Thursday, September 1, 2011

well, well, well...

Its interesting to see how things go…the dollar is not going to make the lower low, nor is the EURO going to make its potential high. My weekly dollar long system triggered though I am sadly not short the EURO which will likely outperform on a relative basis - meaning the short of the EURO will likely be better performing than the long on the dollar for a similar amount of capital. As I indicated I would likely be, I am short - and at this point very profitable - up over 12% for the last several weeks. Therefore, I am short the major equity markets and expect significant new lows…in fact, I am not going to be surprised with a significant market dislocation and a breach of the 2009 lows on this move.

Regarding bonds…I expect the relentless trip towards insolvency of everything other than a few sovereign treasuries…therefore, the march toward negative yield will continue for the US Treasury bond. The move will be much more extreme than people are possibly imagining. Can you really imagine loaning the US money for the benefit of getting 97.75% of you principal back? Most can’t…however yields are likely to ultimately drop below negative 2% in my opinion.

Fundamentals are useless. Most of the talking heads on TV are pumpers and hungry for airtime to promote their 2% management fees (this is why my fund charges exactly ZERO percent management fee) and assorted alternate agendas…their pumping rings hollow…and people who may try to rationalize a credit and liquidity driven market will likely be left rationalizing the remaining size of their account in addition to their thesis that fundamentals matter.

My perspective is do not risk anything you do not need to if you are long…and that includes gold and silver…which were highly profitable shorts for me again recently. I will likely short them again imminently…there will be no place to hide.
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