Well, my friends, here we are again. Instead of letting the organic, God-given natural forces of markets work themselves out, we have to wait like unruly children outside the Vice Principal’s office, waiting for him to do whatever it is he’s going to do with us. The entire financial system holds its breath while a tiny group of government academics that constitute an authoritarian financial politburo called the Federal Reserve deigns to give us their command-and-control edict for our once-great economy.
As such, the aforementioned children are squirming in their chairs and picking their noses with absolutely nothing to do but wait. As I’m typing this pre-market, all of the equity futures are up slightly, but in truth they’ve gone absolutely nowhere this week. Yesterday’s marvelous tumble was met with ferocious buying, yielding the entire day an utter waste of time.
What’s been going on all year, of course, is that the bulls will try to hammer out some kind of meaningful base for a “launch”, and just at the moment it looks like they’re going to rocket this thing to the moon (to use their puerile lingo), the rocket blows up on the launch pad. It’s delightful when it does, but God in heaven, it’s boring to wait all those weeks for the range to play out before succumbing to intelligence.
All the same, in fits and starts, we have been moving this lower this year (obviously!). There is an absolutely chorus of voices, including ostensibly permabearish ones, declaring that we’re in for a hearty rally, and, sure, they may be right. I myself, the most intractable of bears, recognizes we could be in store for an utterly annoying and, ultimately, unnecessary journey to around 4300 or so before all holy hell breaks loose. It’s dull, dull, dull, and frankly I wish they’d just get on with it. Anyone with an IQ north of room temperature knows that equities are going to be shockingly lower in a year, so why not just get this party started? But, no. We have to sit in those chairs, watching that door.
On a longer-term note, I will point out that at long last, the real estate fund IYR, whose analog I pointed out countless times, finally behaved self and spent the past couple of weeks in a good, hard tumble. I had given up on this trade weeks ago, but I re-entered it last week to good effect. They are September puts, so I’ve got oodles of time left, but I’m toying with taking profits for now.
In summary, my own portfolio:
- 34 bearish positions in one portfolio and 8% cash;
- 3 bearish ETF positions in my personal portfolio and mountains of cash;
- The big portfolio is strictly individual equities with very long-dated options, so in spite of what might be rough seas ahead, I’m going to try to diamond hands the whole thing;
- As for the ETF positions, I’m on the fence, but paper hands may rule the day.
I hope you’re hanging in there, and I have every confidence that once this latest nonsense is behind us, we’re going to dominate once more. Practice patience.
