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Winter is Here!

That didn’t take long. I actually feel a bit relieved because I didn’t get pulled into this bullshit fake optimism. I sold Cenovus (CVE) this morning for a 17% gain, raising my cash position to 50%. This was actually meant to be a long-term trade since the stock had taken a beating during the recent oil selloff, but it recovered too quickly, forcing me to book gains. I’m still holding on to Tencent (TCEHY) alongside my short S&P 500 position, but I have no desire to take additional risks. When information comes at you in bits and pieces it’s better to wait until you have all the facts, though it is safe to say the momentum is downward.

The China trade war is not the only concern. We’re now dealing with a yield curve inversion. What does this mean? It means short-term rates are about to exceed long-term rates. Once the spread between the 2-year Treasury note yield and the 10-year Treasury note yield is negative, the likelihood of a recession is high. We’re not there yet, but the signs of an economic slowdown are here. This is what tech stocks were trying to tell us. To complicate matters for the bulls, Apple is offering deep discounts to boost holiday sales. Psychologically this can’t be good for the market. Expect more selling.

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