As my attorney just got finished telling me, “I know your ex is nuts. You just have to deal with it.”
The same thing applies to the market. It’s nuts, and well off its rocker, but we have to deal with it. Last week, the Dow lost about 500 points after running and selling off, making us all a bit batty.
Today, we are up about 200 on the idea that another oil pullback will increase consumer spending. But here’s the thing. Even as oil pulled back from highs, all consumers did was save money. We can see that in the savings rate.
We have to deal with this reality for quite a while. So we will trade a bit more conservatively until some sort of rational thought returns.
As for our trades, consider exiting half of the Lumber Liquidators put option side of the new hedge. The stock was taken down again by short sellers now alleging insider trading.
Look for new trades shortly.
Good investing,
Ian L. Cooper
Forgotten Profits