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Central planners around the world are a force like no other. The amount of power they have and how quickly they can use it (intentionally or unintentionally) is astounding. So it should come as no surprise that this morning, Super Mario Draghi came out and basically said “let’s rock!” The plan is that the ECB will begin an “unlimited” bond buying program. Never mind the 8 to 10 handles the S&P 500 futures ripped before the open; slowing growth on a global scale seems to be what everyone is looking for these days. Whatever it takes, right?

SHORTING GOLD

With the central planner cartel getting ready to do some serious bond buying and undertake equally bodacious easing measures, the focus has now turned to gold for many investors. Drive down the US dollar, gold goes up and vice versa. Makes sense as we believe growth is slowing and will continue to do so for some time unfortunately. Here’s Keith’s thesis, word for word, on why he’s short gold even with this morning’s massive rip to the upside:

“I’m short Gold here. On balance, until turning bearish on Gold in Q1 of 2012, I have been a Gold bull since 2003. I have #timestamped 35 long/short positions in the GLD since founding the firm in 2008 (been right 30x). 

The more wrong I am on Gold (from here), the more right I’ll be on #GrowthSlowing.”

MANAGE THE RISK AND THE RANGE

You’ve probably heard this one before but we’ll continue to repeat it with no end in sight. It’s simple. You need to manage the risk and the range for any trade. If you are trading the S&P 500 and you know resistance is t 1407 and support is at 1398, well then you’re going to trade within that range and any deviation outside that range will make for a big move. Risk is simple. Too much is a bad thing, too little not a good thing. Get it together and figure out a risk level you’re comfortable with.

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ASSET ALLOCATION

Cash:                  UP

U.S. Equities:   DOWN

Int'l Equities:   DOWN   

Commodities: Flat

Fixed Income:  Flat

Int'l Currencies: Flat  

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TOP LONG IDEAS

NIKE INC (NKE)

Nike’s challenges are well-telegraphed. But the reality is that its top line is extremely strong, and the Olympics has just given Nike all the ammo it needs to marry product with marketing and grow in the 10% range for the next 2 years. With margin pressures easing, and Cole Haan and Umbro soon to be divested, the model is getting more focused and profitable.

  • TRADE:  LONG
  • TREND:  LONG
  • TAIL:      LONG            

PACCAR (PCAR)

Emissions regulations in the US focusing on greenhouse gases should end the disruptive pre-buy cycle and allow PCAR to improve margins. Improved capacity utilization, truck fleet aging, and less volatile used truck prices all should support higher long-run profitability. In the near-term, Paccar may benefit from engine certification issues at Navistar, allowing it to gain market share. Longer-term, Paccar enjos a strong position in a structurally advantaged industry and an attractive valuation.

  • TRADE:  LONG
  • TREND:  LONG
  • TAIL:      LONG

LAS VEGAS SANDS (LVS)

LVS finally reached and has maintained its 20% Macau gaming share, thanks to Sands Cotai Central (SCC). With SCC continuing to ramp up, we expect that level to hold and maybe, even improve. Macau sentiment has reached a yearly low but we see improvement ahead.

  • TRADE:  LONG
  • TREND:  NEUTRAL
  • TAIL:      NEUTRAL

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THREE FOR THE ROAD

TWEET OF THE DAY

“How one economist created the most realistic fantasy football league ever theatln.tc/PIwXtO” -@TheAtlantic

QUOTE OF THE DAY

“Conscience is the inner voice that warns us somebody may be looking.” –H.L. Mencken

STAT OF THE DAY

Samsung’s Galaxy S III smartphone usurped Apple’s iPhone 4S as the top selling smartphone in the US for the month of August. That is expected to be short-lived with Apple announcing its next-gen iPhone on September 12.