We bought $Yen to unwind our synthetic option and are left long. We sold the DJI to hedge our German Dax long as the global equity markets are struggling with higher interest rates. Currently, we are long the German Dax and the $Yen and short the DJI, and in synthetic option on the Euro$. However, a close below 1.0620 on the Euro$ would cause us to be short.

The risk moving forward from higher interest rates is that global central banks are losing control. The Bank of Japan has offered to buy Japanese Government Bonds “JGBs” at specific interest rates. This will protect against higher rates that could affect Japan’s ability to pay back its 250% of GDP debt load. We expect the European Central Bank to signal towards further quantitative easing after March 2017 to protect against a US Fed that is considering tightening. Janet Yellen’s testimony gave a fairly transparent look into the thinking at the Federal Reserve. After reading her testimony, we do not expect the Fed to tighten in December. What is troubling is the bond market is tightening for the Fed and the Fed runs the risk of losing control and triggering a negative loop in the bond and equity markets.

Janet Yellen testimony, "suggests that the U.S. economy has had a bit more 'room to run' than anticipated earlier... there nonetheless appears to be scope for some further improvement in the labor market." Regard to her outlook, "I expect economic growth to continue at a moderate pace sufficient to generate some further strengthening in labor market conditions and a return of inflation to the Committee's 2 percent objective over the next couple of years. This judgment reflects my view that monetary policy remains moderately accommodative..."

What is clear is that the Federal Reserve believes the neutral federal funds rate is accommodative at 0.25 -0.50% rather than a tightening. The Fed does not recognize the Natural Equilibrium of Interest Rates is 0% when excess bank reserves are positive. Rather, the Fed chooses to pay interest on this excess cash to keep interest rates above 0%. In sum, the US and global economy does not warrant a further slow down and in a global economy full employment is not inflationary but rather it is when demand for excess bank reserves is greater than supply.

On Thursday, November 17th we bought back our short in the $Yen at 110.05 leaving us long from 103. We also sold the DJI on the close at an equivalent index price of 18,900. Currently, we are German Dax and short the DJi, long the $Yen and in a synthetic option on the Euro$.

In 2012 modeled performance (7 ˝ 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 +72.68% with an 8% Hurdle rate
In 2016, modeled performance net of all fees is +46.26% with a Graduated 10% Hurdle Rate


The Unicorn Macro Fund, LP (“Fund”) operates under the SEC rules of 506(c) of Regulation D. This rule allows general solicitation as long as all purchasers of the Fund are accredited investors and the Fund takes reasonable steps to verify that purchasers are accredited investors. The 506(c) rule benefits funds that perform better than their peers, because for the first time, Regulation D funds can post their results publicly.

The Fund trades both long and short positions in a variety of global markets and its performance is not correlated to any one market. Performance of the model of the Fund is measured by Net Asset Value (NAV) which is net of all fees, is unaudited, and may include the use of estimates. Individual results will vary based on the timing of an investment and past performance is no guarantee of future results and there is a possibility of loss.

The modeled results are based only on capital appreciation from macro style trades. The results do not include dividend reinvestment or any other form of cash flow and are taxed as ordinary income. All trades have a risk/reward objective of at least 3 to 1 and each full position risks no more than 2% of assets. There will be times when market conditions may alter these objectives. Since the inception of the model our trading of the methodology has become more precise.