Treasurys Post Largest One-Day Yield Decline in Three Years

Greece fears sent stocks sharply lower and bonds sharply higher.  Quite a snap back rally in fixed income today, just one day after hitting new 2015 lows to close out last week. 

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We partially exited our long positions in the TBF in today’s early going while maintaining our existing equity hedge positions in DXD, SDS, QID and TWM.  A bounce may be coming soon but we believe the action during the end of June is pivotal in the near term. 

More on the Treasury rally here:  http://www.marketwatch.com/story/treasury-yields-tumble-as-greece-sparks-flight-to-quality-2015-06-29

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Transports Breakdown

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We have remained focused on the Transport Index since mid May as an important market/economy tell.  This key index is in breakdown mode today as it begins to fall below a four week consolidation.  The extremely heavy weight of a declining 50 and 200 day moving average is taking a toll. 

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Shanghai Stocks Collapse

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The Shanghai Composite Index is off over 20% from its June highs.  For comparison, an equivalent drop in the S&P 500 Index from its June peak would drop it down to 1700.00.  A move of that size would take out the 2014 low.  If The Dow Jones Industrials fell to the same degree it would drop to 14,500.00. 

Some color on last week’s world markets action from Doug Short:  The top performers in our world market focus group over the past week were the two Eurozone indexes. France’s CAC 40 rose an impressive 5.06%, and Germany’s DAXK was up 4.10%, both bouncing back a bit from the European selling associated with the ongoing and rather tedious Grexit drama. But the bigger international story is the mounting evidence of the Shanghai Bubble. The benchmark Shanghai Composite dropped another 6.37%, following up on its 13.32% plunge the previous week.

Hat tip: advisorsperspectives.com

The Obamacare Economics Disaster

From Larry Kudlow:  The economics of Obamacare are very bad. The law is inflicting broad damage on job creation and new-business formation. It ruins job incentives by making it pay more not to work, thereby intensifying a labor shortage that is holding back growth and in turn lowering incomes and spending.

And across-the-board Obamacare tax increases are inflicting heavy punishment on investment — right when the U.S. economy desperately needs more capital as a way of solving a steep productivity decline.

Because of Obamacare, there’s an additional 0.9 percent Medicare tax on salaries and self-employment income, a 3.8 percent tax increase on capital gains and dividends, a cap on health-care flexible spending accounts, a higher threshold for itemized medical-expense deductions, and a stiff penalty on employer reimbursements for individual employee health-policy premiums.

Read the whole thing:   http://www.cnbc.com/id/102792711

Drought And Decline In California

From Ricochet.com:  Tired of being depressed by Supreme Court rulings? Why not switch it up a little and get depressed by California? In this week’s episode of The Classicist, VDH walks us through the real-world implications of the drought, explains how the state’s political decline owes to bigger cultural trends, and gives his defiant rationale for why he won’t be leaving California anytime soon.

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Quasi Modo Wins Big

Ugly Dog Contest

Quasi Modo wins top honors in the World’s Ugliest Dog Contest at the Sonoma-Marin Fair on Friday, June 26, 2015, in Petaluma, Calif. Quasi Modo’s owners, who travelled from Florida to compete, will receive $1500.

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About Us

Welcome fellow traders and investors,

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

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To Your Success,

Doug & Gary