WASHINGTON, March 13, 2014 – While the stock market heads toward a short-term oversold condition this week—which usually bodes well for a bullish snapback reaction northward—the accumulation of existential uncertainties as we approach this weekend’s ominous Ides of March may result in an exception that disproves the rule.
True to his U.S.S.R., KGB and Communist roots, Russia’s Thug-in-Chief Vladimir Putin is in full battle gear ready to formalize his takeover of Crimea this weekend and the carving out of at least half the Ukraine shortly thereafter. Meanwhile, the once-mighty King Obama-led U.S. and a financially hobbled Eurozone are blustering away whilst quietly executing deft maneuvers from the Neville Chamberlain playbook.
Conservatives regard the rigidly post-Colonialist Obama today as America’s own Thug-in-Chief. But factually speaking, our guy would rather play a few rounds of golf than oppose the real thing in Moscow. A genuine thug like Putin has to be laughing himself to sleep every night with visions of a resurgent Communist Empire dancing in his head like so many sugarplums. It’s a disgrace, but…the Koch brothers…
Add to this world-sized mess various other nasty factors including a budding Lehmann Brothers scenario in Chinese finance, the vexing question of that missing Malaysian jetliner, the still-building international LIBOR and Forex system-gaming scandal, the implosion of the always-asinine Bitcoin Ponzi scheme and the rolling disaster of Obamacare—including a president who now makes or breaks laws with impunity according to political whim—and you very much have a market that wants to make a base-jump without a ‘chute.
We’re pretty fully invested right now in spite of this mess, hoping a quick snapback rally will get us out of quite a few positions profitably. But our portfolio may have overstayed its welcome, pending outcomes and reactions to the foregone conclusion of the rigged Crimean “plebiscite,” which will likely be conducted like the union card-check balloting the S.E.I.U. and its left-leaning labor buddies would love to have.
Stay tuned. No one can really predict the outcome here, though a likely result is a decisive Putin win that will be characterized in America’s lapdog media as some kind of Obama victory. Float like a butterfly, sting like a drone. Where’s Jonathan Swift when we need him?
We are still laying low, occasionally nipping off the Swiss gold bullion ETF (SGOL) in five-share increments at opportune moments, mainly because
- It’s backed by real gold bullion as opposed to paper promises; and
- In our Schwab brokerage account, shares are commission-free, allowing us to accumulate small, odd-lot purchases without a huge commission penalty.
We’re nibbling on a bit of silver, too, via a similar silver bullion ETF (SIVR) for roughly the same reasons, although we’re a bit more cautious here as silver has been obnoxiously volatile.
We still toy a bit with the palladium-flavor bullion ETF (PALL), but are currently out as its volatility and light volume make it even dicier than silver.
We are also ready to hit the silk with short ETFs like SH (short S&P 500), SDS (double-short S&P 500) and HDGE, an elaborately concocted ETF that can be used as a bearish hedge.
Market is currently down over 100 Dow points at high noon today, making the short positions inopportune to execute just now. (The more meaningful S&P 500 is down a fairly substantial 9, ditto there.) But, as the motto of Loudoun County, Virginia proudly proclaims, “I Byde My Time.” A quick bull move—one we actually expected today—will give us an opportunity to put on those shorts.
What we’re really worried about is Monday morning’s trading scenario, the first that traders will encounter after this weekend’s Ides of March (actually Sunday, March 16) marks the beginning of the end for a hapless Ukraine.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. He currently holds positions in SGOL and SIVR.
Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.