[quote=equalizer]For very risky bet on falling oil try the airlines. Small drop in oil will easily double the prices. Cautious investors like Stuart Schweitzer of JPMorgan Private Bank have started buying distressed debt, companies that wont go under like (my guess) GM or WAMU.
stockstrdt: What factors convinced you to go short, technical ones? The VIX is not surging (only in the low 20’s as opposed to midthirties back on black Stearns day) which is typically very bad for bulls. The 50 day EMA and 200EMA last crossed earlier this year and this is also bearish. With the dow and S&P 500 near strong resistance at 20% off peak, we are near crucial junction. We could get slow painful decline aka 2001-2002 or my prediction that 90% odds in pres election years the market will rally from July-Oct. The party in charge is going to sit idly by and watch economy, market just slide down without putting all stops to help their party?
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The low vix is what scares me. The market is almost parabolic in its downtrend yet there is no fear. Downtrends like this don’t end until fear comes in.
I believe the lack of fear in such a strong downtrend is odd and my guess is that when fear comes into play we will see some big down days as soon as the S&P takes out 1250. Circuit breaker type days. Then we will see the vix in the 30’s or 40’s.
