China Syndrome

China is collapsing.  The fact that this somehow will not affect us is ludicrous.  What makes this so scary is that 100 people run China, all corrupt, all seeking their own self interest.  The policy mistakes and distortions already made, and the ones about to be made will turn this into a bloodbath, and for China that will be literally one,

For us, massive deflation is and will be washing ashore.  If you are an investor there is only one place to hide.  That is long bonds.  Everything else is going to be cooked.

For traders, we need to focus on selling rallies.  That means buying VXX when oversold, shorting SPY/IWM, and the FANGSTA (Facebook, Amazon, Netflix, Google, Tesla, Solar City, Apple) stocks when overbought.  Throw in Chipolte, as well.  They lost the young ones.  As my near 15 year old puts it.  I don't eat where there are diseases.  Her, and her friends are done.  They moved on.

Tesla will be especially interesting as they don't have the cash to pump up their shares.

I am also watching REK/SRS for signs of stress in Real Estate, and BIS for Biotech

For today, we are happily Short.  We have been having a very good couple of weeks.  Signals are working.

AAPL
IWM
XLE
SPY

VXX popped overnight so missed the long signal, but will watch for opportunity to enter.