Considerably Smaller

Portfolio Breakdown:
BAC - 2.9%**
PRGN - 17.7% *
APP - 2.1%
JPM - (3.6%)***
BWR - 2.8%
CAD Cash - 32.2%
USD Cash - 45.9%
* Sold 37 sept call options at 5 strike (0.05 premium)
** Sold 5 Sept put options at 16 strike (0.15 premium)
*** Sold 2 Sept call options at 44 strike (0.36 premium)

Portfolio Performance:
Return Since Last Update - 5.57%
Return Since Inception - 180.18%
S&P 500 - 1042.73
S&P 500 Return (June 30) - 13.48%

USD/CAD - 1.0773

The Prior Week of Trading:
I took this week to lighten up the portfolio by selling both some profitable positions as well as options on ones I chose to keep. I sold out of 2/3 of my position in APP as I see limited near term upside due to the prospect of the continuation in its current tight trading range; I like the exposure to high beta consumer discretionary in the medium term, but I think there are better ways to play this thesis. I wish I had switched from APP to TRLG, a name I have been watching for a long time, because it has continued to outperform it's peers; I would look to add TRLG to my portfolio on a pullback into the low 20's. I continue to stay bearish on JPM and to that end sold the September 44 calls and as a quasi hedge to this position I sold the September 16 puts on BAC; the overall pair trade of long BAC and short JPM becomes more attractive by the day and I will look to add to this position in the weeks to come. It was the right time for me to exit KFN as it traded up sharply the morning of Sept. 11 on very light volume; technically KFN seems to be entering some resistance in the mid 4 range and I would look for a significant pullback if the market decides to reverse course; I will look to pick this back up in the 3.75 range.

HNU was definitely my most successful move this week. I took the opportunity of extreme bearish sentiment last Thursday to go double leveraged long natural gas on that day and have since exited the trade one week after it's inception as it has gone beyond my expectations in a very short period of time. Last Thursday it seemed as though no one was long Natural Gas and when the commodity price traded off yet again following a smaller than expected build in the EIA inventory report I thought we had reached a state of maximum (or near maximum) pessimism; turns out, I was right. As I explained in my post from last week, my plan was to ride a bounce to the $3 level in the commodity and that is exactly what I did. I would expect natural gas to consolidate in this level in the weeks to come with a bias more to the downside than up.