Very, Very Soon Now!

Over the next six months, the major banks, BAC, JPM, C, etc. have over $200 billion in bonds to refinance. JPM's last long-term bond deal was done at 8.625%.

But there's more. According to the Wall Street Journal, Freddie's Fannie have $225 billion to refinance by the end of September.

Let's see what bonds yields do over the next couple of months....

This will be huge, because it's all happening in such a short timeframe. Also, people are starting to watch this, and the yields investors demand will be front-page news. Time to go bearish on all equities except gold on this one.

I'm really thinking of cutting back on ALD and MCGC while this is out there. I will have to decide whether or not to hold these through, or sell and buy them back after the next market drop.

The VIX hasn't gotten a lot of attention lately, but it's just over 20. If it goes to 25-30 over the next 4-6 weeks, the DOW could drop another 1,000 points.

Or, the VIX could go to 40 and the DOW could drop 3,000 points in a week if Fannie, Freddie, JPM, BAC or someone else real big can't refinance.

Wait and see... and do a portfolio allocation study tomorrow.