Allow me to express my warm feelings toward last Friday, a time in which the equity markets exploded higher for absolutely no reason at all (note the limit-up on the Russell, tinted in green) and terrified bears like your humble narrator into vastly reducing risk. Thus, instead of 165% exposure, I’m at 95%.
Here we are on pre-market Monday, and a good deal of that baseless gain has vanished.
Of course, one thing that is helping depress things a bit is just about the last honest market on the planet, which is crude oil. This, more than anything else, represents the true economic state of the world. It has fallen all year long (and if this was an utterly organic market with no cartels, it would probably be approaching $0).
Here we see that in last night’s session alone, crude is down 11%. Can you imagine waking up to an equity market where the ES was down 300 points? I would need to clean my screen twice at that point. In any case, here’s just the past few hours of crude:
As for my own positioning, I’l be lazy and toss off thoughts in bullet point form:
- 50 open positions, all individual equities;
- 88 symbols in my Bear Pen;
- A strong conviction that the resentment and backlash related to the trillions of dollars that have been handed out to the rich over the past month will start to bubble over into the general public
Oh, and if you want to see early evidence of that last point, just take a stroll over to the latest innocent tweet from Ruth Chris Steak House. The intent of the tweet was to show off their high-fat, high-sodium, totally-overpriced side dishes, but all the replies are people saying they’ll never eat there again, since the company yanked $20 million out of the “small” business rescue package.
Shake Shake did exactly the same thing, but due to the bad publicity, they’re giving the money back. Brilliant, guys. You basically smeared your reputation permanently in exchange for holding on to some cash for a day or two. But at least you can say you didn’t keep it.
Anyway, let’s make this a good day. I’ll go symbolically strangle last Friday to death now.