WTI (contrasted to other grades, e.g. Brent) still may have some way to fall before X event changes its course. Today, however, Israel made veiled threats against the two Iranian ships in the Red Sea heading for Syria. The Strait of Hormuz (which Iran has vowed to close if attacked), unlike the Suez canal, has a significant amount of oil that passes through it each day. There is only one likely event that could completely wipe out a short oil position, and its Israeli-Iranian conflict. The magnitude of the severity, even if the probability is low (which I think it is in the immediate term) makes a short oil position a risk not worth taking. Why not go long another grade of oil, then? Well, if I were a hedge fund, I might consider it, but given my limited access to leverage, I can only play with the toys I have (i.e., I can only go long/short WTI). Sold SCO at 11.70. Total gain, including leverage = 19%. But since I miscalculated the loss on a previous trade, I'm going to call it 16% for the Jano Index.
I also opened a short emerging market position. In addition to commodities, they are extremely vulnerable to monetary policy tightening (or hints of), Chinese economic slowdown, PIIGS...well, you know what, pretty much anything at this point. In a flight to safety or developed market tightening, the money leaves emerging markets quickly. I may have entered early (imagine that), so I may pull the plug quickly. Long EDZ @ 22.53.
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