Ideal Portfolio

The CME Group publication, "Managed Futures, Portfolio Diversification Opportunities", shows a portfolio with the greatest risk and least returns comprised of 55% stocks, 45% bonds, and 0% managed futures. In contrast, a portfolio exhibiting the greatest returns and least risk, comprised 45% stocks, 35% bonds and 20% managed futures. http://www.cmegroup.com/education/files/ManagedFutures.pdf
Chicago Mercantile Exchange published a study concluding that a portfolio with 20% in managed futures yields up to 50% more than stock and bond portfolios, while possessing comparable risk.

To achieve this suggested portfolio mix, an investor should consider allocating 20% of their financial portfolio assets to a managed futures account

Dollar Index

The dollar index has broken above its 50 day moving average. From the chart above notice the inverse correlation between the dollar index and the equity markets. When the dollar index rallies the equity markets crash and vice versa.

Another sign that a top could be in place and we are all set for the next leg down of the bear market.

Nifty rangebound...sharp move expected

Nifty has been rangebound for few weeks now...traders have been getting stopped on both sides....Generally such a convergence/consolidation is followed by a sharp breakout or breakdown...who is going to take control this time bulls or bears? Probability favours the bears...

Market Update

Technically, the Nifty is showing strength, but signs of getting tired. The bull market is now running on speculation and emotion, and there is no fundamental support under the market.

The Dubai event is a good example of the kind of thing that has the potential to start a wave of selling. There are probably hundreds of them waiting in the bushes. Taken one at a time, they may only cause a momentary ripple. If too many pop out at one time, it could end in disaster.

Nifty volatile but trend is UP

The Nifty has been rangebound and volatile for the past few weeks. Currently the trend is UP and we have to respect the trend. A correction may be on the cards but that correction might come at 5200 or might come at 6000. The market is all supreme and we have to learn to follow what the market is telling us.

We can look at staying long as long as 5050 is not broken.

US heading towards bankruptcy - shorting opportunity of a lifetime

US Debt including unfunded obligations is around $100 trillion
http://www.usdebtclock.org/
http://brillig.com/debt_clock/faq.html




The Guidotti-Greenspan rule states that reserves should equal short-term external debt (one-year or less maturity)for a country to avoid going bankrupt.

The USdoes not have reserves to pay the financing costs for the enxt 12 months.

The fact of the matter is than anybody who is overleveraged be it an individual, a company or a country (like what happened in Dubai) is at high risk for bankruptcy.

The US is on the tip of a massive collapse. Great fortunes can be made by shorting the DOW/S&P. It's just a matter of time before this situation pans out.

Keep an eye on the Dollar Index

The Dollar Index and the Nifty work roughly inversely to each other....the correction in the Nifty (whenever it happens) will be observed by the Dollar index strengthening

The reason for that being as Investors flight to safer assets ...they will sell equities, crude, gold, real estate etc and move to cash (dollars)...

We definitely have some interesting times ahead...the best trending moves happen in times like this...there might be some volatility ahead but we will observe some trend soon...