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Getting Out Of Dodge

Throw good news on a market, and if it fails to rally, get the hell out of Dodge.

That is the ONLY conclusion one can reach in the wake of the blockbuster July Nonfarm Payroll Report of 209,000.

The headline Unemployment Rate reached a new decade low of 4.3%.

Yet the Dow Average managed a rally of only $66.71 on Friday, the feeblest of efforts. And most of THAT was picked up in only the last 15 minutes of trading.

Stocks did rally last week, some 1.2%, and the “DOW 22,000” baseball hats made their ritual appearance.

But they were worn with nervousness, if not despair, absent the passion and ebullience seen with the “DOW 10,000” or “20,000” hats.

To call this the most hated rally in history does a disservice to the word “hate.”

A number of savvy hedge fund friends of mine are now loading the boat with cheap insurance through buying deep out-of-the-money November, 2017 VIX $20 calls.

Buying the Volatility Index (VIX ) at an all time low can’t be a bad idea. Realized 30-day volatility is now lower than just before the 1929 crash.

Whatever tough sledding the market is facing should be over by then, giving players a shot at potential four or five baggers.

Particularly concerning is that Big Tech, the preeminent sector leader for the past year, is starting to roll over and play dead.

This may be the reason why.

Repatriation of foreign cash hordes has been a dominant theme here since November.

Since the largest companies all have money coming out of their ears, most are expected to use repatriated funds to buy back their own stock.

To give you an indication of the extend of this...