing weakness. It is currently riding high on an oil pullback, but a few dollars lower will not change the realities of the economy. I beleieve that we are heading to a global recession.
2. Oil will stay around $120 and not go below. If it goes below, OPEC will reduce production. Meanwhile, I am betting that the energy companies we bought will show strong results for the next few quarters and the price will rebound. I clearly made two mistakes here: bought too early on the pullback and underestimated the degree to which oil prices would impact the stock prices. I could unwind the positions or wait for 2 quarters of strong results to pull up the prices. That's my strategy for now.
Same thing again. A market rally is crushing the shorts. Worse, my energy positions are diving with oil. Both are related.
My strategy is to wait.
1. Rally will fizzle – so many companies are missing estimates and showing weakness. It is currently riding high on an oil pullback, but a few dollars lower will not change the realities of the economy. I beleieve that we are heading to a global recession.
2. Oil will stay around $120 and not go below. If it goes below, OPEC will reduce production. Meanwhile, I am betting that the energy companies we bought will show strong results for the next few quarters and the price will rebound. I clearly made two mistakes here: bought too early on the pullback and underestimated the degree to which oil prices would impact the stock prices. I could unwind the positions or wait for 2 quarters of strong results to pull up the prices. That's my strategy for now.
posted by Andrew at
6:03 AM
1 Comments:
Average it out …there are still few tensions looming for the oil Iran,Hurricane ,any thing can happen but do not forget this is an election year. Some of these shorts are good for trades not for holding long. The one you have in your portfolio QID and the other one which I tracked FXP both fraud.
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