Many years ago, the great George Carlin spoke of a tendency in this country, no matter what the circumstance, to assume that in the end everything would work out. We’re trained to believe it via our television shows, our musicals, and our movies: in this three-act play we call life, everything is going to be all right in the end. He referred to it as the American Okey-Doke.
This is precisely why, in the fact of news this weekend which should have the markets crashing by many thousands of points, we have equity futures that have flipped by about half a single percentage point.
At the same time, facing information which assures that the world economy is heading for the dumpster, the VIX has gently tiptoed a point or two higher. This is seriously demented behavior.
Not that I’m complaining too loudly. As late as Saturday evening, it seemed that the doe-eyed optimism that has swept the market over the past couple of weeks would flow seamlessly into a third week, and yet the failed peace talks and the blockade-of-a-blockade in the Strait has, let’s be grateful, turned everything in equity-land red.
I guess my main gripe is that the explosive rally from last week should be completely gone and not just diminished.
Even as I’m typing these words, assets are fighting back. Equity futures have regained over HALF their drop since Sunday’s little plunge, even with crude oil prices zooming back into the triple digits.
One especially interesting asset class right now is precious metals. I did a premium post on Friday called Contra Gold which, as the title suggests, asserted that gold was a good bearish trade. I thus went long DUST and bought July puts against GLD.
Lastly, Bitcoin is finally behaving itself. I’ve done numerous premium posts about BTC, and I am short this by way of being long a substantial quantity of October IBIT puts. Yes, October. I’m in this for a longer-term, large move.
I’ll sign off now, a little more than half an hour before the opening bell as I watch the markets continue to get okey-doke’d toward unchanged. There’s never a dull moment in this market. Good luck.
