Monday, June 24, 2013
When To Leave A Position!
Well, today I left my triple short gold position. A nice 24% return in just one week. Why press my luck. I am still holding on to both my 10 year and 20 year short treasuries positions. So when will I pull the plug on these? They have returned 7.5% and 7.9% respectively in the past two weeks. They were up this morning, but fell off in the afternoon. My PLAN is to hold them until the TNX, the CBOE Ten Year interest rate hits 3%. It is currently at 2.5480%. I believe that this interest rate will hit 3% in the next six weeks. If you are following the markets, bond and stock, THIS IS THE MOST IMPORTANT SINGLE THING TO FOLLOW RIGHT NOW. I also believe that as long as it is rising, the stock AND bond markets will continue to correct, so I would also remain out of the market until that happens or I get convinced that interest rates are stabilizing. One of the biggest issues facing the world economy is that in a rising interest rate environment, servicing the debt starts to become problematic for more than 70% of the industrial economies. For those that read that e-book I recommended, they will note that this has the ability to drive the world economies into a depression. The author particularly points to the ten year moving above 3%. Is the current interbank loan rate of 13% in China the beginning of the worldwide rise in interest rates.......Cash just may not be a dirty four letter word!