After these trades, we are positioned long both the DJI and S&P plus in a synthetic option on both. Meaning we will be positioned even longer in US equities if the market begins to rally and short if the market breaks down.

After weak US retail sales this morning, it became evident the US economy is not that strong and tightening by the Fed in December would surely slow the US economy down even further. As the G20 gets ready to meet this weekend, the global economy continues to struggle with deflation while the central banks provide cheap capital. Therefore, a US Fed tightening in December would be counter-productive to global monetary policy and the G20. We continue to believe the Fed will not tighten until the US economy becomes overheated.

These US equity trades are in recognition of the G20 meeting this weekend and the Fed likely to continue their easy money policy after the poor US economic numbers. Our expectation before the terrorist attack was central bank unity is needed to strengthen the markets, so we expected after the G20 meeting, more dovish talk out of the central banks. In light of the terrorist attacks, we expect the G20 to be strongly united, with a view towards easy money to stabilize and promote higher asset prices.

On Friday, October 13th in the morning we bought December mini-S&P futures at an equivalent index price of 2027.50. Also, we bought December mini-DJI futures at an equivalent index price of 17,275. These trades leave us long the DJI and S&P plus we are in a synthetic option on both making us 75% invested.

Modeled performance since inception, May 2012, net of all fees is +204.16%
In 2012 modeled performance (7 ½ mo.) net of all fees was +12.46% with a 10% Hurdle rate
In 2013, modeled performance net of all fees was +19.73% with a 10% Hurdle rate
In 2014, modeled performance net of all fees was +56.42% with a 10% Hurdle rate
In 2015, modeled performance net of all fees is 47.44% with an 8% Hurdle rate