Trading Opportunity

Here's what I will be working on over the weekend.




The employment report comes out next Friday, August 1. Mish says that the BLS adjusts for errors in their birth/death model biennially, in Jan. and July. The August 1 report is for July. This data from BLS seems to confirm huge negative subtractions in employment last Jan. and July. That's the setup.



The result is a chance for a huge drop in employment. This is huge deflationary news.




Put this together with the Baltic Dry Index dropping below 200-day moving average while hitting a 3-month low during a seasonally strong time of year.

Chart comes from CapitalLinkShipping.

So, how do I play this? Short CUB (crack-up-boom) plays. Some ideas... Mosaic, Potash, Cleveland-Cliffs, copper miners, coal miners, dry bulk shippers, etc. I will try to make a list of CUB playas with large p/e ratios. Maybe I'll ask Russ what he thinks.