Saturday, 16 August 2008
Banks, tanks and crocks of gold
Well the collapse in gold proved to be as spectacular as predicted. Extreme volatility as the commodity bulls battled it out with the sellers - the FTSE jarred by a massive selloff of miners, otherwise it might have been up 50 pts. What a day! Flash is too tired to post a proper blog but in lieu of that here's quite an amusing exchange - if you follow the sequence of events and posts as Thursday unfolded. Flash's fund is now up 300% from February. Not a bad return at all. He's cut back the risk in his portfolio and is running just a few dow longs, a couple of S and P longs, a Nasdaq long and most of the aforementioned equities (although Workspace group collapsed today, he's planning to buy some more shares while they're cheap), and the short EUR/USD, short GBP/USD and short EUR/JPY trades. And still short gold from 977!!! Picked up some bank shares today - HBOS - risky, Lloyds TSB and more Barclays. Gold at $720? Possible. Perhaps even $650. Getting very bullish on equities, particularly large cap, resilient big retail brands which look pretty cheap. Even Woolworths! The only things (and they're big things) that might stop the Dow is, in Flash's view, yet another major financials car crash or more middle-east/caucasus trouble. But with inflation the top news headline and recession splashed all across the papers, Flash's attention is turned more to what happens post-slowdown. That's why he's buying as many equities as he can lay his grubby paws on. Even Crocs went up today. So that's some sort of a sign.
Thursday, 14 August 2008
Profit taking
Well, the short commodities bet doesn't look like quite such a sure fire thing - it's been a good run and so Flash has reduced his exposure to short gold quite a bit, just leaving a small short running. And with a spike back up in oil and gold the old spectre of short financials/retailers/long commodities has returned with something of a vengeance over the last couple of days, leaving the Dow longs looking a bit less healthy. But Flash is persisting with this theme, seeing the current turbulence more as a shakeout than another decisive move downwards. He does, for now, have a hedging short position on the dow in place from 11800 which in hindsight proved to be an even better idea than it seemed at the time.
Flash has, however, increased his exposure to short EUR/USD. He thinks that sterling's collapse yesterday could easily be followed through today in EUR/USD when attention is drawn to eurozone economic data. He's pared back the NZD/USD and AUD/USD shorts; if commodities are on the rise and more horrible US data comes out the dollar is probably due for a little bounce. On the other hand the antipodean central banks are actively talking about cutting rates which has forced a small defacto currency devaluation there, and the sense is that a lot of dealers have been abandoning the carry trade, which has propped up demand for these currencies. It's hard to see how the UK and te ECB could put rates up unless they want to crash the whole of europe into deep recession. On the other hand there may perhaps be some scope in the US for some rate increases later this year and into 09, making the USD a more attractive prospect. A further more alarming consequence is possibly, at least according to Flash Rabbit's rudimentary brain, that declining central currencies against the dollar will have some inflationary effects at home - they will make imports more expensive and make everyone feel less rich. On the other hand the dollar is, in a longer term view, probably somewhat oversold - it's had more than 2 years of rapid decline and some big corrections are necessary. And if the dollar strengthens then commodity prices drop, which in turn takes some inflationary pressure out.
Equities aren't looking so happy. Kingfisher spectacularly collapsed in the wake of the BoE's comments about recession and the dire inflation data; all the financials have taken a hammering; and BA has dropped back a lot in the wake of higher oil. However, ever contrarian, Flash has been adding some long equity positions - he's bought more of Barclays and Lloyds TSB; bought a bit of BSkyB, and some of Cadbury - who will gain from the drop back in food and raw material costs - if it persists. He's been making sure there's plenty of margin on all these positions given how unpleasant and volatile trading has been over the last couple of days. He's pulled out some cash from the trades and is racking his brains to find a new angle - he's beginning to think that going back short on the airlines and anything to do with expensive consumer discretionary spending might be a good idea if oil continues to head up above 120 a barrel. But perhaps if it stabilises between 112 and 116 - he's been targeting a drop back to the 100 mark - things won't look quite so bad - and a strengthening dollar will also put some downward pressure on oil and gold. And there's no evidence that the slowdown in consumer spending and demand has reached anything like a bottom, especially in europe. Which means that on balance he's still short commodities, long equities, and long USD.
Flash has, however, increased his exposure to short EUR/USD. He thinks that sterling's collapse yesterday could easily be followed through today in EUR/USD when attention is drawn to eurozone economic data. He's pared back the NZD/USD and AUD/USD shorts; if commodities are on the rise and more horrible US data comes out the dollar is probably due for a little bounce. On the other hand the antipodean central banks are actively talking about cutting rates which has forced a small defacto currency devaluation there, and the sense is that a lot of dealers have been abandoning the carry trade, which has propped up demand for these currencies. It's hard to see how the UK and te ECB could put rates up unless they want to crash the whole of europe into deep recession. On the other hand there may perhaps be some scope in the US for some rate increases later this year and into 09, making the USD a more attractive prospect. A further more alarming consequence is possibly, at least according to Flash Rabbit's rudimentary brain, that declining central currencies against the dollar will have some inflationary effects at home - they will make imports more expensive and make everyone feel less rich. On the other hand the dollar is, in a longer term view, probably somewhat oversold - it's had more than 2 years of rapid decline and some big corrections are necessary. And if the dollar strengthens then commodity prices drop, which in turn takes some inflationary pressure out.
Equities aren't looking so happy. Kingfisher spectacularly collapsed in the wake of the BoE's comments about recession and the dire inflation data; all the financials have taken a hammering; and BA has dropped back a lot in the wake of higher oil. However, ever contrarian, Flash has been adding some long equity positions - he's bought more of Barclays and Lloyds TSB; bought a bit of BSkyB, and some of Cadbury - who will gain from the drop back in food and raw material costs - if it persists. He's been making sure there's plenty of margin on all these positions given how unpleasant and volatile trading has been over the last couple of days. He's pulled out some cash from the trades and is racking his brains to find a new angle - he's beginning to think that going back short on the airlines and anything to do with expensive consumer discretionary spending might be a good idea if oil continues to head up above 120 a barrel. But perhaps if it stabilises between 112 and 116 - he's been targeting a drop back to the 100 mark - things won't look quite so bad - and a strengthening dollar will also put some downward pressure on oil and gold. And there's no evidence that the slowdown in consumer spending and demand has reached anything like a bottom, especially in europe. Which means that on balance he's still short commodities, long equities, and long USD.
Tuesday, 12 August 2008
Overnite sensation...and a nasty hangover
Flash Rabbit couldn't believe his eyes when he woke up this morning. The dollar had strengthened even more and gold had collapsed. He's now seriously in the money and has left things pretty well as before, but took the pause in gold as an opportunity to move some stops and do some profit-taking. However the gold collapse shows no sign of abating - Flash's next target for gold is around the $720 mark - if it can do -$150 in a couple of weeks he doesn't see any reason why it couldn't do more. So most of the short positions remain firmly intact, although he took a grand out to pay some of the bills.
It's been a pretty thrilling couple of days and Flash has been exploiting leverage to the full which has led to some pretty dramatic moves in his account - he nipped out for half an hour around lunchtime and came back to a 40% pullback as the indices and currencies gyrated which was a bit of a shocker - but fortunately he's learnt the lesson of keeping enough margin and didn't blow up any money. He's getting pretty nifty at using some of the margin from the more profitable trades to set up some leverage. And he's keeping those currency trades going - has taken a bit of profit on the EUR/USD short but otherwise they are all running well. He's expecting a bit of a fightback from the dollar bears but thinks that momentum is with the dollar (and also, in its own way, the yen). Especially when the full depth of horror of the economic data coming out of europe hits home.
What Flash can't figure out is that even with all the chaos and anxiety in Georgia that energy and gold still managed to keep their descent, but it all went a bit screwy today even as the Russians pulled out. Precisely the opposite of what one might have expected - but it became a bit clearer watching Bush late last night that the USA had no intention of starting World War 3. Today's turbulence must have had something to do with another forecast of higher oil prices and the bad guys coming out to play the short financials/long energy trade - they just can't keep off it...He had a nailbiting day yesterday when he was full on short gold and long dow, but holding the view - and taking the risk of holding some heavily leveraged currency positions overnight - really paid off. He takes this as a sign that there is a major structural adjustment in progress, and thus is sticking to his guns.
A few regrets - not hanging on to the UAL Corp long - they're up a ridiculous amount from when Flash bought them at 693, and he wishes he hadn't jettisoned them in all the turbulence; but the BA long and Barclays long have made up for that. The equity positions are all looking pretty positive; he's still holding on to that long Dow, and has added bits to it along the way; he's also long FTSE, S & P and now Nasdaq as well. Even with today's heavy financials sell-off he thinks there's tons of value still to be found in equities, especially in some very underpriced retail and property stocks - so he's added to his long positions in Workspace Group, Woolworths, Kingfisher and Blacks Leisure. D1 Oils has also been excellent - sitting at 40p and he bought them at 17p. He bought a bit of Cadbury and currently has enough profit on that trade to buy around 2 bars of Dairy Milk - not so impressive; He's keeping on that too, and has even added to his long in Crocs! We'll see.
Generally - it's the usual problem - too many choppy trades, and not holding his nerve and his view for long enough. But he is learning, and the cash is now flowing in. Just as well because he hasn't got any cash coming in from anywhere else right now. Very risky. But very rewarding.
It's been a pretty thrilling couple of days and Flash has been exploiting leverage to the full which has led to some pretty dramatic moves in his account - he nipped out for half an hour around lunchtime and came back to a 40% pullback as the indices and currencies gyrated which was a bit of a shocker - but fortunately he's learnt the lesson of keeping enough margin and didn't blow up any money. He's getting pretty nifty at using some of the margin from the more profitable trades to set up some leverage. And he's keeping those currency trades going - has taken a bit of profit on the EUR/USD short but otherwise they are all running well. He's expecting a bit of a fightback from the dollar bears but thinks that momentum is with the dollar (and also, in its own way, the yen). Especially when the full depth of horror of the economic data coming out of europe hits home.
What Flash can't figure out is that even with all the chaos and anxiety in Georgia that energy and gold still managed to keep their descent, but it all went a bit screwy today even as the Russians pulled out. Precisely the opposite of what one might have expected - but it became a bit clearer watching Bush late last night that the USA had no intention of starting World War 3. Today's turbulence must have had something to do with another forecast of higher oil prices and the bad guys coming out to play the short financials/long energy trade - they just can't keep off it...He had a nailbiting day yesterday when he was full on short gold and long dow, but holding the view - and taking the risk of holding some heavily leveraged currency positions overnight - really paid off. He takes this as a sign that there is a major structural adjustment in progress, and thus is sticking to his guns.
A few regrets - not hanging on to the UAL Corp long - they're up a ridiculous amount from when Flash bought them at 693, and he wishes he hadn't jettisoned them in all the turbulence; but the BA long and Barclays long have made up for that. The equity positions are all looking pretty positive; he's still holding on to that long Dow, and has added bits to it along the way; he's also long FTSE, S & P and now Nasdaq as well. Even with today's heavy financials sell-off he thinks there's tons of value still to be found in equities, especially in some very underpriced retail and property stocks - so he's added to his long positions in Workspace Group, Woolworths, Kingfisher and Blacks Leisure. D1 Oils has also been excellent - sitting at 40p and he bought them at 17p. He bought a bit of Cadbury and currently has enough profit on that trade to buy around 2 bars of Dairy Milk - not so impressive; He's keeping on that too, and has even added to his long in Crocs! We'll see.
Generally - it's the usual problem - too many choppy trades, and not holding his nerve and his view for long enough. But he is learning, and the cash is now flowing in. Just as well because he hasn't got any cash coming in from anywhere else right now. Very risky. But very rewarding.
Friday, 8 August 2008
Big Time
Wow. A swift overnight move in currencies has left Flash Rabbit with a very big grin on his fat, greedy face. It's been a rocky couple of days - if the market is preparing for some seismic shifts there are bound to be earth tremors but the payoff from this earthquake looks set to be very significant indeed.
Flash's fund is now up 175%. That's right, 175% from a February start. I wonder if any of the major hedge funds have managed that rate of return? OK, Flash is only trading in pennies but this just shows what is possible...
Interestingly it's been in the currency trades where Flash has had the most success. His conviction call - that the euro is headed for a fall and that the dollar is poised for a comeback - worked beautifully, especially after he spotted what seemed like a top in EUR/JPY and it tumbled spectacularly during Trichet's press conference yesterday, and hasn't looked back...
The 'what ifs': -
what if he'd stayed up just an hour later last night, spotted the big currency moves gathering pace, and doubled up his currency positions? He'd probably have been up 300% by now.
what if he'd held his nerve on some of his earlier calls, rather than chickening out at the first sign of trouble - for had he held the original short GBP/USD position at a mere £1 a point from 19995 or thereabouts he would be £600 better off by now. As for EUR/USD, well...from 15700 to here would be a total monster.
It's not been comfortable - when this happens:
or this happens and you're on the wrong side of the trade (Flash was on the right side, being short EUR/JPY, but got the shock of his life, having just doubled up on short AUD/USD when this happened - however he recovered his composure and held it together...).
And if the markets do manage a sustainable bounce (hence being long of both FTSE and Dow - positions which he doubled up this morning, and added an S and P long) then Flash sees no reason for these macro trends to continue on the back of a downward adjustment in commodity prices as the developed world heads if not for outright recession, at least a considerable slow-down. And a slowdown, in Flash's book at least = reduced demand, reduced consumption and some cooling in the commodities bubble. Add to that a general drive for energy efficiency/waste reduction and you have a considerable challenge for the commodity bulls. Hence Gold's spectacular fall from grace. And if some of the hot money comes out of oil the test for it will come at around 100 a barrel, where Flash's guess is that there will be a pile of hedging and it might signal a bit of a leg back up for commodities. That's the point he will close down all but a small short gold position. But the dollar's rise will take some of the pressure out of the oil price too.
Shares going remarkably well too. Currently Flash is long of Workspace Group, Lonrho and Tribal (all making a comeback?); Woolworths (up 15% in the last two days!); Intel (a big winner over the last couple of weeks); Kingfisher (a play on some recovery in retail and a bottoming out of the property market?) - up from 119 to around 132 in a couple of weeks); Barclays from 261 (this has been a monster); BA - up around 30%; D1 Oils - has doubled from Flash's entry point of 17p. Plus the two Powershares Global Water and Water Resources ETFs.
The wobbly shares - Crocs (what was he thinking?); Axeon Holdings; Blacks Leisure Group; Man Group (has ridden out the dips well but is now dipping just as the rest of the market seems to be recovering); BT; Stanelco.
The plan is to hold just like this; and to ride this out. It's a big adjustment - especially in currencies - and if the euro goes, his guess is that it will go in style, all the way back down to dollar parity or thereabouts. And that would signal a complete realignment - but that's about right given how bad the economic news coming out of europe is at the moment.
Flash's fund is now up 175%. That's right, 175% from a February start. I wonder if any of the major hedge funds have managed that rate of return? OK, Flash is only trading in pennies but this just shows what is possible...
Interestingly it's been in the currency trades where Flash has had the most success. His conviction call - that the euro is headed for a fall and that the dollar is poised for a comeback - worked beautifully, especially after he spotted what seemed like a top in EUR/JPY and it tumbled spectacularly during Trichet's press conference yesterday, and hasn't looked back...
The 'what ifs': -
what if he'd stayed up just an hour later last night, spotted the big currency moves gathering pace, and doubled up his currency positions? He'd probably have been up 300% by now.
what if he'd held his nerve on some of his earlier calls, rather than chickening out at the first sign of trouble - for had he held the original short GBP/USD position at a mere £1 a point from 19995 or thereabouts he would be £600 better off by now. As for EUR/USD, well...from 15700 to here would be a total monster.
It's not been comfortable - when this happens:
or this happens and you're on the wrong side of the trade (Flash was on the right side, being short EUR/JPY, but got the shock of his life, having just doubled up on short AUD/USD when this happened - however he recovered his composure and held it together...).
And if the markets do manage a sustainable bounce (hence being long of both FTSE and Dow - positions which he doubled up this morning, and added an S and P long) then Flash sees no reason for these macro trends to continue on the back of a downward adjustment in commodity prices as the developed world heads if not for outright recession, at least a considerable slow-down. And a slowdown, in Flash's book at least = reduced demand, reduced consumption and some cooling in the commodities bubble. Add to that a general drive for energy efficiency/waste reduction and you have a considerable challenge for the commodity bulls. Hence Gold's spectacular fall from grace. And if some of the hot money comes out of oil the test for it will come at around 100 a barrel, where Flash's guess is that there will be a pile of hedging and it might signal a bit of a leg back up for commodities. That's the point he will close down all but a small short gold position. But the dollar's rise will take some of the pressure out of the oil price too.
Shares going remarkably well too. Currently Flash is long of Workspace Group, Lonrho and Tribal (all making a comeback?); Woolworths (up 15% in the last two days!); Intel (a big winner over the last couple of weeks); Kingfisher (a play on some recovery in retail and a bottoming out of the property market?) - up from 119 to around 132 in a couple of weeks); Barclays from 261 (this has been a monster); BA - up around 30%; D1 Oils - has doubled from Flash's entry point of 17p. Plus the two Powershares Global Water and Water Resources ETFs.
The wobbly shares - Crocs (what was he thinking?); Axeon Holdings; Blacks Leisure Group; Man Group (has ridden out the dips well but is now dipping just as the rest of the market seems to be recovering); BT; Stanelco.
The plan is to hold just like this; and to ride this out. It's a big adjustment - especially in currencies - and if the euro goes, his guess is that it will go in style, all the way back down to dollar parity or thereabouts. And that would signal a complete realignment - but that's about right given how bad the economic news coming out of europe is at the moment.
Tuesday, 5 August 2008
Drawdowns and margins
Another day, another set of small drawdowns, brought on by the usual cardinal sin of adding too many positions with not enough margin. When will Flash Rabbit ever learn to hold his bets for long enough to allow them to do their work, and give them enough leeway not to get killed by turbulence? Getting spooked by the dow is one thing but the basic view remains correct - short gold (more success), long USD against EUR, GBP, NZD and AUD, and long the various equities detailed below. EUR/JPY short and NZD/JPY shorts both stopped out today - the former for a moderate profit and the latter for a moderate loss - but they'll get reinstated in the fullness of time.
Friday, 1 August 2008
I love you just the way you are
Flash Rabbit has done absolutely nothing today. Niente. Nada. All positions completely unchanged, payroll jitters and GM's gorefest notwithstanding. And it's paid off beautifully so far. He's refusing to be punked by the volatility and is holding his view. So far up £200 since yesterday. Not bad for no work.
Actually that's a small lie. He added a sneaky NZD/JPY short in the middle of the night, and doubled up on his NZD/USD short. Those and short Gold, short EUR/JPY, have been his best trades ever this year. And he's moved the stops so he can't lose any money. Pretty simple.
The plan is to hold this view, wait and see.
Actually that's a small lie. He added a sneaky NZD/JPY short in the middle of the night, and doubled up on his NZD/USD short. Those and short Gold, short EUR/JPY, have been his best trades ever this year. And he's moved the stops so he can't lose any money. Pretty simple.
The plan is to hold this view, wait and see.
Chopped by the changes
Well, the headline trades - short gold from 977 and long Dow from 11180 are still firmly in the money, but under the surface of this apparently smart profit Flash has been burning cash, chopping and changing way too much.
The last 24 hours have been an object lesson in bad risk management and over-trading. If Flash hadn't been greedily moving stops and merrily adding long equity positions, nicked from his margin, thinking how smart he was and how right he was, he would have about 10% more of his meagre fund still in play rather than giving it up to the gods of market arrogance. A few lessons to remember:
- run smaller positions over longer time frames - i.e. had he not taken profit on a good chunk of the gold position when it hit 926 earlier in the week, and opened up new ones from the 920s, which he left open smugly thinking it would go down in a straight line, only to have them smashed to bits when the market went into cataclysm mode, then he would have a chunk more cash by now.
- don't try to second guess the market. watch, observe, set a predetermined entry point and then act if the conditions look right. Trying to put a covering short early evening on Weds on the Dow at 11480 (roughly today's pivot point) proved to be a total disaster because Flash hadn't put the margin in place. With a big margin it could have been a good little trade - partly because Flash had at the back of his mind that the Dow was getting a little overbought given how awful some of the data is - but instead it just lurched into profit, out of profit, and then got stopped out for a loss before the whole edifice came whizzing down in seconds at 1.30. And then to cap it all Flash decided, late on in the morning, that he'd not made enough cash (as if 20% up in 2 days wasn't enough) added another Dow long from 15600, and that got killed in seconds as well. Stupid. Poor judgement.
- stick to your guns if the trades are going well, even if the market suddenly moves. With the canyon in the dollar brought on by what Flash thought was a wild over-reaction to - by recent standards - some fairly modest figures - (omens of things to come tomorrow?) it was inevitable that the GBP/USD position and the EUR/USD positions were going to get taken out by stops, for the sake of preserving capital, but Flash went into full blown panic mode and shut down his very profitable AUS/USD and EUR/JPY shorts. He's back in them now but at the cost of the spread and with a much reduced margin for spikes, having been caned by the volatilty. EUR/JPY hardly moved at 1.30 but flash took out his fantastic short from 16900 - a complete over-reaction. It's back in now but from 16866 - not nearly such a good level..
None of this helped by the fact that the SB company servers were overloaded, the connection was ropey (Kids downloading Dr Who on the iPlayer next door) so everything looked and felt like a slow motion car crash for a while. Rank amateur, crap trading.
However, the shares are, for now, nearly all doing fairly well. D1 Oils sprang into life today on positive cash forecasts and better focus, BA has been a dream (however, results tomorrow may cause some wobbles), Barclays is behaving itself and even Crocs hardly moved downwards amidst the volatility. Flash can't help thinking that this afternoon's sell off was a ludicrous over-reaction - he understands profit taking but this was a herd of crazy bears. On what basis? The crack pipe of short equities, long commodities? As Macro Trader says - a classic case of lurching between disinflation and inflationary bust.
And all the while the dollar was strengthening and oil was coming back down. So what the hell was going on is completely beyond him.
Flash has cut the Ford long as it's just too much effort. Likewise UAL Corp. In their place he has discovered two ETFs that he's taken out a long position in - the PowerShares Global Water Portfolio and the PowerShares Water Resources Portfolio. Both showing a modest profit in 2 days.
He's planning to leave everything alone as much as possible tomorrow, go out, and let things work through - that's what stops are for, isn't it?
The last 24 hours have been an object lesson in bad risk management and over-trading. If Flash hadn't been greedily moving stops and merrily adding long equity positions, nicked from his margin, thinking how smart he was and how right he was, he would have about 10% more of his meagre fund still in play rather than giving it up to the gods of market arrogance. A few lessons to remember:
- run smaller positions over longer time frames - i.e. had he not taken profit on a good chunk of the gold position when it hit 926 earlier in the week, and opened up new ones from the 920s, which he left open smugly thinking it would go down in a straight line, only to have them smashed to bits when the market went into cataclysm mode, then he would have a chunk more cash by now.
- don't try to second guess the market. watch, observe, set a predetermined entry point and then act if the conditions look right. Trying to put a covering short early evening on Weds on the Dow at 11480 (roughly today's pivot point) proved to be a total disaster because Flash hadn't put the margin in place. With a big margin it could have been a good little trade - partly because Flash had at the back of his mind that the Dow was getting a little overbought given how awful some of the data is - but instead it just lurched into profit, out of profit, and then got stopped out for a loss before the whole edifice came whizzing down in seconds at 1.30. And then to cap it all Flash decided, late on in the morning, that he'd not made enough cash (as if 20% up in 2 days wasn't enough) added another Dow long from 15600, and that got killed in seconds as well. Stupid. Poor judgement.
- stick to your guns if the trades are going well, even if the market suddenly moves. With the canyon in the dollar brought on by what Flash thought was a wild over-reaction to - by recent standards - some fairly modest figures - (omens of things to come tomorrow?) it was inevitable that the GBP/USD position and the EUR/USD positions were going to get taken out by stops, for the sake of preserving capital, but Flash went into full blown panic mode and shut down his very profitable AUS/USD and EUR/JPY shorts. He's back in them now but at the cost of the spread and with a much reduced margin for spikes, having been caned by the volatilty. EUR/JPY hardly moved at 1.30 but flash took out his fantastic short from 16900 - a complete over-reaction. It's back in now but from 16866 - not nearly such a good level..
None of this helped by the fact that the SB company servers were overloaded, the connection was ropey (Kids downloading Dr Who on the iPlayer next door) so everything looked and felt like a slow motion car crash for a while. Rank amateur, crap trading.
However, the shares are, for now, nearly all doing fairly well. D1 Oils sprang into life today on positive cash forecasts and better focus, BA has been a dream (however, results tomorrow may cause some wobbles), Barclays is behaving itself and even Crocs hardly moved downwards amidst the volatility. Flash can't help thinking that this afternoon's sell off was a ludicrous over-reaction - he understands profit taking but this was a herd of crazy bears. On what basis? The crack pipe of short equities, long commodities? As Macro Trader says - a classic case of lurching between disinflation and inflationary bust.
And all the while the dollar was strengthening and oil was coming back down. So what the hell was going on is completely beyond him.
Flash has cut the Ford long as it's just too much effort. Likewise UAL Corp. In their place he has discovered two ETFs that he's taken out a long position in - the PowerShares Global Water Portfolio and the PowerShares Water Resources Portfolio. Both showing a modest profit in 2 days.
He's planning to leave everything alone as much as possible tomorrow, go out, and let things work through - that's what stops are for, isn't it?
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