Well, as you can see from the post below there now a vacancy at the
helm of the Good Ship MM. I am still occupied penning an institutional
version and befouling the airwaves at Bloomberg, and while Detroit Red
will hopefully keep chipping in, Shawn will clearly be missed.
However, his gain (and the blog's loss) could also be yours! I certainly derived a great deal of utility from the authorship of this space, and as you can see Shawn did as well. As a means of keeping your skills honed (and trying out new ones!) in a forum that is both crucible (via exposing your view to public scrutiny) and shop window (by demonstrating how smart you are!) , I would humbly submit that being the newDread Pirate Roberts Macro Man is close to unparalleled.
And besides, check out these great benefits:
* Salary: $0
* Health/vision/dental: None
*401k: None
* Vacation: At your discretion!
In seriousness, if you are interested in taking up Shawn's mantle, particularly if you're an experienced punter between gigs, please hit me up at mrmacro -at- gmail.com.
-The Original MM
However, his gain (and the blog's loss) could also be yours! I certainly derived a great deal of utility from the authorship of this space, and as you can see Shawn did as well. As a means of keeping your skills honed (and trying out new ones!) in a forum that is both crucible (via exposing your view to public scrutiny) and shop window (by demonstrating how smart you are!) , I would humbly submit that being the new
And besides, check out these great benefits:
* Salary: $0
* Health/vision/dental: None
*401k: None
* Vacation: At your discretion!
In seriousness, if you are interested in taking up Shawn's mantle, particularly if you're an experienced punter between gigs, please hit me up at mrmacro -at- gmail.com.
-The Original MM
62 comments
Click here for comments* Salary: $0
Reply* Health/vision/dental: None
*401k: None
* Vacation: At your discretion!
Nah.....sounds like the same package at packers!
FOREX INTERVENTION SIGNALS THE PATH FOR HIGHER RATES IN HONG KONG NATIXIS
ReplyHKMA WARNS LIQUIDITY MAY SUFFER AS RATES INCREASE
97% OF HK RESIDENTIAL MORTGAGES ARE FLOATING RATE
AT 19.5X AVERAGE EARNINGS HONG KONG IS THE LEAST AFFORDABLE PROPERTY MARKET IN THE WORLD
my favourite topic
Replyhttps://www.bloomberg.com//news/articles/2018-04-16/ecb-asks-deutsche-bank-to-model-trading-book-solvent-wind-down
the clock is ticking for Das Bank
Dow Jones Transports broke out above the trendline from Jan highs, 50 and 100 dma's - stops galore. 10800 is next - top of the 700-point box. Despite what some say is a voodoo art, technical analysis is a part of the game. If you know where the stops are placed you could shoot for them. I know, it's boring, repetitive, not cool. I'll take all of the obove to make money.
ReplyHKMA SEES NO NEED FOR ANY INTEREST RATE ADJUSTMENT MECHANISM
ReplyTranslation: they know the USD peg cannot be maintained without aggressively increasing rates and thus crashing the real estate market and the broader HK economy with it.
Is Buy Stocks available?
ReplyHONG KONG DOLLAR PURCHASES BY HKMA INCREASE TO HK$9.357B
ReplyWe had drawn out a descending triangle with SPX arriving at 2700 on or around 4/20/18. Looks like we may arrive slightly early. Of course, all such descending triangles end, and then the spoos should break out. Upwards or downwards?
ReplyThe euro boat is getting ready to sink, imho. I added to my USD long today. Speaking of decsending triangles, DXY broke out of one and is backtesting the broken upper trendline. Classic behavior prior to takeoff in the direction of the break. Williams and Stoch are hooking up too. EUR third touch of the downward trendline (from Feb 15 high) was rejected hard today on ZEW disappointment. Price is testing the lower end of the 122-pip channel right now. I say EUR is going to 1.20 if not lower. Intermediate targets: 1.2210 1.2150 1.2080
ReplyThe most important chart people can pay attention to right now in the world is the SHCOMP & HSI in my opinion.
ReplySHCOMP broke through a lower channel it has been in for the past two years last night. That is bad... especially when you account for what is going on in Chinese Banking right now. HKD hitting the top end of the peg is causing issues with liquidity in Hong Kong, and as HKpunter mentions, this will lead to bad things all around China.
See chart here - https://imgur.com/a/xKoe9
Also, notice all US banks selling off after earnings right now amidst a rapidly flattening yield curve. That = not a good sign.
@Cbus, with all due respect, SPX 2752 level is more important than that. Might as well stop trading US equities if you are going to key off of SHCOMP. You would have been upside down from mid-2009 through mid-2014. HSI may give you somewhat of a read, but in reality, it simply tracks SPX. I think tail can't wag the dog just yet. I am gonna hear it from @hkpunter now :)
ReplyI got it right here for ya (pic below).
SPX - Yellow
SHCOMP - Blue
HSI - Red
https://www.tradingview.com/x/BSdzNKbA/
Have been waiting for what seems like an inevitable turn lower in GBP. Today's reversal candle might indicate that we are there.
ReplyGood spot on the banks, Cbus. Indeed, the XLF sold off after spiking on Friday and then had a shockingly miserable day today despite the gap up. If China and EMs do lead global markets lower as they have done before, will that finally put a bid under USD?
We opened modest short positions in SPY and IWM after the gap fill to SPX 2712. If we are still in the same old range trade, then we are bumping up against the upper bounds of the range here, the last two reversals have come after SPY hit the upper Bolly band. That type of behavior is symptomatic of technical range-bound markets. SPX can certainly nudge a little bit higher this week, but absent some unforeseen catalyst, the rest of the week may be a snoozer, and the likely dynamics around options expiration should keep SPY constrained between 270-272 through Friday. Bolly bands are now SPX 2569-2721 or SPY 256.2-271.6, IWM 147.8-157.8.
@IPA,
ReplyI'm not really suggesting that the SHCOMP is an important chart as it pertains to trading from a technical perspective. But I'm moreso suggesting that from the macro perspective, everything is dependent on China right now. And as for China, the SHCOMP looks ridiculously unhealthy.
When the biggest banking bubble in history starts to show signs of cracking, nothing else in worldwide macro matters in my opinion. If the China bubble breaks, then it will affect everything.
GBP assets being bought, citi recommending overweight etc.. start of towel chucking from the Brexit disasternistas (it will happen one day etc). But overall UK is still looking rosy, so I can't yet get gloomy for GBP. especially vs EUR which I agree has a wobble coming.
ReplyOverall I am looking for risk to rip higher. Still long oil and gold related stuff.
Energy / oil was expected to dip after the Syria bombing as it was thought it went up ahead of it but biggest surprise will be for oil to keep grinding higher.
Like Africa still, trying to hoover up anything Zimbabwe linked but v hard to find anything retail tradable.
No I'm not 'Buy stocks' but I'm that way inclined
pol
@Cbus, you know I did not mean technical analysis solely as well. I hear all these recycled horror stories about China - ghost towns, shadow banking, etc. I am going to trade what I see in front of me and I am pretty sure SPX will let me know when to bail. Most multinationals will respond to that kind of stuff fast. Also, chart of FXI looks like large co's are not too worried at the moment and perhaps a slight divergence is under way.
ReplySHCOMP is light blue
https://www.tradingview.com/x/WMlJaNKE/
@IPA, I think that's a fairly reasonable assessment and a fine strategy for trading.
ReplyWith that said, do note that 2015's slowdown was preceded by (and caused by) SHCOMP's crash. In older eras, China wouldn't have affected global markets as much since they were much smaller and the world economy wasn't nearly as intertwined as it is now. Now, they're much bigger, their credit is out of control, and everyone is dependent on growth in China to grow themselves. Problem is... growth in China hasn't been real for a while now, it's just been money printing. And now that there are material signals that everything is slowing down in China, is anybody really surprised that Europe is starting to hurt and everywhere seems to be slowing down somewhat? It's not a coincidence that when the growth engine that drove almost 10 years of economic prosperity slows down, the rest of the world also slows down.
'Forthcoming China Doom' is the cosmic background radiation of financial chatter. When that is all you see you know there is nothing else to worry about and all is well with the world.
ReplyDow Jones Transports @ 10800. Stops scoop is in progress. Two scenarios unfold: back to the bottom of the 700-point range or breakout and box extension. This trader is taking profits. Small runner is left on.
Reply@Polemic
ReplyMake the case for China then. Please explain how they're going to normalize without blowing up their financial system.
People harp on China bears because they got the timing wrong (some marvelously so). That doesn't mean that the actual bear thesis was wrong in the first place, just they ignored how long a command-based economy can prop up their financial system. Literally every signal and issue you would look for in a country about to experience a banking crisis is taking place in China right now. And considering China has the world's biggest banking system, that's worth paying attention to.
I guess my main point here, is that you should be wary of the fundamentals, and look for the timing separately. Be careful of ignoring macro warning signs just because people got timing wrong on their calls in the past. That is the equivalent of boy-who-cried wolf type logic here.
I still think WTI is at the top of the $10 trading range. I think it is going to head down to $58.
ReplyCbus
ReplyI don't have to make the case for China, I just have to point out that Silicon Valley would never have been built if the inevitability of the San Andreas Fault ripping the place to shreds one day had been the driving factor. Yes, China may ONE DAY blow, but it is as completely untradable in the now as going short NASDAQ is on the upcoming Californian earthquake.
And my point stands on narrative. If the only gloom twitter et al can come up with on any day is the 'one day China will blow' story, then all else is fine.
@IPA, good spot on the DJT. Entered into a short position at just a little bit lower than 10800. Saw a few others mention this too.
ReplyOther daily market notes I picked up on or read elsewhere....
1. SPX closed on a nice little doji. Thursday / Friday looks like a good day for a reversal possibly.
2. Financials still down, and have diverged from SPX as a whole rather notably.
3. Beige book stopped a big tightening in the yield curve today. With that said, the yield curve is still on pace to invert in July if it keeps going at the rate it's been dropping at over the past few months. If you go off the longer trendline, curve inversion will occur moreso around October. Of course, this will depend on fundamental factors which can change the long term trendlines, but not looking super ideal.
@Polemic, I appreciate the response, but there is a lot more than just saying "it'll blow up one day". China has always (at least since 2009) been a problem waiting to materialize, but it's been a matter of getting the timing right on it. I think most of my thoughts are that a lot of the issues are starting to materialize more prominently right now, and the timing is starting to get much "closer". Here are some things to consider.
ReplyChina Technicals - These aren't fundamental factors, but can help to indicate the timing of things
1. CSI 300 broke the neckline of a very obvious head and shoulders.
2. SHCOMP is sitting below the 200 day MA, just saw a death cross, broke below a 2 year bear-flag channel, and is among the worst worldwide performing indexes this year.
3. Chinese market breadth has been a classic example of megacaps outperforming small caps in the final stages of a bull. Compare small cap chinese indexes to mega cap chinese indexes this year.
Fundamentals
1. China just approved cutting RRR 1% to boost liquidity in their banking system. I think the most prescient thing to ask about this is "why did they need to do this in the first place?". Additionally, why have chinese banks been sucking in eurodollars so much? This likely is partially related to the rise in Libor, and why Libor is still high despite repatriation effects being out of the way now.
2. Chinese home prices have decelerated for the first time in most major markets since 2015, the last time China had a (partial) crash.
3. Commodities and demand are supporting a big slowdown coming from China right now.
4. Their debt is ridiculously large... This isn't really anything new to anybody who cares about Macro in the slightest, but it still needs to be stated since it makes America's pre GFC debt look like a drop in the bucket.
5. The Hong Kong currency peg is being tested for the first time in a very long time, which is forcing HKMA to withdraw liquidity in Hong Kong in order to defend the peg. This is starting to push Hibor rates up, which will raise interest rates in Hong Kong which have been artificially low (even lower than US rates) for a very long time. Hong Kong is the most expensive RE market in the world, and has over 90% of their mortgages based off the Hibor rate. I think it's pretty obvious how this is not a good setup for things.
And then on top of all that, you get the crazy geopolitical stuff going on right now. Overall, there is a LOT more here than just what I stated above. These are just a few "high level" bullet points. You could go on and on much further. I certainly don't have all the answers, but the more you look, the more red flags start to pop up here. I don't discount the possibility that China could do yet another stimulus package, but at a certain point, they will become entirely unsustainable. They have already started to have drastically diminishing real effects on the Chinese economy, which is not what you want to see if you're the Chinese. I suppose I'll just say that when both the IMF and BIS issue warnings about a potential banking crisis in China, it's relevant to pay attention as they both tend to be more conservative than any traditional publication.
@Cbus, not to write an essay on my trading, but...I need to clarify my stance. I am not shorting DJT here, I took profits @ 10800 and left a small long runner on just in case the top of the box pops. My bias is still long but what I have learned through the years of trading US equities is that horizontal breakouts scoop stops and then pull back. So my thesis is the following: first breakout occured today and as we clearly see it scooped the stops and failed, some short-term pause may rest the price here but also may pull it back to test the broken downward trendline. With that being 300 points below it may just be too much of a stretch, especially after CSX blew out their earnings and now everyone woke up on trannies. So most likely a minor pullback brings the price down to rising 100 DSMA and scoop of those stops and perhaps some three-day trailing stops occurs. I would add to my long there. I am not dare looking to short here, I think DJT is going up still. Just wanted to clarify because there are all kinds of signals out there and myriad of time frames, mine is definitely not intraday. I got a swing approach and shooting for buying the pullback and going back to January highs. Buying the breakout above the downward trendline and selling here at the top of the box was my original plan. Had no idea it would pop this fast, CSX accelerated the gains for sure. Note that DJT has been in 1600-point upward channel since Jan of 2016. Nothing has changed, just buy/sell the touches of the channel boundaries.
ReplyCBus.. I'm on the other side - I have just gone long China.
ReplyNice China debate. China crash not analogous to the fault line... And there was a massive slowdown 14-16 that almost bankrupted 50% of mining companies. So lots of tradability around.
ReplyWhat I agree with is that its very hard, and in most cases foolhardy, to predict "the big one". But to try and predict small moves should be bread and butter. The difference between China importing 5% less of a commodity vs 5% more is several hundred % on a ton of equities. So trying to get a jump on that has value.
markets, my 2c from a non-macro trader, big picture dollar is toast, and will take down tech and US stocks with it. Vol will remain higher regime. Oil seems to be structurally undersupplied. Eurozone weakness probably transient
@Polemic - I suppose time will tell us who was on the right side of the trade. Like everything, this one of course is all about timing, which is difficult given China's Government's penchant for intervening.
Reply@IPA, thanks for the clarification. Regardless, it was a good opportunity to buy a short term put for me. Was never really going to be a long term trade. I already closed out the put for a hefty gain.
Replynoone is mentioning how 10Y yield is shooting like a rocket
ReplyWe have seen some interesting turn-arounds:
Reply1) The flattener is off for now, and we have a sharp steepener. HY and equities not liking it.
2) SPY and IWM turned around yesterday and continued in that direction today.
3) GBPUSD peaked, turned and now looks ugly.
4) Crude oil spiked and has reversed on the day.
5) VIX bottomed on Tuesday and is now back over 16.
Obviously, many of the elements above are "risk-off", except for the action in Treasuries.
We are short SPY from around 270.75 and IWM from around 157.25. AAPL is under-performing today and yesterday, just as it did beginning Jan 18 into the last earnings report, falling until the Feb 8/9 lows.
An action replay of the February and March sell-offs would see equities fall 6-8% over 9-12 trading days.
@Unknown, dollar is toast? Wait until TNX crosses over 3%, DXY will explode higher. Let's just say dollar has been relatively toast for a long time compared to its peak level many years ago. And what did that do to US equities? Diddly squat, sir. If anything, lower dollar makes US co's overseas earnings look much better and helps them compete there (especially tech) while making US equities more attractive to foreign buyers. Below is a picture worth a thousand words. The only times dollar and US equities correlated on declines were during the recessions. Here is DXY over SPX and NDX since euro inception. Longer term really speaks for itself.
Replyhttps://www.tradingview.com/x/6RpwbPU5/
The pop in the yield curve in my opinion is mostly just noise. It's part of why Financials popped a bit today as well despite underperforming in the face of the yield curve flattening.
ReplyI think it's relevant to point out that a head and shoulders set up is starting to form on NDX. Still a ways off from any type of confirmation, but a good drop tomorrow would further the case there. SPX bounced off what looks like the top trendline of a wedge after an obvious reversal candlestick yesterday.
@LB, I would note that high yield also turned around today after a pretty good run back from its recent lows. HY spreads are very low right now, seems like a good opportunity to me. I agree 100% about your thoughts on how reminiscent this is of the pre-feb run up into tech earnings... I was actually thinking the exact same thing before you even mentioned that.
@IPA / Others. I'm not sure what or when the dollar will pop, but I do agree that if the dollar pops, it'll be the flame that ignites (or perhaps confirms) full on risk-off sentiment. I think the scary thing is that there are so many bets against the dollar right now due to inflation fears. There is record short treasuries right now. There is record long euro. There is a record amount of EM debt that is dependent on a cheap dollar that will buckle if the exchange rate shoots too high. A lot of the current imbalances in China that I've touched on a bit here will be blown out by a high price dollar.
@Cbus, well, that was some "noise", look at homebuilders today, beaten senseless. I saw all kinds of clueless punters yap about NVR missing slightly on the top line, but they are so out of the loop on this one. As the matter of fact, the stock ended up closing higher. NVR is in the midst of going after a lower price market segment as they shift to condos and more dense PUDs due to land scarcity.
ReplyIn any case, I think it was all about the interest rates today for homebuilders. Look at KBH. It was murdered on 1.8 X daily volume. On the last earnings call CEO said he ain't worried about the rates. Maybe the market is telling him he should be.
@IPA, the dollar was in a multi year bull market until the beginning of 2017 (not just DXY, think of EM too). Since then it reversed course and in macro time frames I think we are in 3rd innings of the dollar bear. Think how many corporates got stopped out of running structural USD shorts in 14-17, they don't need to buy USD anymore. USD yields going up are irrelevant, they've not made one difference up till now. They were irrelevant back in 05-08. Also, the whole market believes risk off, buy usd, that aint always going to be the case - particularly if the risk off is centered in the US. In 15-16 many EMs in USD terms got ludicrously crushed, in some cases worse than 09 but slower, now maybe that happens for the US now. We have all the ridiculous excesses, as well as waning power geopolitically
ReplyAs far as GBP is concerned, it made a tiny new high, failed, will consolidate and then likely to head north again.
so I don't mean the US goes back to 09 or anything tin foil like that. I'm just saying from a non US perspective, the peak to trough in USD assets may be surprisingly high when all is said and done, could actually compare to 09 percentage wise given what happened with the USD back then
Reply@Unknown, corporates are going to be net buyers of USD due to repatriation. Around $400B of green paper is coming back to US, by some estimates.
ReplyYields will make a difference once 3% is broken on TNX. Let's remember that some central banks are still much looser, and we saw BoC example earlier today. CAD took it on the chin.
So let's look at your thesis of dollar weakness derailing US equities and take a broader view of the dollar basket, not just DXY. Below is the trade weighted dollar index over SPX. As you correctly pointed out, it has peaked in 2017. But has it affected SPX? Not one bit. Furthermore, I zoomed out to the 2009 just to see if that played a serious role. It did, but completely in the opposite way you pointed out. I continie to believe that weaker dollar is a positive for US stocks in a long term. And I am definitely not saying risk off = higher dollar at all. As the matter of fact, after the 3% is broken on TNX, people may switch to the view of the strong dollar = strong economy vs weaker ones and that's why the buck will rise. I get the whole dynamic of higher rates choking growth, but I think we are not there yet, at least not in US. Now, I don't know how to incorporate "maybe" into my trading, so I am going to continue with the thesis until it is broken.
https://fred.stlouisfed.org/graph/fredgraph.png?g=jw7i
Hot take, but I wouldn't be surprised if the 10 year yield never breaks 3%.
ReplyYes inflation is at least somewhat real, but it's also somewhat overblown and narrative driven as well. CPI hasn't been that bad if we're being honest with ourselves, and if you look worldwide, CPI has been disappointing if anything. Inflation right now is predominantly oil prices, which are obviously running higher, but I still don't think will stay at their current levels. OPEC oil cuts will come off in the latter half of the year, and there is zero reason why we won't see an abrupt uptick in supply once again which prevents oil prices from ever becoming what we saw around 2007-2008.
Beyond that, the worldwide industrial economy is slowing. That is a fact based on worldwide data. That will also contribute to the dampening of oil prices. Especially if China continues to slow down, there will be a major drop in demand for oil. So if oil slows down and the worldwide economy slows down, I tend to believe we will whipsaw from a narrative of inflation to a narrative of deflation really quick this time around. If the dollar rises at any point, that will likely coincide or be the cause of the whipsaw. As most here know, a rising dollar means cheaper oil prices, lower bond yields, worse performing emerging markets, worse junk bonds, etc etc. That = deflationary.
There are a lot of people who are starting to doubt some of the inflationist ideals, or at the very minimum, they are more of a stagflationist mindset (which is probably closer to the reality in a late-cycle economy before transitioning to deflation). I think this bid for safety and a realization of the stage we're at in given the current the credit cycle will keep long dated treasuries low, while the shorter end of the curve will be cornered into rising due to fundamental factors.
I think the markets already showed their hands when the yields approached 3%. We clearly saw they didn't like this, and once that occurred, the flight to safety quickly "sloshed" yields from one side to the other. I think any time we start to get close to 3% we will simply see a repeat of what happened where rising yields destabilize the markets, forcing a transition into long-dated treasuries in a bid to safety. This will effectively keep the longer term treasuries below 3%, while the shorter duration will rise from other factors.
I think the inflation narrative is right on a long-term basis. But I also think people are getting their timing off here. Inflation definitely has the long term setup to be problematic, but I think in the 1-2 year term, there are much more deflationary factors at play that will come into effect before we start to see inflation truly become a big issue.
With that said, i'm shooting from my hip here to a degree, and i'm definitely not a source of expertise on any of this.
Quick technical thoughts...
ReplyEuro is hitting an aforementioned 122-pip broken channel extension as I type, going lower still, imho. Dollar is definitely waking up, guys. All DXY components are crumbling for their own individual reasons, but mostly econodata is missing expectations (CAD again today). I have made enough comments on the issue, going quiet about it. Full position is on.
SPX buy zone comes in between 2670 (horizontal breakout backtest) and 2678 (4/16 gap fill). If that zone gives, there are more gaps below to fill: 2656, 2642, 2613, 2604. I expect 2670-78 area to hold.
A surprisingly volatile op ex day. Rates higher, equities lower. We'll be hearing about the woes of Risk Parity Punters like Dalio again, no doubt. Good thing too, he was becoming annoying and has made gradually made Westport uninhabitable.
ReplyTechnicals update: Prior support at SPX 50 day moving average broke down on a daily and weekly closing basis. SPX 2687 now serves as resistance. New support: IPA's SPX 2670 is hanging on by its fingernails, then there is the intraday low 2660, the 20 day at 2645 and the 200 day at SPX 2605, which would fill all the gaps IPA mentioned. We are of the opinion that this market has an appointment with the 200 day and perhaps the lower Bollinger band before the middle of May.
Not a lot of fear out there right now, still a lot of dip-buying bargain-hunting sentiment. As for next week, it's not clear - a couple of sideways trading days for equities before renewed weakness is our best guess. AAPL earnings report on May 1st continues to be an albatross for this market. Ultra large cap stocks can do that to an index.
After three days of a neck-snapping steepener we expect the stealth flattener to resume before long. The summer doldrums will be here in a couple of months and that usually brings lower rates (except for 2013 Taper Tantrum).
Generally concur with @Cbus thoughts on yields, oil and inflation/deflation. It does get confusing when the transition approaches between weaker/stronger dollar and inflation/deflation. Most of us agree, but it's all about the timing, innit.
Obviously we had a decent day, scaled back positions and took profits.
"Not a lot of fear out there right now, still a lot of dip-buying bargain-hunting sentiment."
ReplyNote the corporate buyback bid is back. As you mentioned earlier, the run into tech earnings week is almost the exact same scenario as we had late January. I really think the buybacks are playing a big role here in sedating the markets.
-Treasury yields rising towards 2.95% on the 10 year
-Low volume low volatility rise (at least before the recent drop right now, which may be frontrunning based on what happened last january)
-Lots of selling the news on ER's
-Bonds, equities, and gold all performing poorly at the same time during dips
-Yield sensitive assets doing poorly based on rising rates
Not saying it'll be quite the same, but it does feel at least a little bit like deja vu from Late January right now.
On a side note, continuing onto my theme from previous comments, China once again can't maintain a steady gain even with the government doing some intervention right now. SHCOMP, HSI, and other Chinese indexes were extremely tightly correlated to US and international markets, but the last 1-2 weeks, that correlation has diverged greatly, dropping even when US markets were rebounding. SHCOMP is down 17% from its January high after dropping another 1.47% last night... I don't think it's a major coincidence this started the same week that the HKD Peg started to get hit.
"When Federal Reserve officials gathered last month for Jerome Powell’s first meeting as central bank chairman, not a single official among 15 saw a downside risk to inflation."
Replyfrom WSJ 4/15/18
@LB, I am of an opinion that AAPL has to hold 50 week ma (coinciding with 200 day ma, essentially right here) or it will plunge to 100 wma which is @ 140. That would be a gut check for the market. It ain't looking good because current weekly AAPL chart resembles mid-summer of 2015 - five months of sideways trading range which culminated in a cratering move from Jul thru Aug. What was the AAPL worry back then? You guessed it - disappointing iPhone sales.
ReplyMore importantly, players are worried about chip suppliers and what AAPL weakness may do to their sales. I think one needs to read a story below to understand how complicated the things are getting and how important it is to know where in the cycle the chips are right now. I look at NVDA chart today (virtually unch on a bloodbath day in chips) and I agree that this may be a temporary blip. But it could still hurt the market in the meantime. SOX took a dive back in 2015 on AAPL weakness. While in hindsight it was all a big opportunity to buy, it surely didn't feel like one at that moment, I bet.
https://www.barrons.com/articles/apple-clouds-asml-earnings-forecast-1523648317
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ReplyGood discussion on China and current markets.
ReplyI have a question: if I want to short HK market in the US, what are the available instruments for a retail trader? Thank you all.
@zh jin, EWH and FHK.
ReplyDollar broke out of trendline this morning. I'll be watching this closely.
ReplyIndia 5 OIS swap spikes 15 bps, a 3 standard deviations move ...
ReplyDollar shortage anyone?
ReplyDollar breaking out, 10 yr rate bounces off 3% mark.... I bought some January puts on Oil right now. I may be a bit early here, and definitely not married to the position, but I feel like it's the right time to do this.
ReplyGundlach is pitching XOP at Sohn. Am I even allowed to mention his name here? LOL
ReplyAnyway, he said it would outperform SPX going into a recession. I agree with him on XOP (my trade of the year), but I would not want to own any stocks going into a recession. If I smell one I am out.
@IPA, so you're long both the dollar and oil basically? What is your timing for each of these. They kind of seem to go against each other.
ReplyNope, long dollar and XOP. It's a play on US shale. Even as oil price goes down US shale can still go strong, especially if OPEC continues to curtail its production. Not long oil, actually think WTI is at the top of the range here $58 - 68.
ReplyAh okay, gotcha. Missed that nuance.
ReplySome humor from the Sohn Conference: Lin Ran, who runs Half Sky Capital, pitched GrubHub Inc. She said GrubHub averages $30 per order and earns 15 percent of each order, as spending growth at restaurants is outpacing spending at grocery stores.
Reply"I like to call this chart 'Millennials can't cook," Ran said, to laughter.
Millennials, a term for those born between 1981 and 1996, are expected to become the largest generation in the United States in 2019, according to estimates from Pew Research.
https://www.compuserve.com/news/story/0002/20180423/KBN1HU2GI_2
Jamie Dimon last week: "We will eventually have another recession. I do not know what will cause it. I don't think it's going to happen this year and maybe not early next year. There are too many signs of growth. The rest of the world is growing faster. The tax reform is helping. Regulatory reform is helping. Wages are going up. More people are coming back into the workforce. Housing is in short supply. Household formation is going up. Everything you look at is pretty good."
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