Lucky for you, when Obama campaigned on Change, what he really meant was the amount of money Americans would have left after food and transportation costs. Plus, when Bush was in charge he didn’t give military operations pansy names. So how can you profit off record levels of American incompetence (besides pawning Nobel Peace Prizes)?
I’ll be the first to admit news has put an end to the easiest market in history to trade. No one could anticipate such an epic week for disaster and uprising with the Earthquake, Tsunami, and Nuclear disaster driving us down and Middle East driving up oil. Since September 2010, the most uninformed man in the world could’ve traded stocks and shown returns comparable to professionals. This market has made one thing clear since early January: that it will never cease to amaze. We’ve sold off almost consistently since the original Egypt news and now we’re just barely holding onto Bernanke’s back as he tries to trudge forward against all the inflation haters. I’ve been very cautious recently, I’ve scalped some uranium for large returns, but for the most part have been and after selling my remaining SLV calls am currently 95% cash. Since the Dow and S&P have been moving sideways, volatility has exploded, thus the opportunity for large returns on select companies and stocks. Where do we go from here?
One thing that is apparent: the American economy runs on Crude Oil – although Dunkin’ Donuts will have you believing otherwise. If the Middle East situation continues to worsen – IE Iran, Israel, and most importantly the House of Saud are involved we’re finished. However, it might be beneficial to the average person. Inflation is out of control even for the countries that can manage estimates showing 8.3% inflation in USA – that will do wonders for the food stamp population. Its common knowledge that oil prices will eventually reach a point of destructive demand – where the lack of people who can afford oil will reduce demand and the price will drop. I expect that to happen over the next two months. But, the reduction in oil prices will coincide with the Dow Jones crashing and all other commodities dropping alongside of it. Crude leaves no survivors in the market nor on the beaches of America. Also, don’t let precious metal lovers try and convince you that gold and silver are immune. If we go down on a broad spectrum, they will as well circa 2008.
Tempted to long some Suncor or Imperial, but I may just sit in cash. Domestic oil will explode if Crude approaches $110. Play defense for the next couple days while the DOW/S&P500 make a decisive move. For right now, cash is king.