7 Short Targets

I ran another short screen. Criteria: volume up 50 percent from normal and down at least 5 percent last week, plus volume and market cap screens to eliminate small and low liquidity stocks. There are a couple of tech firms, the rest are stocks I'd classify in the "inflation" trade category: industrials, chemicals, rail. I have slightly OTM puts on APD that were way OTM when I bought them about three weeks earlier.

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Salmon Jumping: Materials

Materials is a target rich environment if you buy into the deflation thesis or want to hedge it. Energy is the top pick, but some of these stocks are boring sleepers that aren't heavily traded. That makes for illiquid options, but also sometimes underpriced options. Some of the options in the materials sector are dirt cheap if you assume deflation. I skipped any chart that didn't look toppy, but the top-10 are almost all ugly. Newmont is included, even though I have calls, because it could be cut in half in a deflationary panic. Note that I expect Newmont would outperform most commodities stocks in this scenario. Purple line on IFF is a regression line for the whole chart. Individual targets after the jump.