Loading Up the Hole of the GA.

...1% added to TLT (2% total), 2.5% unhedged VXX, and with yesterdays 15%/15% UUP/FXY.

35% full of market bearish investments.

It's Time to Pick Up Some VXX!

...I'll pick up a 4% (50%) max position at the close if prices hold at these levels.

Looks Like Bill is Headed to Cape Town.

http://www.straitstimes.com/business/companies-markets/bill-gross-warns-us10-trillion-negative-yield-bond-pile-is-a-supernova

...first time I remember reading Bill mentioning buying vol pos assets.

So how will this all supernova, as Bill said? Well there would be a mad dash to cash, selling BOTH equities and bonds of all stripes. In this mad dash to cash both the USD and yen would be the twin black holes sucking in all the worlds assets.

Now you know why I picked up UUP/FXY as ballast yesterday.

6/9/2016 Grounding Index +73

Picked up Ballast Today.

15% UUP and 15% FXY...both are risk off currencies and should help navigating the rocks.

Another day, another 'Fed Model' with the LB soaring on the opening and stocks after the open sell off rushing to catch up.

Interesting back in 07-09 stocks led the way down with bonds and the dollar/yen catching up. This time the LB is leading the way with the currencies trailing and the index shorts and vol hemmed by the lower LB yield.

Beg to Differ...George.

http://www.investing.com/news/world-news/george-soros-says-expects-support-for-in-to-rise-ahead-of-britain's-eu-referendum:-wsj-407419

...my read on the markets is that Britain will be waving bye-bye in a couple of weeks.

A Most Interesting Question.

Naturally the 'rock' index was back tested to see what it did in 2007-09 and the results were most impressive.

April 2007 (start of index)

April 2007 - Aug. 2007 Rocks.
August 2007 - November 2007 Safe.
November 2007 - June 2008 Rocks.
June 2008 - August 2008 Safe.
August 1st 2008 - February 28th Rocks.
March 1st 2009 - September 2009 Safe.

Maximum height of the rocks was on Feb. 1, 2009 @ 650, with no theoretical limit.

...more recently.

September - October 2015 Rocks.
October 2015 - December 2015 Safe.
December 2015 - May 23rd 2016 Rocks.
May 24th - June 3rd Safe... a one week trip!
June 6th - ??? Rocks.

$BDI Breaks Below 50 DMA

http://stockcharts.com/c-sc/sc?s=%24BDI&p=D&yr=0&mn=11&dy=0&i=t10907149952&r=1465426000962

...if you look at an expanded chart of BDI it's been in a bear market since 2014 with a textbook pattern of lower highs and lower lows.

90% of Money this Week Now Backing Leave!

http://www.express.co.uk/news/politics/678104/The-Referendum-Game-song-Brexit-EU

Reduction in Front Month Contango.

...recently at +16 now +12.

http://vixcentral.com/old/

Fall in contango trumped the rise in equities.

When Was the Last Time...

VXX was up for the day with all the equity indexes positive? Long-long time I'm sure. The reason was the reduction in contango having peaked at +16, last time I checked it was +12.

http://vixcentral.com/old/

6/8/16 Grounding Index +123

Moment of Truth for $BDI @ 50 DMA

...will it repeat or break the pattern of lower highs and lower lows?

http://stockcharts.com/c-sc/sc?s=%24BDI&p=D&yr=2&mn=0&dy=0&i=t03169645539&r=1465374057382

First Brexit then Franexit

http://www.telegraph.co.uk/business/2016/06/07/france-shuns-europe-as-brexit-revolt-spreads/

... pop goes the global bubble.

DOG vs. EFZ--When the Time is Right.

The DJIA short (DOG) vs. Europe+Asia short (EFZ) is 'out of the doghouse' for the first time in almost a year.

With the dollar falling a stock market correction will more severely hurt the Dow. Just as the dollar rising in 2008 hurt...relatively speaking, the Europe+Asia short.

6/7/16 Grounding Index +51

Grounding Index + = Risk-Off - = Risk-On

6/6/16 Grounding Index +43

Nine Straight Days Closing Above Mid-Range.

...sharing a post I made earlier today to the TVIZ board.

http://stockcharts.com/c-sc/sc?s=QQQ&p=D&yr=0&mn=0&dy=10&i=t08992887619&r=1465224208795

...the close slash is to the right of the daily trading range. The closing price has been above the mid point of the trading range going back to May 23rd. The pattern has been to buy the dip in the morning, killing off the pos vol.

As I said vol pos is toxic and will remain so until we can see a pattern of May 23rd type closings.

GT

Nine Straight Days Close Above Mid-Range.

http://stockcharts.com/c-sc/sc?s=QQQ&p=D&yr=0&mn=0&dy=10&i=t08992887619&r=1465224208795

...the close slash is to the right of the daily trading range. The closing price has been above the mid point going back to May 23rd. The pattern has been to buy the dip in the morning, killing off the pos vol.

As I said vol pos is toxic and will remain so until we can see a pattern of May 23rd type closings.

I'm Mad as Hell...

Europe Needs Britain More Than Britain Needs Europe.

http://www.investing.com/news/world-news/german-might-gives-way-to-angst-over-brexit-risk-406708

...if I was Merkel I'd fall on the sword of migration and micro Brussels rule making giving Britain 'special status' on both.

A Must Read Article--Explaining Everything.

http://www.telegraph.co.uk/business/2016/06/05/british-voters-succumbing-to-impulse-irritation-and-anger---and/

...people are irrational to the degree an imbalance exists between the right side of the brain (emotional) dominating the left (rational). Trouble is most people are right brain dominate, which means they can act against their economic self-interest in voting and investing.

Daily Grounding Index +25...6/3/2016

As the GA sets sail this morning deploying 1% of her sails buying TLT at the open, I've developed a grounding index to help highlight the danger of taking a northern (bullish) route.

The index is simple in that any + number indicates a danger of grounding (equity market sell-off), while any negative number is risk-on.

Match Race.....Week #22

GA starts out the voyage to Lisbon 3.26% YTD.

ASAIX gained a bit of ground at -2.97%, but QGMIX had another bad week now at -4.69% YTD.

Something Isn't Making Sense.

What a book does is make sure his book is balanced making a 10% vig off of both sides. Someone must be making big money bets on the remain side, unless the books are risking their own money which is a cardinal no-no. It will be interesting if the polls on vote day have Brexit leading by 5%, but the tote board closes out at 2:1 leave.

Calais is a 'Remain' Nightmare.

http://www.express.co.uk/news/world/676783/Calais-migrants-armed-dangerous-gun-bullets-wounds-police-France

...20,000 armed and ready to take to British streets.

First Syrians Now the Libyans

http://www.bloomberg.com/news/articles/2016-06-03/merkel-says-italy-can-t-handle-latest-refugee-influx-on-its-own

...and can't send them back!

http://www.reuters.com/article/us-europe-migrants-libya-idUSKCN0YO1GZ

...Substitute the English Channel for the Mediterranean and this is what Brexiters see happening to England.

Post-Brexit Boris and The Donald.

http://jamaica-gleaner.com/article/commentary/20160604/gwynne-dyer-brexit-what-if

Voyage to Lisbon Leaves 6/6/16.

...easy date to remember '666'--lol.

This is going to be one slow voyage, at least it will start out that way.

At the market open I'll buy 1% TLT and add 1% each week with no max upper limit percentage for each week the risk of rocks remains elevated.

During this time of rock risk, I'll also be watching to open positions in DOG/EFZ, UUP, and VXX. These I will actively trade with a max allocation of 30% index equity shorts, 30% US dollar, and 10% VXX vol positive.

As it stands today, even though there are rocks, the only investable asset it TLT, with all the other rock loving assets being 'toxic' by my technical indicators.

Once/if these assets become investible, we'll tack due south and change course for Cape Town.

Bon Voyage.

Thanks for the kind words.

GT

Painting Moving Along Nicely.

Home Depot was most helpful, the head of the paint dept. even picked out the color for me. Went with the best paint money can buy. Given my labor the cost of the paint is meaningless.

The Power of the LB Keeping Vol in Check.

http://stockcharts.com/h-sc/ui?s=edv%3Avxx

Pity the poor Vol pos players. Crappy news is greeted by a fall in the long bond with supports equities which would tank otherwise if not for lower long rates.

The Home of Magellan and da Gama.

...what destination could be more fitting for the GA's maiden voyage

http://www.golisbon.com/

Never have been there, looks like one quaint city.

North Sails Taken Down, Rigging South Sails.

Not yet ready to buy TLT, (shame the miserable jobs report couldn't have come after I stocked the hole)--that the way it goes some times.

Currently 100% cash/hedged VIX/VXX

The signal to buy TLT will very, very likely be given on Monday, and we'll then begin the journey. One piece of good news is the dollar is in a massive sell off which will make for a good buy when the time comes.

British Oldster's Worst Nightmare.

https://www.wsws.org/en/articles/2013/10/19/heal-o19.html

...image some 70+ oldster going into a HMS healthcare facility overrun by a bunch of migrants and their screaming kids. Now I know I'm not being PC, but this something that has to go through the mind of someone (my age) in England when it comes times to cast the ballot.

Would if I Could...Preparing to Tack South.

Tomorrow could be a most interesting day. At the open if the Yen rock is still on the sonar, I'll sell off my remaining bull assets.

If TLT scores a cross (30/70 odds) I'll load up with the stuff, 35%, at the close and set sail for Lisbon.

PS Started painting the house today.

How I See Our Journey Setting Up.

...First of all the reason I'm adopting alternate courses is because of rocks. Sailors might complain about storms and rough seas but what strikes terror in their hearts are rocks.

I'm charting a course for Lisbon and will be carrying a cargo of TLT in a day or so. Along the way I wouldn't be surprised if the north wind of winter and a change in current (lower interest rates) pushes the GA south to Cape Town. When/if this happens we'll make port in the Aleutians and pick up UUP, equity index shorts...be nice to have a DOG on board, and VXX.

Interesting that the southern hemisphere is just entering winter as I write. Best bring along some cold weather gear.

Also Looking at Possibility of Cape Town.

...yep, the deep freeze of economic winter might well be in our rather immediate future.

Charting a New Course for Lisbon.

The interest rate currents, both minor and major, are still pointing us north...but are weakening a bit.

The southern inflation winds have all but died out. The westward blowing growth winds (pos. for growth) are weak but steady.

All of this points us in the direction of Lisbon which would be well south of London. Sail will be completely down for our aborted northern voyage to England tomorrow at the open.