Monday, September 2, 2013

Cross Currents

I am officially back from vacation, and ready to go into a sure to be interesting fall season.  The Syria news and the taper news has this market on tenterhooks.  In some way I believe they are related.  For the past eight months our deficit has been falling, and the Fed has probably bought all of the paper they dare to without disrupting the the bond/currency markets.  The Federal spending machine is getting anxious as new spending is what is required to secure new votes and voters.  Sequestration is strangling all of that.

What the market needs now is fresh capital and velocity.  Nothing like a little war and some govt spending to get the animal juices flowing, and the sequester set aside.  What is funny, ironic, and sad, is people predicted this six months ago, to the month.  We have gotten that transparent, and desperate.  The Administration, ours and the British did not expect the backlash against this war, and now confusion reigns.  I think they figure out a way to intervene, and I fear an unexpected reprisal.  In the meantime this is a very news driven market, and that is very dangerous, especially in September and October.

I am staying very light and relatively hedged.  I am long oil, short SPY, and long miners.  I am counting on no taper to occur, ever.  This will drive energy higher, and cause the equity markets to falter.  Miners will continue to move higher as a reversion to the mean trade.  I will continue to look for opportunities to buy XIV for either a day or a swing trade, and will scale in and out of current positions to improve my cost basis as I await the bigger moves I expect this fall.

My published portfolio 60% invested, 70/30 long/short, with an annualized gain of nearly 20% this year (all transaction costs included).  My individual picks are 141.8% on 268 picks, (no transaction costs included and no size of trades suggested).  I trade and offer for a basket of 50 focus stocks I follow, using my buy / sell trade signals.  Find out more at

Good trading this week.

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