Hedges did their work today. Moving down the stops on the short hedges and enjoying the ride.

"An overnight devaluation of the Chinese Renminbi pushed the exchange rate to more than seven per dollar for the first time since 2008 and spurred another sharp selloff, as the S&P 500 sank 3% for its worst one-day showing of the year.  The broad index saw its year-to-date gains whittled to 13.5%, and sits 6% below its July 26 highs

Treasurys ripped in near lockstep with yields declining 11 or 12 basis points across the curve and the 10-year falling to 1.72%, 35 basis points above its record close in July 2016. WTI crude fell back below $55 a barrel, while gold rose to $1,463 an ounce, its best close since May 2013.  The VIX finished above 24 and has nearly doubled in the last five sessions." 

Socks had another rough day, fell for a fifth straight day, with the S&P 500 wrapping up the week down a meaty 3%.

The hedging model is downtrend, full hedges on. Risk off.

"Recap July 31"

Stocks took a tumble with the S&P 500 finishing red by more than 1%, but well off its worst levels of the day.  The Treasury curve saw notable flattening, with the two-year yield rising two basis points and the long bond dropping five, and gold lost more than 1% to settle at $1,416 an ounce.  The VIX jumped to more than 16 and is up 33% so far this week.

Earlier today, the July Chicago PMI collapsed to 44.4, its worst reading since Dec. 2015. 

"The ISM-Chicago Business Survey, a regional view of the national economy, is a time-tested, market-moving report. The CHICAGO Report is available to subscribers 3 minutes before its release to the public 8:45 a.m. CT on the last working day each month. The Chicago Business Barometer, summarizing current business activity, also is known as Chicago Purchasing Manager Index or Chicago PMI. The Barometer is considered to be a leading indicator of the USA economy."

"We mustn’t give up. Ever.”

“How much of what I know, what I’ve been culturally attuned to believe, feels like the set of a play on a strange stage I’ve wandered onto without knowing why I’m here. I don’t know the lines, I don’t know what part I’m playing, I don’t even know what the play’s about or what it’s called. I’m just here onstage, stuck in a dream, lights shining in my eyes. Is anyone out there watching? The play stumbles ahead, feels like artifice, mistakes, frippery, an endless series of false starts, bad assumptions, all the while shadowed with the constant horror that something unforeseen could drop down on me from above or lurch in from the wings at any moment, that the floor could open beneath me and instantly erase even this small, pitiful existence, put out the lights for good...There’s only one redeeming feeling I can cling to...when it’s all stripped away and you realise you’re the only one who can put the pieces of yourself together, by yourself, alone...I’m noticing it has a tendency to focus and sharpen the mind, and strengthen the will to live constantly with all my senses wide-open to the here and now. One clear idea emerges from that crucible...We mustn’t give up. Ever.” - Mark Frost in Twin Peaks: The Final Dossier