Winner, Winner Chicken Dinner

As I write the S&P futures are up by over 50 points. I don't believe that the S&P 500 will make much headway this Summer and that this is a chance to lighten up. I was short the morning of the crash and switched to a net long posture for a trade a couple of hours before the crash. It looks like I am being bailed out of my bad trade and I will be making sales at the open.

It is beginning to look like the goldbugs are right. All roads are leading to the printing of money and debasement of fiat currencies.

3 comments:

Onlooker said...

Holy crap! This is going to be some kind of historic gap up, eh?

UFB

Sure glad I'm not short, at all. Shorts are getting absolutely killed this morning.

I knew we could get a pretty sharp bounce off of that oversold condition, but this is ridiculous. We'll see if the cash market holds it up. Crazy times.

PJ said...

Disagree on the printing part, at least for a while. They can't afford inflation and higher rates, that would blow everything up. The 1970s were hardly a paradise for risk assets, economies, or insolvent debtors.

They're trying to leverage up but are just about out of the ability to borrow. That's when the real trouble starts, since then there will be no good options.

Distrust in governments could extend to their currencies and drive gold up, but also deflation could drive gold down. Gold is already within a factor of 2 of its all-time inflation-adjusted high, and that occurred with 20% inflation. I think shorting equities is the safer bet.

PJ said...

Onlooker - I'm short but happy. I went "all in" short a week and a half ago, then lightened up Friday morning and again Friday at the close, so I'm now 65% short (all in for me is 200% short).

The whole gap up today is going to be retraced within a month, and I expect to be more than 65% short for that, so I'm happy.