Yesterday, we shorted oil in the Hedgeye Virtual Portfolio. Our case is simple: the US dollar, which has been in a bullish formation since April, is about to rip higher. In turn, oil will go down and has dropped over -1.5% today, confirming our thesis.
It appears that pundits and analysts are worried about the situation in the Middle East. Tensions with Iran and Israel are high, the Strait of Hormuz might close, the civil war in Syria is worsening and suicide bombers are on the loose in Bulgaria. None of that really matters. It’s all about what the dollar does. As our CEO Keith McCullough says: “Get the dollar right and you get a lot of other things right.” We are bullish on the dollar and bearish on global growth, which continues to slow.