Thursday, November 11, 2010

The QE2 Cometh....

How I’m playing the QE2

First, I have learned to never fight the fed. This seems cliché, but it’s the honest to god truth. Bernake gave us a free ‘put’ on the market; it would be asinine to over think the situation. In the short term I think we head higher, in the long run my outlook is not so positive.

My trades for the last week have been fairly simple. I’m shorting the TLT via puts. Long term treasuries are going to be hammered. I’m long commodities via calls: CVX, NG, GLD. Dollar goes down, these go up. I’m long leaps on C, these were too cheap to pass up. I started a small position in PCL, another commodity play with a decent dividend. Short bonds, long commodities.

I also took a flyer on BIDU today at the close. POMO Is going to hit the market everyday for the next month. I think high beta names are going to pop.

The dollar is going to lose value fast. Make sure you put it too work in something that will sustain value.