Dow Bear Flag completing...

For some perspective on the stock market, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 9.0 ounces of gold to "buy the Dow." This is considerably less (80% less) than the 44.8 ounces it took to buy the Dow back in 1999. While the actual Dow currently trades significantly higher than its March 9, 2009 lows (currently up 60%), the most recent rally that occurred in the Dow priced in gold is fairly similar to several bear market rallies that have occurred since late 1999. It is also of interest that the Dow (priced in gold) is once again testing resistance of its accelerated downtrend.

SSO Daily Swing Covers

Any unhedged short risk is now flat

Unhedged short risk...which reflects a few accounts -  flat now. 1110 to 1091 for ES...on this trade.

For the record, on a conservative (small position size) allocation basis accounts are up 10% for the month with the daily systems. On an aggressive basis, meaning larger risk allocations as a percentage of liquidity, live accounts are up over 30% for the month.

ES RVS Swing Shorts hedged up

We have now hedged up our short exposure and will hold these hedged positions short going forward.

Spokane, Washington And A Trip To The Lake

I traveled South from my bear free campsite to visit my friend Cat who lives in Spokane.  Cat and I have known each other for a few years now so each time I see her I know it will be a nice and relaxing time.  On this day, she had a group of friends that were going to the lake for the day so I was lucky enough to be here to participate.

I met another online friend, Kari who supplied the boat for the day of fun.  There was waterskiing, wakeboarding and for me, I ventured out for a ride on the tube.  Well, it's more of an inflatable circle mattress with handles to hold on for dear life, which I did.  Lucky for me, I didn't get bounced off of it.  I yelled out to the group on the boat to take it easy on me since I have, "limited health insurance."  Thinking this would be the ticket for an easy ride, the group yelled back, "you, and millions of other Americans!"

I survived the tube and took a back seat on the boat to capture others having a good time.  The weather was hot, the sun was out and the water was surprisingly not too cold.  To finish the day off, Cat coordinated a shrimp boil with the other women at a beautiful cabin owned by a few of the ladies in the group.  I felt very fortunate to be a part of this fun and special day.

On top of it all, Max had his very first boat ride!  He wasn't too thrilled about it or walking on the moving pier.  I took his kennel on the trip so he could hide away if he wanted.  He's not much of a water dog but I think he did have fun with Cat's dog, Bella.

I will be exploring the area for a few days to see what NorthEast Washington has to offer.  I look forward to sharing it with you.

TRN: Who regulates the regulators?

Look around the world. The Western world that is most influenced by US economic thought, right, the Brits, the Spanish, the Greeks, the Latvians, the Icelanders, they all had their own versions of this crisis, not driven by the US crisis, but driven by these perverse incentives that I've talked about and this belief that you didn't need to regulate or supervise. - William K Black

Market Comments

We covered most of our shorts today close to the 1099.5 level on the ES...and 647 TF is now flat from 667 also. Interestingly, the market may be postured for some upside probing...however the ES Swing system still has an open position an will look to add short if that is the case. All in all a very good day in a challenging environment. We are holding the remaining short as we close the books on a tremendous month.