yotta's - art of symetry - wednesday, page-157

I've decided the markets are going to die sometime in the next 30 days.

What do I base this on?

Well a few things -

- 21t October is due date for Greece to make payments. With all this pussyfooting around in the EU, they will likely drag this to the eleventh hour. By then, the markets would have been severely damaged enough from the prospects of a fallout from Greece defaulting for the actual payment to matter.

- Gold prices are getting killed. This smacks of long liquidation, fund redemption. Risk currencies are destroyed, as positions get unwound. The carry trade is all consuming, and sure enough there was a brief snapback before more selling is resumed.

- This time around, the markets are rangebound, instead of slipping gradually. Buys at 1130 SPX and under and sells at 1190 and above have been working all of August. There will be alot of bottom pickers at 1130 that will get washed out.

- The US dollar is surging. People are piling into the 10 years. Despite the downgrade. That's fear.

The hard bit is where do you short and how much do you want to make.

I've decided to take a longer term view.

I've shorted a few indices, SPX, DAX and CAC from levels slightly lower than here. I'll short more tomorrow. The daily moves don't matter to me anymore - I've got 7% stop losses in place.

This short term trading burns positions, where bulls and bears are equally at lost as to what to do.

So I'm gonna risk 7% on a sizeable bet over the next 30 days. If the market hasn't broken through 1100 and careened off the cliff by then, I reckon there's good odds that the SPX will be closer to 1100 than 1200, in which case I'm gonna be infront.

However, if the unthinkable happens and it pops through 6000 DAX and 1230 SPX, then I guess I'm wrong, in which case buy buy buy.

As to why 7%?

The past two months, the ranges have been about 6-8%.

I'm backing my view that the market is about to crap itself, I just can't tell you when or how. But I do know that my targets are open, I wouldn't even begin to consider closing out my positions at least until 30 days are up, or if it breaks 1080.