(Almost) Last Chance to Get out of Stocks

[ucodegen]

@stocktradr
If you search you’ll find my posts are over six months (maybe nine months) ago warning of the beggining of dramatically increasing inflation that would affect the mortgage rates… Status update: recent inflation figures are higher than seen in 27 years.

The inflation aspect is one reason I would be careful of shorting oil. In the early 1900s, gold was a universal currency because many currencies were based upon it(and it was therefore ‘required’ for the currencies). Now most currencies are fiat and gold does not have much more importance than emotion puts on it. Oil is the closest thing to a global currency since most modern economies require it to run. With high inflation, the price of oil may end up holding constant because of the dollars devaluation through inflation and even though oil consumption drops.

Oil is not yet in a free-fall. It will be interesting to see if it does enter a free-fall. I think its behavior will depend upon the economies of the emerging countries (ie India and China) and whether their economies are able to run self supporting without US over-consumption.

[ucodegen]

@stocktradr
If you search you’ll find my posts are over six months (maybe nine months) ago warning of the beggining of dramatically increasing inflation that would affect the mortgage rates… Status update: recent inflation figures are higher than seen in 27 years.

The inflation aspect is one reason I would be careful of shorting oil. In the early 1900s, gold was a universal currency because many currencies were based upon it(and it was therefore ‘required’ for the currencies). Now most currencies are fiat and gold does not have much more importance than emotion puts on it. Oil is the closest thing to a global currency since most modern economies require it to run. With high inflation, the price of oil may end up holding constant because of the dollars devaluation through inflation and even though oil consumption drops.

Oil is not yet in a free-fall. It will be interesting to see if it does enter a free-fall. I think its behavior will depend upon the economies of the emerging countries (ie India and China) and whether their economies are able to run self supporting without US over-consumption.

[capeman]

[quote=PD]I am not going to buy a ton. I’m also fully versed on the risk. One thing I’ll never do, however, is go short.[/quote]

Careful with the Puts with the VIX all over the place and high IVs people are getting squeezed pretty good in the options market. You get close enough to OpEx and a small move in the wrong direction can wipe you out. Most of the meat has been taken off of the bones of the home builders and many financials anyways.

At this point I would go with direct shorts anyways since you don’t have as much of a time contraint or IV and you can use “Stops” to get yourself out on a wrong way move.

[capeman]

[quote=PD]I am not going to buy a ton. I’m also fully versed on the risk. One thing I’ll never do, however, is go short.[/quote]

Careful with the Puts with the VIX all over the place and high IVs people are getting squeezed pretty good in the options market. You get close enough to OpEx and a small move in the wrong direction can wipe you out. Most of the meat has been taken off of the bones of the home builders and many financials anyways.

At this point I would go with direct shorts anyways since you don’t have as much of a time contraint or IV and you can use “Stops” to get yourself out on a wrong way move.

[capeman]

[quote=PD]I am not going to buy a ton. I’m also fully versed on the risk. One thing I’ll never do, however, is go short.[/quote]

Careful with the Puts with the VIX all over the place and high IVs people are getting squeezed pretty good in the options market. You get close enough to OpEx and a small move in the wrong direction can wipe you out. Most of the meat has been taken off of the bones of the home builders and many financials anyways.

At this point I would go with direct shorts anyways since you don’t have as much of a time contraint or IV and you can use “Stops” to get yourself out on a wrong way move.

[capeman]

[quote=PD]I am not going to buy a ton. I’m also fully versed on the risk. One thing I’ll never do, however, is go short.[/quote]

Careful with the Puts with the VIX all over the place and high IVs people are getting squeezed pretty good in the options market. You get close enough to OpEx and a small move in the wrong direction can wipe you out. Most of the meat has been taken off of the bones of the home builders and many financials anyways.

At this point I would go with direct shorts anyways since you don’t have as much of a time contraint or IV and you can use “Stops” to get yourself out on a wrong way move.

[capeman]

[quote=PD]I am not going to buy a ton. I’m also fully versed on the risk. One thing I’ll never do, however, is go short.[/quote]

Careful with the Puts with the VIX all over the place and high IVs people are getting squeezed pretty good in the options market. You get close enough to OpEx and a small move in the wrong direction can wipe you out. Most of the meat has been taken off of the bones of the home builders and many financials anyways.

At this point I would go with direct shorts anyways since you don’t have as much of a time contraint or IV and you can use “Stops” to get yourself out on a wrong way move.

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