Trade The Slowdown

A few points I’d like to make:

Airfares go up, airlines blame speculators for higher “Jet Fuel A” costs. Prices drop, and airfares stay the same. Plus we have the f*cking bag fees.

Airlines should be publicly thanking speculators for knocking down prices.

Airlines should be getting hammered in the press for price gouging.

Investors pulled money from commodities? Must have been unsophisticated retail investors. How do I know? If there was anew outflow like this article alleges, the investments were likely in long-only commodity index products.

Sophisticated commodity investors and traders know to trade in up and down markets. Commodity markets are cyclical in natures, not secular like stocks. That means you can go long as well as short and you’re just as willing to.

Two, most long-only indices are very heavily weighted in the energy markets in commodities such as hearing oil, RBOB gasoline, and especially crude oil.

The GS commodity index has a 52% allocation to light sweet crude and Brent crude. When you add in the Heat and RBOB, you’re looking at an almost 72% allocation to the crude complex.

When those commodities go down like they have, weak hands puke out of their long index positions and look for less volatile securities like….GOOG or AAPL!

Prices of Raw Goods Plunge on Slowdown


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