Monday morning bullet points

* While some markets keyed on Yellen's comment that she expects to raise rates this year, one that did not is the (sigh) Fed Futures market.  Although it traded off of its Thursdays highs, the January contract (which captures any policy shift in December) remains well above its closing price on the day of the dovish Fed meeting.


*  When is a majority not a majority?   When Catalan separatists apparently win a majority of seats in the regional parliament, but not the popular vote, which suggests that one group of separatists will not join the others, rendering the ostensible majority moot.   Although hardly an expert on Catalan affairs, Macro Man could see any eventual referendum going the way of the Scots and les Quebecois- with the "leave" putting in a good show, but ultimately not convincing enough of the electorate to break away from the motherland.

* Donald Trump promises a "large segment" of the population will pay zero taxes.   Presumably he intends to start with the billionaires and work his way down?

* Flash HICP on Wednesday.   Large out-trades on this data have spurred EXB action in the past; it seems too early for that now, but a low number will get the rumour mill going.

* For those crackpots people that believe in lunar cycles as a determinant of price action: do supermoon eclipses have any special significance, and if so which ancient religious text should we consult to determine it?


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Polemic
admin
September 28, 2015 at 7:22 AM ×

Re last question. The ones in the libraries of Chinese billionaire FX punters, if you can get a translation.

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Anonymous
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September 28, 2015 at 10:43 AM ×

FT: some serious people have tried to correlate moon cycles with financial trends or reversals and of course came up empty handed. But this just means moon cycles have no predictive power;
still, thinking of the fact that the moon regulates many things in nature (tides, wildlife behaviour...) and that women's cycles are in line with the length of moon cycles, I wonder if mood swings in the general population could be somehow affected....
Not tradable I fear....

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Carry Trader
admin
September 28, 2015 at 12:18 PM ×

GLEN - Achtung! fear is back? and I thought I was safe from the overnight future moves.

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washedup
admin
September 28, 2015 at 12:24 PM ×

The last time we had a blood moon was in december 1982, the first month of a 17-18 year rally which took the s&p 500 15X - clearly this must mean if u buy today we will go to around 30000 by 2035.
But the last day of shemetah was Sep 14 and the market was supposed to crash that day because it always does.
Only one other wrinkle - Mercury is currently retrograde in Virgo - being the planet of intellect and wisdom and moving in the opposite direction to its natural motion in an exaltation sign, it must mean everyone will be wrong about everything all the time till it turns direct on Oct 9th.

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CV
admin
September 28, 2015 at 2:57 PM ×

Deflation panic is now looking silly, but you can't argue with the price (at least not in the short run!). It is perfectly reasonable to expect Glen or any of these other turds to go bust, but not now.

October will be difficult to navigate as per usual, and while I sympathise with people not wanting to buy here, please don't get sucked into the big short here. There will be a time for this, but it isn't now.

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carry trader
admin
September 28, 2015 at 3:35 PM ×

Relative calm in the FX space shows miners sold is a equity story rather follw up on weak chinese data overnight. Leverage can be a real killer at this stage of the commodity cycle. Still remeber xstrata during the crises.

BHP and RIO taken to the woodshed in sumpathy. Market pricing in risk of glen doing a fire sale to shore up liqudity and try to end the death spiral.

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Nico G
admin
September 28, 2015 at 3:40 PM ×

'please don't get sucked into the big short here. There will be a time for this, but it isn't now'

for fuck sake....

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Anonymous
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September 28, 2015 at 5:18 PM ×

Nico lives! And I take it he thinks the time for the big short is NOW?! :)

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CV
admin
September 28, 2015 at 5:33 PM ×

You think ?! :) ... Well, we can't both be right, that's for sure.

Refi schedules says the big puke in corporate credit will be in 2017-18 when a higher FDTR has probably also had time to fester, and the CBs are becoming cocky enough to believe they can "normalise" ... what we're seeing now is a siren song luring Mr. Shorty onto the rocks. Do like Odysseus, strap yourself to the mast and ride it out.

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abee crombie
admin
September 28, 2015 at 5:43 PM ×

HF favorites trade taken to woodshed. Terp and sune, yet the outlook for solar has never been brighter :) sell everything with yield and if HF hold it even better.

Double bottom is about here. Turnaround Tuesday ?

HYG certainly looks like capitulation soon. It did something similar in 2011.

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washedup
admin
September 28, 2015 at 6:46 PM ×

I know this doesn't feel true at all with this price action today (in that everyone thinks we will have a 17 hand on spoos by 3:30 EST), but I still think this is a basically a violent 2 way 1850-2000 market for the rest of the year - everyone kept complaining about how quiet and bereft of opportunity this market was for 6 months, well enjoy bitches.
I knew we were gonna break some supports when nico showed up!

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Anonymous
admin
September 28, 2015 at 7:14 PM ×

Copied from "tradermom" at evilspec:

Sept.16 chart

http://screencast.com/t/66VhQJLc9

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rp
admin
September 28, 2015 at 8:24 PM ×

hmmm cash volume curve looks a bit different today, no lull. I don't really know what that means though.

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Leftback
admin
September 28, 2015 at 8:51 PM ×

Q3 performance chasing.... managers falling over themselves to own the asset du jour... cash.
We added to European equity longs and we bought some November SPY calls. This seems more than a little irrational.

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Nico G
admin
September 28, 2015 at 9:22 PM ×

Market gave a brutal warning in August, a warning that a solid top was behind us. we had a bounce and classical grind up into 'oh noone wants to be short before' FOMC the next month. Folks who had been warned in August and were offered 2000 spooz at biggest FOMC in years still saw no point in shorting. Hopefully they trimmed longs. Market is now in a very fierce third leg down. But most people want to see a simple August low retest, and a 'brutal trading range' scenario is doing the round.

This worries me. There seems to be a clear denial of how much the bigger picture has changed. DM equities are finally repricing the reality of an abrupt end to world growth which commodities and EM traders had seen ages ago. So in retrospect the bounce from 666 to 2100-something on spooz need to be retraced. Somebody tells me why retracement should be done at 1850, what other reason than talking their long only mantra. Why does everything has to be a buying opportunity today?

We are all talking our book here, but as much as i could suffer the pain of being repeatedly short too early, if you ponder the bigger picture, i am afraid that folks who are average long at 1700 or 1800 might soon suffer like hell. Bear markets are cruel, and the JBTFD mantra, the celebration of funny money well, everything conspired to make everyone forget about the 2008 pain and catch you absolutely off guard. We had horrible thunderstorms here in Greece and a neighbouring island got completely destroyed (Skopelos) . This made us sail extremely cautiously . The same caution is warranted for markets.

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Anonymous
admin
September 28, 2015 at 9:23 PM ×

FT: long 70% equities at the close (it has been a while)... fearful but feeling brave (by the way 40 % CAC 60 % NDX)
if further weakness into quarter end, plan to go to 100% and light a candle this is not THE big one....
Still long a bit of PM but what a lousy hedge!!!! I guess the long cash short everything tangible is catching up with FT

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Anonymous
admin
September 28, 2015 at 9:48 PM ×

From Roberto Friedlander, Brean Capital head of equity trading:

At current levels, the S&P 500 is in the midpoint of a "significant" correction.

"Since the uptrend that began in 2011 was breached in August, we've been fairly confident that the SP500's price path has a greater than most imagine probability of passing through the 1700's before new highs are likely, and we continue to believe that SPX 1730 has a magnetic pull in a 'can test, could hold' kind of way. If we're right, 1730 would be a 38 percent retracement of wave three and, if it tests in Q4, there would also be potential support from the rising bottoms line which connects the 2009 and 2011 swing lows."

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rp
admin
September 28, 2015 at 9:50 PM ×

don't worry Nico, i'll be your friend.

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washedup
admin
September 28, 2015 at 10:16 PM ×

I did warn everyone about the blood moon sighting!!
Congrats on being short Nico - unfortunately I acted longer today than I had designed (WTF would they sell mortgage REITS down 3% on a day that agency MBS rocketed?) - kind of in wait and watch mode here. I just don't feel like doing anything at 1880 long or short.
Could this be the big one? I doubt it - some sectors in S&P haven't really rolled over yet - I am also sympathetic to CV/Mr T's idea that a deflation scare is usually not a recipe for a lasting bear market unless it results in bank failures - I think there is a 60/40 chance 2130 was the high, but its possible for equities to go sideways in a big range for a long time near the end of bull markets - bears are definitely in control here so I guess we at least retest the lows tomorrow - its just too easy.

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Anonymous
admin
September 28, 2015 at 10:51 PM ×

Unusual sell off in the European futures. It was almost quiet. No panic selling, but a persistent move lower. No bid, no panic sell.

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abee crombie
admin
September 28, 2015 at 11:31 PM ×

NICO I hear your point about bear markets. It's something to consider. But we should also remember there are loads of individual stocks 20 to 40% off their highs, and not all are oil related.

Today we had some more brutal single name action with valent , ete/wmb, and the John Malone trade.

But for me it's all high yield. Either hy knows we are going into a global recession or now is a decent bounce time. Not all credit is bad, and since credit is binary ( default or no default) it should actually be more security sensative. But not at the moment.

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Anonymous
admin
September 28, 2015 at 11:44 PM ×

Oh, my....New tests show Mercedes, BMW and Peugeot models consuming 50% more fuel than official results

http://www.transportenvironment.org/press/some-mercedes-bmw-and-peugeot-models-consuming-around-50-more-fuel-official-results-new-study

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Anonymous
admin
September 29, 2015 at 12:22 AM ×

Saudi cash grab...

Saudi Arabia withdraws overseas funds

http://www.ft.com/intl/cms/s/0/8f2eb94c-62ac-11e5-a28b-50226830d644.html#axzz3n4ugdH1D

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Anonymous
admin
September 29, 2015 at 12:38 AM ×

http://ftalphaville.ft.com/2012/03/26/936991/glencore-08-revisited/

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Nico G
admin
September 29, 2015 at 6:35 AM ×

abee

high yield/credit people are much smarter, much focused, they are professionals they do not watch CNBC. After our actuary school we all started doing research in credit (derivatives) and later trade it. We only got dumb when we started to trade equities because this is when suddenly 200 million people had an 'informed' opinion and there is just too much noise.

you have tons of single names down 40% from their high. So what? has anyone forgotten that we reached and surpassed 2000/2007 level of margin investing earlier this year. You are experienced enough to know what happens when they all have to sell.

Noone is prepared for the big one. Noone. We have reached the point of Santa Claus believing, they all want the seventh good year since 2009, a seventh year !! This is why the 2000 mark is important on spoos that would leave 2015 kind of flat. This is not going to happen. Personally i think that anything above 2007 highs in US equities has to be retraced.

On a smaller timeframe though, i am monitoring a higher low in Eurostoxx dec contract. If there is enough liquidation this morning i might even buy the auction for a wild right. Good luck everyone

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Nico G
admin
September 29, 2015 at 6:56 AM ×

PS: anyone who had an 'equity melt up' in mind or worse, wrote about it right before FOMC should really stop trading, take a few months off and try to go back to normal thinking

you are not to blame, central banks have distorted most people thinking. Now look at the mountain of debt. The mining/energy sector itself is so atrocious. $180bn for Petrobras alone! how can anyone expect a nice resolve with so much leverage around

the domino effect is only starting, cross assets

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