Fascinating and worrying insight;
I’ve got a lingering doubt about the fundamentals that underpin our current rally and I feel that Walter Zimmerman (chief technical analyst at United-ICAP) makes a great point with technical analysis to describe our current mania as a bubble; so the question is–where to next? (Check out 0:54 for my favorite chart)
I think we could see energy uncertainty as a prime cause of the next pullback. The odd comments coming out of Saudi (including a rather unusual amount of transparency) leave me with the feeling that we might be in for a supply shock of some sort which they are trying to preemptively mitigate hand-in-hand with the Americans; the extremely well distributed rumors of a release from the strategic oil reserve has my cynical side thinking that the US and UK administrations were keen to test these waters. Suffice it to say, we’ve sold all of our oil-related holdings (with the notable exception of Pinecrest Energy which we are waiting to hear from tomorrow) in order to ride out energy volatility which I see coming sooner than later (will be looking at oil futures options in more depth over the next few days).
Check this Wall Street Journal article out.