Simple way to win in the second half of 2022
I mentioned last December that keeping it simple is the key to success this year. At that time, we already knew Feds would increase the rate (did not know how big of increase) and we also knew the inflation was here (did not knew how high it would be). So I proposed to short bond and long commodities. That is, long TMV, long ERX or DBC and DBA. This strategy definitely worked well so far. I did not predict that SPX and NDX would be down so much.
Now, after SPX rallied from 3650 to 3900, nothing is changed. Inflation will be high and Feds will reduce its balance sheet and increase the interest rate. Since commodities like oil and natural gas have reached their highs, I would use ERY when oil rallies, and get long SPX when it reached 3500. I would continue stay long TMV whenever bond rallies and long BITI whenever Bitcoin rallies.
Now, after SPX rallied from 3650 to 3900, nothing is changed. Inflation will be high and Feds will reduce its balance sheet and increase the interest rate. Since commodities like oil and natural gas have reached their highs, I would use ERY when oil rallies, and get long SPX when it reached 3500. I would continue stay long TMV whenever bond rallies and long BITI whenever Bitcoin rallies.
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