$10,000 Thursday – Hedging Pays off – Again!

60,329 infected, 1,369 dead.

Yes, that's up 33% from YESTERDAY due to a "reclassification" of certain patients (from alive to dead?) or some would say it's the unraveling of a cover-up in China, where conditions are significantly worse than we have been led to believe by the Mainstream Media – whose primary goal is to keep us shopping at all costs...

Fortuntately, our paranioa is paying off and the Nasdaq (/NQ) hedges we suggested in yesterday morning's PSW Report (and reiterated in our Live Trading Webinar, of course) are already up over $7,000 and the S&P 500 (/ES) hedges are up $4,550 as of 7:30 AM.  We'll put a stop on the set at $10,000 (3,350 on /ES and 9,550 on /NQ) to lock in those gains and we'll just add it to our CASH!!! pile because, as I said in the Webinar – I don't want to run out and buy things until next week, when we will hopefully have a clearer picture of what's going on in China.  

Unfortunately, the picture we have today is NOT GOOD:

Let's just say that uptick on the chart is "disturbing" but I'm more disturbed by the very slow climb in recoveries (green) as that's a very long slope, between infection and recovery and 6,017 recovered and 1,369 dead is not the best survival percentage (81.5%).  If the common flu was only 80% survivable – do you think you would change your habits?  Again, I don't like to be an alarmist but no one else seemed to be alarmed this week so my concerns sounded alarmist – but I'm just being CONSERVATIVE – which I hear is quite in fashion these days…

My other concern in China, as I noted yesterday as well, is their looming debt bomb and Bloomberg picked up on my theme and wrote a good article summarizing the situation but I think this chart says it all – WORSE THAN JAPAN!

300% of their GDP is debt and half of it has been added since the Financial Crisis (10 years) so we're talking about $23
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