Thursday, August 06, 2009

A Poll

Tomorrow sees the release of what could be a critical NFP figure. After another solid run-up in risk assets, perhaps markets are vulnerable to a poor number? Anyhow, it may be instructive to see where punters expect the SPX to trade until MM returns...vote in the poll below!

40 comments:

JohnL said...

950 looks like a nice near term support. With SP500 P/E ~140 reported(July31) where's the value to the upside?

boat hull said...

Who knows how long this market can stay delusional. I did for years leading up to this. Although I think it’s downward bound I would be cautious in calling and end to this bear market correction.

Anonymous said...

Macro Man,

You need a less than 950 option to get a better read on bearish sentiment.

FormerlyknownasJS

Macro Man said...

Doh! There was supposed to be one there.

leftback said...

It's definitely still silly season and the junior varsity are running the trading desk. No big moves until after Labor Day and definitely nothing until MM is back in the saddle.

Anonymous said...

Yeah, I want a <950 option, too. :) With Deutche Bank jacking their prediction to -150K (far from the consensus - they will either look like geniuses or fools) today (and Goldman also updating to a more optimistic forecast), there is more potential for a bad surprise to move the markets. On the other hand, the markets have shrugged off anything that resembles bad news for the past four months, and they probably will power higher no matter what the number on Friday.

Nemo Incognito said...

Woohoo China cracks (for now).

Anonymous said...

funny how fucking bearish everyone is. DAMN!

Skippy said...

England top order crumbles again...

Bring on payrolls...

Anonymous said...

Perhaps a stupid question, but does anyone have an idea why the unemployment rate fell to 9.4 while payroll shrank 247,000?

Anonymous said...

Anon. The unemployment rate is based on the household survey. Not the payrolls survey. I have not seen the detail of the household survey, but it probably due to a change in the participation rate.

Skippy said...

My P&L has just crumbled like England...

Nemo Incognito said...

Ditto Skippy. Between the deranged intraday range on Hang Seng and payrolls this week has being rubbish. Small mercies to be found in the value RV part of the books though.

Rock out with my macro out said...

Are most professional investors not believing in this rally? I have been making mostly RV trades- done well but vastly underperforming this huge rally in risk taking.

Nemo Incognito said...

Smart people like MM appear to have been taking short positions selectively and covering them will a call option and a tight stop and then riding the vol up. Less intelligent people such as myself have not managed their sharpe quite so well with options and have had their vol blow out as a result even when they get it right. Moral of the story: pay up for carry when trading directionally.

Anonymous said...

Interesting shift in correl: strong $ plus strong equities.
Still, not a great day. JL

JohnL said...

JL what does the divergence signify? Money coming off the sideline chasing the rally?

Anonymous said...

Anon @ 2.07,

as 2.31 suggested, the household survey labour force participation rate fell 0.2% - equates to a 422k decline in the labour force.

Participation rate is now back to level at start of year.

Anonymous said...

JohnL I read a shift in sentiment towards the USD - buying for a recovery story (the consumer obviously overshadowed by the "broken window" metrics of the clunker scheme adding 1-2 points to H2 GDP or the pure inventory restocking lift) rather than USD as a pure risk barometer. Particularly on the €$, $JPY, $WTI and $XAU.
My tuppence.
JL

Anonymous said...

as a micro reader....all i can say is that i find indices elevated but an abundance of interesting single stock longs. companies have cut costs and are very lean. a small uptick in demand would drive significant upgrades in earnings. people may have issue with funnies and distortions from earnings but the reality is that cash flow has improved and that credit spreads have tightened as a result. it is merely the rally from the lows that make us all bearish, not individual company valuations. pick stocks and buy index puts would be my advice, maybe not what the macro investor wants to hear. saying that, the obsession in the market with the index level says it all. the reality is that pre lehman people would have said a stabilisation in US housing would reverse their bearish views. people now want to back away from that. lehman was a mistake and many of the issues that flowed from that are now being reversed. witness the writebacks at deutsche and bank of america. a stock pickers dream scenario. index protection cheap and a selection of stocks on historic lows in terms of sales and book multiples. until the end of earnings season, 1000 on the S&P has just become support it seems. wait until the institution get long before you sell. there is not enough wait on the long side for this market to sell off. the pain trade is up.

Anonymous said...

Pretty good signal on USD today. I think it goes significantly higher from here, at least 10%.

As for the equity bear/bull argument, volume says it all.

Bear rally.

Anonymous said...

one interesting observation i heard on volumes is that low volumes are often seen as an invalidation of a trend. however low volume can also show a lack of supply. that makes sense to me. the next big move on volume will be to buy equities. only then can we have a sell off i.e when the big players in the market are positioned long. not before.

Anonymous said...

Good to see the FX mkt trading back on fundamentals and not the risk on / risk off story.

Anonymous said...

mm use this vacation

come back confident and with positive energy

mpm

Anonymous said...

MM, are you sure you want to hang on to your Oval ticket?

leftback said...

Big move in AIG last week, and a huge rally in the GSEs today. More manipulation and inside information …. this may be the most transparently criminal trading market since the early 1930s.

Bloomberg was pumping the story of a rise in the VIX as September options volume increases. They are telegraphing the crash, even as Abby Jo sings her siren song to lure the unwary onto the rocks….

Nemo Incognito said...

HSI breaks new 20 day high and loan growth still over 28% pa. Let 'er rip.

Skippy said...

Nice double-top on the Shanghai Composite, however.

Fantastic win by Australia :)

Anonymous said...

"The market can stay irrational longer than you can stay solvent."
Keynes

Damcanu said...

If the FTSE future breaks below 4667, then we have a possible double-top / 1-2-3 top on the 30min chart.

leftback said...

Yes, yes. Fantastic win by Australia. No arguments there, Skippy. Dominated from the very first ball.

All to play for at the Oval. :-)

Nic said...

Maybe if the FOMC announce tomorrow that they will end QE in September it will wobble the indices? Bond buybacks are due to end in Sep.

Anonymous said...

A sure sign that the US residential market has more weakness- Hugh Hefner struggled to sell a mansion next door to the Playboy mansion- article on The Telegraph.
If you can't sell a property next door to the playboy mansion at the ask, times are bad.
http://www.telegraph.co.uk/finance/financetopics/recession/6007514/Hugh-Hefner-sells-LA-property-as-financial-crisis-hits-Playboy.html

Anonymous said...

i think the novelty of living next door to hugh would wear off quicker than a mortgage.

Anonymous said...

i think the novelty of living next door to hugh would wear off quicker than a mortgage.

Hull Speed said...

Dude, would you get your ass back already?!
Your obviously earning too much money to be taking such long vacations.

Anonymous said...

Nemo - what's your take on Shanghai at the moment?
Cheers
Chris

Adam said...

Natty Dread inna serious Macro withdrawal...
Didnt realize how much I crave some morning MM with I and I coffee.

leftback said...

Time for a poll on whether QE will continue. I suspect that it will not, not least because it didn't really work and because the Fed will focus on the TALF now, with a view to CRE assets, but opinion seems to be divided.

Professional Gringo said...

Yes...being a slacker in South Carolina...enough is enough already. MM you missed a beautiful thing on USD/Cad this morning.

:)

Anybody buying this AP report that the Swiss will rat out the names?