April 23, 2012
Liquidated (temporarily) our Short Unleaded Gas
Unleaded has come off about 30 cents (9 %) from its highs. For purely instinctive reasons, we liquidated our short positions this morning. I still think the BIG short is coming, but also believe there could be some sort of rally back towards the highs...If it does rally, I will be looking to reinstate our short positions with the very firm idea we will see this market in the $2.50 area before summer's end.
SELL TREASURY BONDS
SELL TREASURY BONDS
SELL THEM NOW
Wish we had done the same (liquidated and waited for a rally) in Treasury Bonds, but I didn’t…But I do believe the Bond market, which sold off 8 points ($8000 per futures contract), then rallied back up 8 points, is now setting up for the truly BIG, “unending” 15 to 20 point sell off. I am voraciously (yes) bearish the Bond market…and immediately so. I might be dead, dead wrong but I now look at September Treasury Bond puts as Golden. With this trade, my perspective has been, and still is, whoever can hang on to the short side of this market---meaning, keep funding the trade---has the chance to make an ENORMOUS hit in the markets. Again, I might be dead wrong which would mean perhaps LOSING a lot of money, but that is the way I see it. I BELIEVE SHORT BONDS IS A MONSTER TRADE…FROM HERE…NOW.
Here is one option that I love…It’s not cheap but I think it could be a killer…
Truth is, when I look at the long term chart, I start thinking it even makes a lot of sense to go 5 or 6 points out of the money, in September, and own something like even the 135 Sept Puts for about a point, or $1000 each.
I LOVE THIS TRADE. IT’S THE BOND MARKET. IT MOVES. AND IT DOESN’T MEAN I WILL BE RIGHT, BUT MANY OF YOU KNOW THIS IS THE MARKET I HAVE MADE MORE GREAT TRADES IN THAN ANY OTHER…I AM TELLING YOU GUYS….STEP UP ON THIS ONE…LOOK AT THE LONG TERM CHART AGAIN…YOU REALLY THINK IT’S GOING TO STAY HERE?…AND PLEASE (!), DO NOT TELL ME, “I THINK YOU’LL BE RIGHT. ONLY IT WILL BE SIX MONTHS FROM NOW.” I HAVE HEARD AND SEEN THAT IN FAR TOO MANY PLACES…IT’S TIME TO BE SHORT NOW. THE FED IS DONE (WHETHER THEY ANNOUNCE IT OR NOT. THE ECONOMY IS MOVING…AND 30 YEAR BONDS, PAYING 3% INTEREST, ARE NOT AN INVESTMENT. I THINK THEY HAVE NO WHERE TO GO BUT DOWN…AND THEY WILL DO IT IN A BIG WAY.
Give me a call. Pick up the phone.