The Renegade Trade
When every asset class in the market appears to be falling, we bring you trades that go their own way. These are the Renegade trades. Specifically, these are the assets that are not correlated to the S&P 500. Merrill Lynch in a note today said that many traditional instruments that used to go their own way, such as wine and art, are more highly correlated to the stock market so that leaves investors searching.
The most conventional of all the renegade trades is gold, said Dylan. Bolling noted that it is not working during this sell-off. Bolling said forget gold because it is a hedge against inflation and not necessarily a market sell-off.
The only thing that has worked in this market as a renegade trade are bonds. 30 year bonds. iShares Lehman 7-10 Yr Treasury Bond is a bond fund that he likes.
"The Lehman Aggregate Bond Fund is a great hedge", said Tim Strazzini. "DWS GlobalHigh Income Fund is another one I’ve owned for a while," added the trader.
"For the most part the credit quality overseas is not in question. These things are a great way to pick up foreign yield", Strazzini said.
Jon Najarian said the iShares Lehman 20+ Year Treasury Bond ETF is very liquid bond fund that makes it easy to get in and out of when you want to diversify against the market.
On MAR 5, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders.
Strazzini: Gold,(MER), LBF
Bolling: Gold, Silver, Soybeans, Short Corn, S&P Futures, short Nasdaq futures, NMX
Najarian Owns (PALM)
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