Wheeeeee....

Last week I said I was bullish. Well, the market is almost exactly equal to what it was then. Somehow, that doesn't seem to be the real story. Anyway, I BEGAN taking off some of the volatility trade here. Still keeping most of it on, though. Not much else to say.

I have another trade, not related to commodities, that bears looking at. The price of credit default swaps (CDS) has skyrocketed. This is known as "tail risk." In fact it's gotten so high that I am selling this and shorting the underlying corporate bonds to hedge. Unless the world goes down the crapper, this is a very good trade.

Note that to trade CDS's you need an ISDA. However, you can do essentially the same thing by buying at the money puts and selling a multiple of deep out of the money. For example, the Goldman Sachs Sep. 180/130 put 1 by 4 will cost about 2.90. If they don't look like their going broke in the next few weeks, that should at least double.