On February 19 I wrote that that the proposed oil production freeze (based on January output) between OPEC and Russia is just a smoke and mirrors game. And true enough the Crown Prince of Saudi Arabia said that there would would be no freeze unless Iran also will freeze its production. Iran of course replied "NO" and what ensued is crude oil falling back into the mid US$30s.
Incidentally, Russia's production just reached its highest ever in March (there's no deal yet, so might as well produce to the max).
A production freeze is meaningless when production is at its highest record. So I think oil will continue to trend downwards.
The Q1 2016 earnings expectation has been revised downwards to -9.5%. yes you read that right -9.5%. This is the fourth quarter that earnings growth expectation is in negative territory. But the disconnect continues on as the S&P 500 trades at 24x earnings.
Weakness is showing in the S&P 500 and the rally is likely to falter.
What would I do? These are some examples of my trades:
I am short the SPY (the ETF that tracks the S&P 500)
I am long RWM (the ETF that tracks inversely to the Russell 2000)
I am long DOG (the ETF that tracks inversely to the Dow)
I am long GDX (the ETF that tracks the gold miners)
There are other ETFs that one can consider:
SH (the ETF that tracks inversely to the S&P 500)
SEF (the ETF that tracks inversely to the financials)
DDG (the ETF that track inversely to the oil and gas sector)
The above are my own opinion only. You are encouraged to do your own research as our risk appetite differs. There is no guarantee that any investment/trade can yield a profit so exercise your own due diligence.
Incidentally, Russia's production just reached its highest ever in March (there's no deal yet, so might as well produce to the max).
A production freeze is meaningless when production is at its highest record. So I think oil will continue to trend downwards.
The Q1 2016 earnings expectation has been revised downwards to -9.5%. yes you read that right -9.5%. This is the fourth quarter that earnings growth expectation is in negative territory. But the disconnect continues on as the S&P 500 trades at 24x earnings.
Weakness is showing in the S&P 500 and the rally is likely to falter.
What would I do? These are some examples of my trades:
I am short the SPY (the ETF that tracks the S&P 500)
I am long RWM (the ETF that tracks inversely to the Russell 2000)
I am long DOG (the ETF that tracks inversely to the Dow)
I am long GDX (the ETF that tracks the gold miners)
There are other ETFs that one can consider:
SH (the ETF that tracks inversely to the S&P 500)
SEF (the ETF that tracks inversely to the financials)
DDG (the ETF that track inversely to the oil and gas sector)
The above are my own opinion only. You are encouraged to do your own research as our risk appetite differs. There is no guarantee that any investment/trade can yield a profit so exercise your own due diligence.
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