The US market went up. Because… reasons?
The commodities market is still pricing in that oil will flow very soon. Best estimates from people in-the-know think Iran has ~6000 drones left. But, lets say that is an order of magnitude too high. If Iran sends ten drones a day into Dubai, UAE, Saudi Arabia and at ships, insurance premiums will stay preventively high for the next 18 months.
I can’t say I understand the degree of backwardation in the oil market other than excess usage of Ketamine.
I get that two ships is infinitely better than no ships but it’s still considerably less than average and those two ships are going to Pakistan.
The Saudi work around of piping oil to the other coast is a stop gap at best. At best 4M barrels of oil can move across the desert a day. Compared to 25M barrels normally float through the Strait of Hormuz.
I still have securities related to oil production in North America but no derivatives anymore. I don’t think I am wrong. But, the market does so no reason to continue.
The Fed meets this week with new PPI data in hand. The risk of resurgent inflation surely hasn’t gone done since helium, aluminum industrial and cooking oil, steel and plastics are reliant on oil that floats the Strait of Hormuz.
Right? It’s not doomerism to be presented with Mike Tyson wearing boxing gloves and thinking “I don’t want to get in the ring right now.”
I want Powell to just roll out a 50’’ TV screen during the FOMC press conference and point to an animate map of shipping traffic in the Middle East and shrug. Then walk off muttering to himself.
Another arbitrage play on the FOMC is likely setting up again.
Staying hedged for now at least through the week. Accounts are up between 24 and 35% so far this year which is ahead of target so no reason not to.
I occasionally gamble small and only in defined circumstances, for example after exiting I will sometimes buy a small call option position incase there is a squeeze, but I rarely take unnecessary risks.
Last week was one of those occasions. I rode our entire CytomX Therapeutics position there the data release. And I did not sleep well last night. Then this morning the storm ominously knocked out my power so I couldn’t access any of the accounts even if I wanted to. It felt ominous and foreboding and I thought I had made a mistake. After 25+ years, I still occasionally lose sleep. Unless you lack a nervous system that never goes away apparently.
I will start to let stocks ride a bit more now that I have discretion to do so. So going to shoot for higher returning plays.
As always, if you think there are spelling errors update your dictionary to the latest version. Happy speculation!
— AJ
Event Horizon Tools
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