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Strategy for The Crash: Update 29/07/09

The Age of Turbulence:

Plea for a New World Economic Order.

Preparing for The Crash, The Age of Turbulence.
Wednesday 29
th,2009.

"Prediction is very difficult, especially about the future."
Niels Bohr Danish physicist (1885 - 1962)
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Executive Summary:

The market Crash comes with low long-term yields, a deeply inverted yield curve and very low risk spreads. Hence before of the Crash we must have necessarily a bout of high level of Irrational Exuberance and global euphoria [Confer Chapter III. Greenspan Conundrum and Bernanke Global Saving Glut. Paragraph 3: Bubbles & Bursts. Chapter II. The Liquidity Trap: A Theoretical Curiosity. Paragraph 2: The Economic Conditions That Precede a Liquidity Traps.] No macro economic figure and no measure of risk can help us foresee the crash. Because of the fantastic amount of liquidity in the system, I expect the inflation of the Mother of the Bubbles. 

What I call the strategy is long Stocks,  Treasuries, Minerals and spread Treasuries/Corporate Bonds. 

What I call minerals are Crude Oil, Base Metals and Precious Metals.

I am long the strategy for 25% of my allowance on any time TYX< 46.00. I am stopping the strategy for TYX> 46.30.

I short Minerals when TYX> 46.30

In order to measure the exhuberance of the Market is is imporatnt to follow the spread Treasuries/Corporate Bonds.

I increase the invested % of my allowance according to individual Market key points.

Stocks:

SP500 Cash and Stocks: Stop Loss:  972.40.

Short-Term Key Points:  940.16    946.2    956.23    966.26    969.36    972.46    982.49    992.52    998.56

Bonds:

Key Points: 34.92    35.99    37.93    38.08    39.65    40.93    41.56    42.64   43.64    43.72    44.06    44.65    44.8    45.04    45.14    45.48    46.02    46.11    46.56    47.64.

Stop Loss: 46.30 

Oil Future:

Key Points: 65.52    66.48    67.74    68.8    68.99    69.18    69.18    70.53    74.7    76.28

Stop Loss:  65.48

Yesterday I Have reentered the Strategy at the opening of Markets and  TYX = 45.85.  I made money on TBonds, a little money on Spread Corporate/Treasuries, made a little money on Stocks and took a beating on Minerals. This is the advantage of being diversified in 4 Markets and starting with a small position and increasing the position as the Market confirms my trend.

I expect a short fall of TYX when the 5 Years Treasury notes results are published at 13:00.

I time the crash with the yield on USTBonds getting at 3.5605%.

The crash will be later then I previously anticipated. However I expect that timing it will be easier.

In case of change in the Strategy, I will twit:


Except in the Case of an Emergency
I never twit more than once a day!

 

All of This Stays True Until the Poor Becomes Richer Relatively to the Rich.

It Will be Proved by The Crash.

My Political Orientation According to Nolan Chart Survey!
 
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As Liberal as John Maynard Keynes!
As Libertarian as Friedrich August von Hayek!

Extreme Economic Conditions Call for Radical Solutions.
The Provocative & Controversial Innovation
Since John Maynard Keynes and Friedrich August von Hayek.


© 1994-1995 Shalom P. Hamou.