R59- The small cap oils
especially getting hit- why ? Worldwide oil demand going forward is assumed to be weak ! Oil company inventories are high from what I'm hearing on TV, and I believe demand is nowhere near the supply right now. Also China is huge in this whole story, and China had one good qtr of PMI built 100% on QE. Now even more QE can't keep China's numbers up, as they had bad PMI the next month, and other negative data recently. This trade war also will affect oil negatively IMO. So the problem is, we don't know what the price of oil will go down to, assuming a continued global slowdown. We really can't rely on analyst estimates either for these reasons. I would stay away from oil, despite the apparent low valuations.
Re, I still like shorting the market right now, as a fall of just 4% in the major indexes is nothing with all the headwinds out there. Note the semi's got crushed, just as I had predicted back when the SOXS was in the mid $4s a few weeks ago- now $7.40. I got out($6.56) the minute I saw trump give a break to Huawei with the lift on the ban for 3 months days after placing the ban. Unfortunately didn't get back in on the QCOM anti trust lawsuit loss. I just figure trump will come out with one tweet, and get the semi's to fly again. Plus I really was uneasy with the huge volatility in SOXS. I must say Re, I feel fortunate to have been in the SOXS at the right time, as I made back the entire 41% I was down from early Jan to April 30 ! In addition I am now up 6% for the year, and a new all time high !
Anyway, getting back to shorting. I think the semi's(SOXS) is still ok, but now that the SOX and S&P are both up about the same 21% since Dec 25 lows, after the SOX was up 48% a few weeks ago, that the SPXS is a better risk/reward. I mean you might make more in the SOXS, but it's riskier at this point to any positive headline news on China, Huawei, etc. I also like shorting the Dow or Nasdaq as well. If fact, I really believe you can throw a dart right now, short the stock, and make money over the next couple months.
AI
