Long on audacity but short on hope: Inflation maybe, deflation baby!
So you sign a bill committing to spend trillions of dollars to try to save the economy and this is all the excitement you can get? If this is a stimulation bill, then why are gold and silver the only things that were stimulated? Oh yes, it's not a stimulus plan. I forgot, silly me. It's an economic recovery plan. What is the difference between a stimulus plan and an economic recovery plan? Well an economic recovery plan, I guess, is more expensive and does not really stimulate the economy. It is a bill that has a lot of audacity but is short on the hope. Even as I was standing down on the floor of the historic Chicago Mercantile Exchange - CME for short - the lack of enthusiasm for the bill was quite apparent.
As the bill was signed, there was no reaction from pits. There had been hours of negative trading and trying to deal with all the incoming paper fears. Maybe the Dow getting near 10-year lows was a hint. Commodities were crushed as deflation mania swept across commodity markets near and far. Grains were crushed, the meats were slaughtered, and copper went into a meltdown. The CRB commodity index plunged to the lowest level since 2002 and went though the worst stretch since last December. And oil collapsed under the weight of record supplies and a dismal prospect for demand in the future. We had reports of big drops in Chinese diesel imports. The ISM manufacturing number was bad and oh yeah, General Motors might need about another 430 billion dollars to stay in business. That is less than Chrysler. They only need about $5 billion dollars more.
Things are a mess. Now the March option expiration is behind us today we may try to get off the matt. The markets have been beaten badly and are a bit oversold so they may try to rally. A nice recovery should open up good opportunities to get repositioned.
We have been short crude for four straight rollovers.
Our short March crude oil from approximately 4354 was bought back at approximately 3493! And rolled to April on the fifth rollover! Wow! We're short April crude oil from approximately 3854 - in stop at 3960.
We're short March heating oil from approximately 14000 - lower stop to 14400.
Sell March RBOB at 13300 - stop 13900.
Sell March natural gas at 500 - stop 540.
