When Crowded Trades Unravel

“No one goes there anymore-it’s too crowded”
–Yogi Berra

Pretty soon we will all be paying less at the pump and if you’re short commodities you made crazy loot today, but the market overall looks horrible. For months we have heard how when oil cracks the market will fly but it can’t seem to get on the same page with the low inflation theme here. I think worries persist that we are that in a global recession that is going to get worse and that is the “real” reason commodities are dropping. It can’t be “just” demand destruction and lack of “speculators.”

The crowded commodity sector is unraveling before our eyes and should continue lower in my opinion. Positions that took months if not years to put on don’t get remedied in one day, although the correction has been in full swing for a couple of months now. Today was just one of those “get me the hell out and hit the bid at all cost” days. I was short X,CF,POT,BTU,and OIH. I traded around some other positions but those five names were very cooperative and did the trick. I took CF and X home. I hate being a slob but they went out pretty weak, if I don’t get a gap down I’ll cover pronto. If you just wanted to sit back and watch the carnage without being hyper-active, SMN was a great way to play the basic materials short.

How did everybody do today? Let me know, because you should be killing them on the short side. If I can help in any way shoot me a comment or e-mail. I look at these types of days as “must make money” days.” They don’t come around that often, but if you are positioned correctly, the register rings all day.

There are plenty of “broken” charts to look at and I will be back shortly. What’s with tech man???? Not a good sign.

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