Trading Thoughts.

I think there’s still some upside in the coal stocks I mentioned a few days ago.  However, with ANR and PCX up 9% and 10% (respectively) yesterday, I’d be a little hesitant buying prior to Friday.  These are obviously volatile stocks and not for the faint of heart.

On the topic of this coming Friday (8-26-11), I wonder if the much-anticipated Jackson Hole speech by Helicopter Ben ends up being a sell the news event.  He used this speech last year to lay the groundwork for QE2, which resulted in a ramp in stock prices over the months that followed.  Maybe the same will happen after Friday’s speech, but the QE series (umm, I think we’re on 3, yeah…QE3) seems to have a tired feel to it.  Depending upon the volume and range of stupidity coming out of this speech, I’d almost be inclined to sell into any spike in the market that results.

Adding credence to the sell the news thought, would be further significant gains Wednesday and Thursday as “sell the news” is typically preceded by “buy the rumor”.  The rumor in this case being that QE3 is coming to save us on Friday.

The fed’s whole negative real rates strategy is really adding risk to all investments.  Given the backdrop of a bunch of printing press loving central bankers, I think commodities deserve a place in most portfolios as an inflation hedge.  The problem is that the commodity party is getting a little crowded as well….little too popular.  There’s definitely very little comfort in the old buy and hold mantra.  I don’t see this mindless strategy paying off over the next 5-10 years.

TD

*These are simply random thoughts and not investment recommendations.  As always, think for yourself and do your homework prior to making any moves with your own portfolio.