About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, July 19, 2012

Clean Out Day For Commodities & Oil

I completed selling out my position in the commodities basket today as the ETF reached hefty
short term overbought levels. DBC Chart For more, see yesteray's post below.

As posted on June 2, I put oil on my buy list because it was deeply oversold in the short run.
I did go long shortly after, and this time out, I gave the USO oil price tracker a shot when West
Texas crude crossed back above $80 bl. I sold out this position today primarily because the
recent run up was just too zippy relative to fundamentals for my comfort .USO Chart
I am now about 90% cash. I do have a natural gas long position which I have been nuturing,
but this a long term postion I started last year, figuring if the guys at Exxon Mobil were willing
to put large $ to work exploring for and producing gas, maybe I should, too. Whatever your
feelings about this monster company, note that few careful observers have ever thought of
them as dumb.

Since I view the economic outlook for the US as very uncertain, my attitude toward trading
has been to look at deep oversolds and very hefty overboughts as candidates for long or
short positions. I will happily return to the oil and broad commodities market when good
shorter term opportunities arise. I have been very tempted to short the hell out of the long
Treasury market, but the stars have not lined up quite right yet. I have skipped the equities
market because volume and price momentum have not been convincing, although breadth
has been strong.

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