Its a beautiful Monday here in the Rockies sitting in my office while watching my wife read from her kindle and my screens watching Europe implode.
This is why we’ve been imploring readers and clients to remain cautious and why we still have our hedges: Euro markets are down from 4-5% today, US futures indicate -203 S&P 500 and Gold up 1.39%.
Greece and Italy are holding Europe hostage in their failure to rein in their budgets while Europe and especially Germany decide whether to support and save the hapless Mediterranean countries. Big vote in Germany on Wednesday that could provide a temporary pause in the great reset or just provide be the catalyst for Europe to implode further.
Just hours ago, UBS cut their view on global equities and raised their outlook on commodities and the VIX. Gee, ya think?
Strategy: This is becoming too easy to game. Sure there are enough nitwits in politics denying reality to remain bearish longer term. However, a climactic selloff on Tuesday could set the stage for another short term bounce. Our S/T indicators will become very stretched on the downside if the SPX gets whacked tomorrow. This could be a nice exit point for at least a fraction of our SDS hedges. I’ll retain our positions in metals and currencies. I have no interest in buying anything for the time being.
If we do liquidate a portion of our SDS position, it will be with the idea of buying back on any market strength later in the week. These thoughts are still fluid and the situation may change whereby we do nothing. Otherwise its a nice position to be in, lessons learned from 2008.
Long SDS, GLD