In 100% cash

Eve of debt ceiling deadline. Took all positions to cash. Do I think a budget deal will be hammered out at the last minute? Probably. But the consequences for a non deal are too great to justify holding any positions. Do not underestimate the gulf and polarity between both parties. Let me stay high and dry while I watch the drama unfold.

Ytd: +77%

Took positions off

Cashed in on my Hang Seng position. Didn’t realise it was a market holiday due to China’s National Day. Not much action during the day as a result. As anticipated, we went over the government shutdown cliff but markets couldn’t give 2 hoots about it but instead enjoyed a relief rally that we can turn off the stupid countdown timer on every news channel.

Managed only to dispose HSI in NY trading hours at 22,936 (entry at 22,871) for a profit of $128.60 for a committed capital of $2,287 (5.6%). Also did a short(term) trade on MSCI Singapore enter at 363.95 exit at 364.95 for a $260 profit. Pure speculation as volatility shot up during the European hours.

As we speak, shutdown still in place, but debt ceiling breach in mid Oct will be the focal point. Looking for attractive entries.

US Budget Gridlock

Here we go again.

Both sides of the political aisle are doing their theatrics and holding the market hostage.

Has been quite a abysmal trading day for the Asian and European markets and US futures are pointing to a 0.7% drop at the opening. Not the bloodbath that short sellers wanted though.

What a privilege it is to be able to hold the market hostage 2-3 times a year. I’m pretty sure years down the road it will come to light that somebody somewhere will be found profiting from these market events with privileged information. I’m looking at you, Ben.

At the turn of the year, we averted the “Fiscal Cliff” that the media has so touted as the fiscal Armageddon and the Spring’s sequestration caused nary a ripple in the market. Will this be again a non event?

Or will it go the way of the market meltdown in 2011 after a similar congress tango resulting in a debt downgrade arising from “fitful politics” and an ensuing market meltdown? After all this time around, it seemed so real and senators are quoted as saying “They are afraid that a government shutdown seemed inevitable.

The implications are great for the market timer. Get it wrong and you will dig a hole so hard to get out of. But being too cautious will result in market moving far out for your liking.

My sense is after going through episodes of such, the more real it is, the more it is going to end up in puff and smoke. I’m going to go for the latter scenario as the government shutdown will if it happens be temporary. Really the deadline is nothing but moot. It’s not like a wrecking ball that threatens to demolish stocks markets but just a slow acting drug that chip away at US growth, one government worker at a time. In due course, both sides will arrive at some sort of compromise(surprise, surprise), the markets will forget about this episode faster than Miley Cyrus tweaking shenanigans.

At the point of writing, I’m long the Hang Seng at 23,981 to play the rebound and BBRY at $8.09 on the Fairfax acquisition deal.