I am not fighting crude
Coming up soon: Fighting the Cult of Negativity part 2: the world is always ending. But first, my thoughts on this dip.
-this is potentially a long term good turn of events for the world. Lets get these maniacs out of there, lets get the people a better quality of life, and that in turn should help us all. But for now this is potentially serious as make NO MISTAKE, a huge spike in oil prices has rally-killer written all over it, in magic market, right over the "double dip" tatoos. A gigantic spike in oil prices quite literally possesses the ability to cause a double dip, even where things were looking good.
I am not aggressively buying this dip here, rather yesterday I sold out of AHT, WINN, GLBI and a few smaller positions and I have not cashed out the puts I bought last Friday, PLUS I bought enough VXZ yesterday to make it one of my largest positions and raised that by 50% today. Beyond that I have not cashed out my hedges on individual names like TCK, LVS, MGM, CAT, DE, CBI, etc etc etc etc etc My reason for this is fairly simple: this market needs a good flush, it was grossly overbought, complacency was high, and however severe the middle east situation proves to be, for now its the excuse to correct and thats what we may just finally do. I also put some more money to work in my hedge fund pilots, one of which (expectedly) got on-paper butchtered, the other is up 1.5% for the week (and I DON'T expect it to get slaughtered when the market tanks, but I also expect it to yield lower returns over long periods of time and occasionally underperform an up market). I am well prepared to dump VXZ on a moments notice.
You must do what you must do, and maybe we are having an extremely buyable dip, but EVEN IF an oil shock doesn't slow down the recovery at all, its perception that matters and the perception that it MIGHT could bring about some institutional selling. With the money shifted into the hedge pilots, I expect to outperform the market if we get an uptrend despite me not buying the dip.
I have blabbed away all year about selling stuff, raising cash, and all of that. Getting ready to buy the dip when it comes. This is not the dip I have been waiting for. As always, I consider myself a very poor market timer.
What would I buy if I was to buy today? No idea, I'd probably buy puts on levered bear ETFs, long dated
Good luck to the dip buyers, bad luck to the short sellers.