Pabst's Blue Ribbon Trades

Bro, my commitment to being short here is so tenuous that I was buying ES tonight in lieu of dinner. Cheap dollar, low p/e's, low rates, strong commodities and a huge short interest? Stocks could squeeze to infinity if the Great Depression ll doesn't hit. As a short I'm already put off by the near capacity crowds around the NBA and NHL each night. There's still money on the street. Just the same I think we go lower.

How low? 30% off the Oct highs? Why not? It's not like you need to perma revalue there. Quick spikes into ridiculous prices happen all the time, eh?

Quote from Cutten:

Pabst - given your bearish view, at what price level would you become a long-term buyer of the S&P?

Also, if you have no stocks at all, what assets do you recommend as superior for long-term investors? Bonds are yielding very little, as is cash, they are barely beating tax + inflation. Commodities look good but would you really advocate a 100% commodity portfolio? Stock earnings yields are higher than bond yields by the biggest margin since 1974, so one can hardly argue that the S&P is expensive.
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Quote from Pa(b)st Prime:

Bro, my commitment to being short here is so tenuous that I was buying ES tonight in lieu of dinner. Cheap dollar, low p/e's, low rates, strong commodities and a huge short interest? Stocks could squeeze to infinity if the Great Depression ll doesn't hit. As a short I'm already put off by the near capacity crowds around the NBA and NHL each night. There's still money on the street. Just the same I think we go lower.

How low? 30% off the Oct highs? Why not? It's not like you need to perma revalue there. Quick spikes into ridiculous prices happen all the time, eh?
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not sure about the NBA but i can assure you that the NHL has brutal attendance.....don`t believe a word that Bettman states about attendance because it`s a bunch of fodder.
 
Quote from Chuck Krug:

hi pabst,
what's your take on commodities in general?
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I'm macro bullish but IMO commodity markets are on/near IT swing highs.

BTW: Paid 24.00 for a Comex GC 900 put. (Mch)
 
Despite us being at the August lows, the VIX is at 23. Now I know it is a bit distorted because of the Monday holiday, but still, the striking thing about this selloff is how little fear there is. No one is really sh*tting themselves.

To me that seems bearish, potentially very bearish. I am trying to think what it would take to get the VIX to spike over 30 and get some real fear & panic selling. Right now, new lows ain't doing it, not even close. The only conclusion is that it would take a BIG move down to get the fear up that high. Say 1300 or even lower.

The only other alternative is that the market bottoms without going through the panic selling phase. That would make it a pretty unusual market bottom. IMO loading up on some out-the-money puts is a good move.
 
Quote from Cutten:

IMO loading up on some out-the-money puts is a good move.
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i'll be the first to admit i know very little about options, but i'm guessing there are volatility premiums in the options that are not accounted for by the strange vix behavior.

loading up on premium during a panic whether or not it is accounted for by the vix doesn't seem like the best idea to me. at the very least wait for a bounce and buy them on underlying strength. good trading to you.
 
Pabst, what do think about shorting the beans here? I've started to buy a few puts but am reticent to take an substantial position before the Fed acts in case thee $ takes another hit and puts a floor under commodity prices. Looks like it might be priced in already in gold.
 
Covered the Gold at 885. I'd love to stay short but maybe later today/tomorrow/next week. Ah life is both too long and too short.

I'm also out of all index opts/futs except for a couple 1440-1400 put spreads.

I'll try to tread water or not trade today. I felt my new found wealth (lol) yesterday allowed me to overtrade in ES. Fortunately I was just a small loser on the day but my trading was reckless. Readers of this journal are well aware that unacceptably large losses often follow big winners. Our psyche just loves to give back what our guilt considers ill got gains.....
 
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