Switching to Value and Cutting Exposure to the Inflation Trade

Thomas Kelly submits: Wednesday I spent the bulk of the trading day cutting my exposure to the
inflation trade that I’d put on. My baseline reasoning is that oil has
been the key driver behind inflation, but today’s oil inventory report
was very bearish for the market and resulted in some technical damage
as oil dropped below the $87 support level intraday. Although oil
barely managed to climb back above $87, I believe that the technical
damage has been done, and we are likely to see added selling pressure
over the next few weeks and months. Given the substantial amount of
speculative money still in the oil ring, prices could potentially
correct pretty sharply here, and that will surely help to temper
inflation expectations over the next few months. Complete Story »