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CGTS DAILY FOR THURSDAY 7 JANUARY 2010

CLARK'S GATE TIMING SYSTEM
Thursday 7 January 2010
 

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

    -- John Maynard Keynes



Everywhere we look we see warnings of bond market meltdowns: Karl Denninger warns about the meldown of Western sovereign debt

The Wall Street Journal writes about hedge funds betting on the collapse of Japanese bonds:

remington-work.blogspot.com/2009/12/bond...

BY GREGORY ZUCKERMAN AND JOANNA SLATER

 

Some hedge funds are starting to wager on painful times ahead for Japan, the world's second-largest economy.

 

These investors, including some who made successful bets against risky mortgages and financial companies in recent years, anticipate trouble for Japan's financial system. Their concern: Government borrowing continues to climb while demand for the nation's debt could taper off.

 

A collapse of the Japanese government-bond market "is going to happen; it's a question of when," said Kyle Bass, head of Hayman Advisors LP, a Dallas hedge fund, who has placed wagers on that outcome. He and others, such as David Einhorn's Greenlight Capital Inc. and a fund run by Daniel Arbess of Perella Weinberg Partners LP, have been buying a variety of investments that could pay off if the Japanese bond market crumbles.


English gilt markets are struggling; and the end of QE will test Britain's solvency and ability to adjust to higher interest rates.  Both England and France are being warned by Fitch that their national debt is threatening their AAA debt rating.  And if the treasury markets are in trouble, what about the municipal bond markets, with tax receipts falling for US states and municipalities, social costs rising (unemployment insurance, health-care costs, etc.)...

Iceland citizens are apparently balking at paying back English, European and Russian banks who arranged (by force apparently) for the bailout of failed Icelandic banks.  Iceland now will have a national vote on whether they want to pay back the money or not -- play by the rules.  Which brings up a point: do Americans really have to pay for the US bank losses -- or is that a game we are told we must play by those who make a killing off the game they created for their own benefit?
Einars Már Gudmundsson, an Icelandic novelist , said most citizens were unaware that Iceland's three leading banks –Landsbanki, Glitnir and Kaupthing – were operating as global hedge funds with exposure of 11 times Iceland's GDP.

"I had never heard of Icesave till this happened," said Mr Gudmundsson. "We were told that what these banks did abroad was nothing to do with us but when it all went wrong the responsibility fell back on us. Profits were privatised, but losses were nationalised."

He added: "We're told if we reject the terms, we will be the Cuba of the North. But if we accept, we'll be the Haiti of the North."

It's hard to read these reports and remain sanguine about the stock market rally and the future of our incipient economic recovery.  It feels like the blind sheep and being led by the blind sheep...to the slaughterhouse.  So, be ready, as investors, to sell and take profits at the drop of a hate.  There is a hammer in the sky poised somewhere above our heads (and it is raised) -- with such light volume, once the selling starts it won't stop quickly.


TODAY'S SIGNALS

We closed 53 trades today, 41 winning trades.  A 19% gain on ACH held for a bit over two weeks was our best trade.

Buy signals for today indicate the rally still has room to run.  Interesting short-sell signal on RGR (chart below).



6-Jan          
WEDNESDAY        
M2F Alt Trading System      
New Trades        
M2F ALT Trade Closed Trades      
Issue Close @ Position Open @ Date % Gain
MZZ_D 20.98 Exit Short $22.11 12/31/09 5.39%
UUP_D 22.85 Exit Short $22.88 9/28/09 0.13%
UUP_D 22.85 Exit Short $23.56 8/10/09 3.11%
SKF_D 22.8 Exit Short $24.77 10/21/09 8.64%
MYY_D 43.28 Exit Short $44.44 12/31/09 2.68%
BEN_D 108.92 Exit Short $107.56 10/29/09 -1.25%
^HGX_D 106.45 Exit Long $102.72 12/31/09 3.63%
XOM_D 70.02 Exit Long $72.95 12/8/09 -4.02%
CAT_D 59.43 Exit Long $58.55 1/4/10 1.50%
COL_D 56.42 Exit Long $56.15 12/22/09 0.48%
XME_D 57.16 Exit Long $54.22 1/4/10 5.42%
PNC_D 54.05 Exit Long $53.50 12/8/09 1.03%
SLAFX_D 53.47 Exit Long $52.33 12/9/09 2.18%
COP_D 53.01 Exit Long $50.60 12/21/09 4.76%
NEM_D 49.61 Exit Long $50.33 12/8/09 -1.43%
EWP_D 49.96 Exit Long $49.50 12/9/09 0.93%
JPM_D 43.92 Exit Long $44.81 9/28/09 -1.99%
XOP_D 43.99 Exit Long $43.14 1/4/10 1.97%
GES_D 44.38 Exit Long $42.64 12/18/09 4.08%
AMSC_D 42.87 Exit Long $42.15 1/4/10 1.71%
HLF_D 42.86 Exit Long $41.77 12/14/09 2.61%
HON_D 40.43 Exit Long $39.57 12/22/09 2.17%
STJ_D 38.28 Exit Long $37.17 12/21/09 2.99%
JJU_D 33.62 Exit Long $32.26 1/4/10 4.22%
ACH_D 32.1 Exit Long $27.07 12/21/09 18.58%
HK_D 26.33 Exit Long $25.32 1/4/10 3.99%
BEAV_D 25.85 Exit Long $24.90 1/4/10 3.82%
SGINX_D 15.17 Exit Long $15.29 12/4/09 -0.78%
XHB_D 15.51 Exit Long $15.11 12/31/09 2.65%
SEA_D 14.05 Exit Long $13.02 12/10/09 7.91%
SLM_D 11.76 Exit Long $11.30 12/10/09 4.07%
F_D 11.37 Exit Long $10.28 1/4/10 10.60%
FITB_D 10.45 Exit Long $9.75 12/31/09 7.18%
EWJ_D 10.09 Exit Long $9.62 10/27/09 4.89%
XGCSX_D 9.49 Exit Long $9.30 1/4/10 2.04%
BYD_D 8.69 Exit Long $8.75 11/23/09 -0.69%
IO_D 6.9 Exit Long $6.48 1/4/10 6.48%
M2F alt Trading System New Open Trades    
Issue Price Position Shares    
MMM 83.67 Enter Long 119.52    
KO 56.33 Enter Long 177.53    
EL 48.5 Enter Long 206.19    
           
M2F ALT Lterm 2 Trade Closed Trades    
Issue Close @ Position Open @ Date % Gain
KBH 14.36 Exit Short $13.82 12/28/10 -3.76%
M2F alt Lterm 2 Trading System New Open Trades    
Issue Price Position Shares    
FIO 23.7 Enter Long 421.94    
UTY 415.56 Enter Long 24.06    
BIDU 412.5 Enter Long 24.24    
COW 28.43 ENTER SHORT -351.74    
SDP 20.68 ENTER SHORT -483.56    
           
M5 (10) Trade Closed Trades      
Issue Close @ Position Open @ Date % Gain
ADBE_D 37.62 Exit Long $37.09 1/4/10 1.43%
BLK_D 234.67 Exit Long $238.58 1/4/10 -1.64%
BVSP 70729.344 Exit Long $65,925.19 12/21/10 7.29%
COL_D 56.42 Exit Long $55.99 12/28/09 0.77%
CSUN_D 5.35 Exit Long $4.85 1/4/10 10.31%
EDU_D 78.66 Exit Long $76.66 1/5/10 2.61%
EWJ 10.09 Exit Long $9.86 12/23/10 2.33%
EWZ 77.79 Exit Long $77.02 12/10/10 1.00%
FMCN 17.13 Exit Long $16.06 12/23/10 6.66%
FSLR_D 140.02 Exit Long $134.83 12/28/09 3.85%
GAZ_D 15.11 Exit Long $14.96 1/4/10 1.00%
HMA_D 7.26 Exit Long $7.27 12/31/09 -0.14%
JCI_D 28.84 Exit Long $27.80 1/4/10 3.74%
JJU_D 33.62 Exit Long $32.26 1/4/10 4.22%
MCD_D 61.45 Exit Long $62.78 1/4/10 -2.12%
PDE_D 33.21 Exit Long $32.78 1/4/10 1.31%
PPA 17.48 Exit Long $17.04 12/22/10 2.58%
SEA 14.05 Exit Long $13.21 11/30/10 6.36%
SLM_D 11.76 Exit Long $11.30 12/23/09 4.07%
UNH_D 31.79 Exit Long $31.53 1/4/10 0.82%
UPS_D 57.85 Exit Long $57.98 12/18/09 -0.22%
XHB_D 15.51 Exit Long $15.32 1/4/10 1.24%
M5 (10) Trading System New Open Trades    
Issue Price Position Shares    
VNQ 44.42 Enter Long 225.12    
JNJ 64.45 Enter Long 155.16    
HD 28.78 Enter Long 347.46    
SLG 47.7 Enter Long 209.64    
UTY 415.56 Enter Long 24.06    
SDP 20.68 ENTER SHORT -483.56    
RGR 10.15 ENTER SHORT -985.22    
           
M5D Simple Trade Closed Trades      
Issue Close @ Position Open @ Date % Gain
EUM 37.24 Exit Long $43.02 11/2/10 15.52%
GS 174.26 Exit Long $179.61 10/5/10 -2.98%
DRYS 6.36 Exit Long $6.35 11/25/10 0.16%
M5D Simple Trading System New Open Trades    
Issue Price Position Shares    
DRG 309.94 Enter Long 32.26    
           
M5/M5 Average Sum Plus New Trade Closed Trades  
Issue Close @ Position Open @ Date % Gain
None          
M5/M5 Average Sum Plus New  Trading System New Open Trades
Issue Price Position Shares    
None          


More information on this system can be found at

home.mindspring.com/~mclark7/CGTS09.htm

A draft of the book Turn Out the Lights can be found at the website below.  This book is a description of the metaphysical causes of the economic cycles of expansion (Day) and contraction (Night).

www.hoalantrangallery.com/Turnoutlights.htm
 

Michael J. Clark's Gate Timing System
Hanoi, Vietnam

84 4 221 92210





Disclosure: The author does not own issues mentioned in this article.