Morning Thoughts August 14

  • We continue drifting higher in risk assets.
  • While it is simple to short this rally I would point to the chart below indicating how well all sectors are now participating in this upswing.
  • Sooner or later we will correct but I for one do not want to step ahead of a train, especially if retail and institutions decide to buy again near the 1400 area on the SPX.

  • Protection however is cheap, note the VIX closed below the 14 mark yesterday for the first time since 2007

  • We think the 40% rally in TSO so far this month may be a little excessive in the near term…we are short some out of the money calls for a test drive





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