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Random Thoughts: Lower Crude is Equity Negative


Despite popular opinion, dipping oil prices may not be so great.

  • Be careful for what you wish! Last night while talking tape on TV, we spoke about the likelihood of lower crude prices. I continued to be the lone voice that viewed that as equity negative through the lens of asset class deflation vs. dollar devaluation.

  • As discussed yesterday, my sense is that the drillers and miners have double jeopardy. Which would, of course, explain why I have such massive short side positions. Sigh.

  • Breadth is working 9:5 (what a way to make a living) but volume is light. It feels as if the bulls are using a lot of energy as they scrape back towards S&P 1405 but we must remember that in a reactive (uncertain) market, the buyers are higher and the sellers live lower.

  • Meanwhile, over in Matador City, the financials have quietly found some sponsorship. Given my hit it to quick it mindset, I've unwound my (marginal) exposure in that complex as a function of risk definition.

  • Good traders know how to make money but great traders know how to take a loss. I'm far from a great trader but I think of that every time I unwind red ink and I find it pretty helpful.

  • In hindsight, I should have added back some Gannett Inc. (GCI) yesterday (as I 'trade around' a core long). I'm not complaining (looking up) as I've learned that bumming when you're green is the quickest way to lose steam. I do, so you know, expect a four-handle (although I'll likely pare on the way there).

  • I've suggested a few tunes for Newbie Staffers Jill and Freddy to sing at the staff meeting. Thus far, Ebony and Ivory, The Weather Girls and The Crying Game but none of them seemed to resonate. In fact, I think I may have scared them!

  • Did you know that Stevie Wonder's birth name was Steveland Hardaway Judkins? I sure didn't but I couldn't shake the thought of him this morning and stumbled across that tidbit.


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