OK, first of all, why are you reading this? It’s a holiday – go home, relax, spend time with the family!
So why am I posting? Addict that I am, I had to click on CNBC and the futures look awful. I’m not particularly bothered by it as I cut back on everything before I left but I will be taking a bit of a cover on the remaining positions if we trend down.
You can’t put much stock into the movements on a very low volume day like today but the dollar is a train wreck (as we talked about) and (also as we talked about) only China can save us.
It seems we’ve gotten caught with our hands in the international cookie jar and the M3 (which we have talked about a lot), which the government stopped officially reporting in March, has been going up very quickly since then!
Tsk, tsk – sneaky sneaky US Treasury! Naughty, naughty flooding the world with dollars while telling China to float their currency. The annual rate of M3 change is currently 10%, that’s a rate of over $1T worth of dollars being shoved down the throats of international investors every year.
This is more than can sustainably be absorbed!
The situation is so dire that Paulson AND Bernanke are now planning to jet over to Beijing to beg for mercy.
The dollar is at 2 year lows and will rocket gold and oil today so we can go back to the ABX $27.50s as a momentum trade – Tuesday they made a quick 15% as we exited at $1.95.
MRB is back to $4.01 and is always fun but I think this may be a flush for gold shorts and dollar bulls so I’m not going to go crazy until I see what shapes up Monday and Tuesday.
NEM $45s also make a good momentum play at $1.50 but don’t go against the price of gold – get out/don’t buy when it pulls back on you!
These are virtual portfolio protection plays only. Also, the DIA Jan $121 puts for $1.10 are good protection as they won’t kill you on the turn (as long as you maintain a 25% stop) but will be a reliable double if we drop 100 points.
Retail sales look good, better than expected – despite all the grinchy predictions but
So let’s not panic yet but let’s have some of these trades tee’d up if our bad open gets worse.
Let’s watch our levels for breakdowns and keep an eye on the usual suspects like BA, MSFT, INTC, SHLD, TXN, WMT, GE
