Did you ever play hot potato as a kid?
For those who didn’t, you pass a hot potato around as fast as you can until someone yells “hot potato”. You lose if you get stuck with the hot potato.
That’s what the steel sector is like right now. As the market gets hotter and hotter, the long trade is the hot potato and soon someone will get stuck with a big loss.
In today’s Weekly Big Picture Reflections (recored live on my hike at Torrey Beach), we talk about extended sectors like steel and shift our perspective as we approach the trade.
This approach already started late last week when I entered the $X short trade (see bullsonwallstreet.com)
— Paul J. Singh (@PaulJSingh) December 10, 2016