Important Note: I have been extremely successful in predicting the movements of the yield curve since May, which tends to prove the validity of my models.
People who follow my lead have sold all their long term assets since, at least Sept. 8th. They own only US Treasury Bills and Notes with less than 2 Years maturity. None of their assets are deposited with any banks.
Now I am showing them how they can practically profit from that forecasted crash.
Recent Minimum of the Yield Curve on August
Orange: Objective; Almost Normal Yield Curve.
had a Hammer on Wednesday August 25th.
Note that we had two runaway gaps: on Thursday for the 30 Years US Treasury Bonds and on Friday for the 10 Years US Treasury Notes.
This TWIST will have dramatic financial and economic consequences.
all of the background I concluded that the most probable date for the
crash would be on September 17th.
That conclusion is reinforced by the realsiation of the prevision of a
good auction on Sept. 8th
by a dismal auction on Sept 9th.
Amount to be played: I suggest 25% or more of the avalaible cash on hand. (The expected probability of success of the Hindenburg Omen being at the minimum, 25%).
There are two distinct and consecutive steps: Stocks then Gold.
Given that the most probable date of the crash is Sept. 17th and that this trading day finishes with the Triple Witching Hour the most efficient of playing is to buy out of the money puts on stock indices expiration on Sept. 17th.
This is only for people with great sense of the market and should be used only by people with great experience of it and their own reactions.
The idea is that stocks encouraged by the illusion of a steepening yield curve will have first a sharp upward movement. The tops might very well be slightly above the recent tops and constitute a bear trap. I would then buy the puts when the underlying would be at 1028 and in any case before or at Sept 16th.
crash occurs when the market is the most optimist about its future. So
contrary to common sense there is no reason to have a high VIX (implied
volatility on SP500 commonly called the Fear Factor) before a Crash.
The Fear Factor is elevated because of a fall that has already taken
If the yield curve gets around the normal yield curve the market should be sold whatever its level and whatever the time.
For the Rest of Us, the Ordinary Folks:
That is 99% of the traders. We must split equally our investments between all the days from Sept 13th to Sept 16that the close, between 4:00 and 5:00 PM EST.
For every time and price of the underlying instrument (SP500) I will suggest two strategy. One which is a pure Crash play and one which will take into account a safe bet. My safe bet is 1040 although anyone can change that with his own taste (suggested values: 1080, 1060). The strategy suppose an objective for the crash (on September 17th) I will take 719, you can chose anyone below the safe bet.
The Strategies are regularly updated from the opening of the trading session in Wall Street on September 13th till Sept 16th at the close. Updates will be announced on the Facebook Event:
The strategy can be accesses on the Google Docs spreadsheet:
The strategy will be published on Monday 20th at the Open.
Libertarians Against Credit.
Muslims Against Credit With Interest.
Disclosure: No Positions