Housing 'Repeat Of 2008': Trader Warns Banks Will Need Bailouts | Todd Horwitz

Summary

Todd Horwitz, chief strategist at BubbaTrading.com, discusses his bearish outlook for equities and oil while positioning long gold and grains. He warns of a potential housing crisis and expects the Federal Reserve to raise rates, and he details several tactical trades including a long gold/short Dow paired trade and selling the dollar.

• Horwitz is short the S&P 500, calling the market overvalued and delusional with a technical top in place.
• He remains short WTI crude oil, targeting a decline to the mid-$50s due to oversupply and weak demand.
• He is long gold from $4,000, expecting a bounce to $4,400–$4,500 on safe-haven demand and oversold conditions.
• He wants to sell the US technology sector, noting high-beta breakouts have already been cut in half.
• He sees bottoming action in gold and grains, and believes an equity selloff will benefit the commodity space broadly.
• He recommends selling the US Dollar Index based on chart resistance.
• He advocates a long gold / short Dow Jones paired trade, citing mean reversion in the Dow-to-gold ratio.
• He warns that housing markets resemble 2008 with risky lending, overextended inventory, and a risk of bank bailouts.