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CGTS Newsletter, Monday 2 Feb 2015 -- Short EUR/INR, Short GASL, Short VALE...

Monday, 2/2/15

Today the DJIA was down 170 points and then rallied; and this seemed to make everyone on CNBC relieved, happy, as if the trading bottom was in.

Those of you who are familiar with my writing know that I think we are headed for a significant down-side over the next half-decade. In truth, I am expecting a return to the 8787 level for the Dow Jones Industrial, before we bottom.

What about now, today?

Well, my view is that today's rally is pretty insubstantial.

My favorite long-term plays are long US TBonds (shorting the inverse ETFs, shorting yield).

Also, I'm long the USDollar, short the Euro. short the Canadian Dollar, short the Australian Dollar.

I think this scenario, strong Dollar, weak everything else, IS a picture of the deflation of the global debt bubble.

Note the chart I'm enclosing, ERX, Energy Stocks Bullish, seems to be suggesting that the OIL stock rally is just about over.

Today's new trades: short EUR/INR, short the Euro against the Indian Rupee, is our favorite trade of the day. See below for a complete list of new trades.

We also like the shortsell VALE trade.

Column1 Column2 Column3 Column4 Column5 Column6 Column7
% Gain From SYSTEM        
41.57% 12/2/14 1A. BOX One short-term    
36.04% 12/3/14 1A. Box TWO short-term    
25.41% 12/16/14 1A. BOX FIVE short-term    
382.75% 12/4/14 9. M2F ALT MUFFY #2 CUR int-term CURRENCIES
30-1 leverage    
Closed Positions    
New Positions      
SYMBOL Long/Short Price System      
XIDEQ Long 0.07 Box 1 Exide Tech      
QRM Short 0.07 Box 1 Quest Rare Metals    
IDI Long 1.10 Box 1 Search Media Carry-Trade ETF  
GASL Short 3.30 Box 2 Natural Gas Long    
VALE Short 7.46 Box 5 Vale, S.A.      
EDZ Long 35.33 Box 5 Emerging Stocks Bearish  
BZQ Long 87.76 Box 5 Short Brazil ETF    
EUR/INR Short 70.01 M2F Currency      

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Best trading,

Michael J. Clark, CGTS

Eugene, Oregon