Upon hearing of Obama's "bad bank" bailout AH, I immediately hedged my bearish DUG position with some DXO (2x long crude) @ 2.60.
This does NOT mean I have changed my mind on the oil sector. The fundamentals indicate a prolonged period of oversupply in 2009, which will depress prices much to Wall Street's chagrin (most analysts still expect $70 crude by the EOY). However, XOM and CVX aren't currently trading off fundamentals, rather they are trading parallel with the S&P500 completely ignoring the underlying commodity they depend on.
This discrepancy makes for a monstrous shorting opportunity down the road, but in the near term we have to deal with idiot hedge funds and institutions bidding up shares of XOM because of another bank bailout (the correlation between the two beats me, but this market is irrational). Anyway I hedged my position, but I fully intend to be net short for big oil's reports on Friday.
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