With the market in quiet mode before New Year's, enjoy this little musical interlude, courtesy of frequent commenter Leftback. Look out for some fresh substantive content from some new contributors early in 2017...
"It might seem crazy what I'm about to say
King Donald's here, bears can take a break
He's a hot air balloon that could go to space
With the spoos, like I don't care baby by the way"
"Because I'm happy
clap along if you're long, like the Spoos without a roof..
Because I'm happy
clap along if you think, reflation is the truth
Because I'm happy
clap along if you say, the Dow is going to 20k
Because I'm happy
clap along if you feel, that risk has left and gone away
Here come old Yellen, talking this and that, yeah
Well give me all your hikes, and don't hold it back, yeah
Well I should probably warn you that the market's fine, yeah
No need to short, don't waste your time
"Because I'm happy
clap along if you're long, like the Spoos without a roof..
Because I'm happy
clap along if you think, reflation is the truth
Because I'm happy
clap along if you say, the Dow is going to 20k
Because I'm happy
clap along if you feel, that risk has left and gone away
Bring me down
Can't nothing.
Bring me down
The Dollar's too high
Bring me down
Can't nothing.
Bring me down
I said (let me tell you now)
Bring me down
Can't nothing.
Bring me down
The Dollar's too high
Bring me down
Can't nothing
Bring me down
"It might seem crazy what I'm about to say
King Donald's here, bears can take a break
He's a hot air balloon that could go to space
With the spoos, like I don't care baby by the way"
"Because I'm happy
clap along if you're long, like the Spoos without a roof..
Because I'm happy
clap along if you think, reflation is the truth
Because I'm happy
clap along if you say, the Dow is going to 20k
Because I'm happy
clap along if you feel, that risk has left and gone away
Here come old Yellen, talking this and that, yeah
Well give me all your hikes, and don't hold it back, yeah
Well I should probably warn you that the market's fine, yeah
No need to short, don't waste your time
"Because I'm happy
clap along if you're long, like the Spoos without a roof..
Because I'm happy
clap along if you think, reflation is the truth
Because I'm happy
clap along if you say, the Dow is going to 20k
Because I'm happy
clap along if you feel, that risk has left and gone away
Bring me down
Can't nothing.
Bring me down
The Dollar's too high
Bring me down
Can't nothing.
Bring me down
I said (let me tell you now)
Bring me down
Can't nothing.
Bring me down
The Dollar's too high
Bring me down
Can't nothing
Bring me down
63 comments
Click here for commentsfollowed by the best market advice ever given by a rockstar:
Replyhttps://www.youtube.com/watch?v=_Son_p6sPeI
https://www.bloomberg.com/news/articles/2016-12-29/ten-macro-issues-for-investors-to-mull-in-2017-cameron-crise
Reply@anon 1:22. Thanks for that ;)
ReplyCurrent global macro problems have one root cause: excessive debt, brought about by a failure of the banking system (fractional reserve banking, supported by the lender of last resort - central banks).
ReplyTo summarize: Central banks will always provide cheap funding, so banks take excessive risk, so markets have bubbles, so eventually implode ruining us all.
Mervyn King (ex head of the BoE) recognizes this, and provides the solution: abolish fractional reserve banking and central banks. Make all banks hold sufficient liquid assets to back 100 percent of their deposits. Problem solved.
I encourage you all to read this. This is the only sensible future of banking, and thus markets.
http://www.zerohedge.com/news/2016-12-29/central-bankers-are-losing-faith-their-own-alchemy
February 8th: buy
Replyhttps://www.bloomberg.com/news/articles/2016-02-09/the-20-billion-manager-who-won-after-the-crisis-is-buying-again
December 18th: sell
https://www.bloomberg.com/news/articles/2016-12-18/a-55-billion-manager-who-bought-at-market-low-returns-to-cash
Nico, I always thought this was the mantra of stock purchases?
Replyhttps://www.youtube.com/watch?v=hOMvs_1UFCk
@Nico - those two links say it all - this bloke's idea of 100% caution to be in 15% cash and his metric for all out greed is 13% cash - now imagine 99.9% of the investing community acting the way this guy does and you get some appreciation for how moves in equities are overwhelmingly the result of marginal decisions from the long only types.
ReplySpeaking of whom, wheres our old friend AI this days? Any strong opinions here mate?
A happy and prosperous New Year to all.
ReplyHolding longs vs euro in SEK, NOK, CHF. Just put on latter last night. SNB has been intervening to hold the 1.07 level, but I wouldn't be surprised if they let CHF go a bit lower when flows/pressures pick up in January. SEK is just a regime shift bet following the Riksbank meeting (that said, I just took profit on some of my position). Regime changed for NOK in the Sep meeting and right now looks cheap to real rates and oil.
Fun starts Jan 3. I think equities need two things to go higher from here: 1) no recession in the year ahead and 2) a rotation out of fixed income. I'll be watching the bond market in the first days of the New Year for clues on the latter. If we see a strong bid for bonds, I wouldn't want to be holding equities (I'm not).
Assuming no issuance today, 2016 total corp bond sales will clock in at $1.7T on the nose:
Reply2015 = $1.666T
2014 = $1.636T
2013 = $1.567T
China debt (public and private).
Reply2008: 155% of GDP
2017: 300% of GDP
Xi is full of hot air.
@ johno
ReplyLet's play a devil's advocate. Not bothered with oil at current levels to go long NOK, and oil correlates so much more than rates do with NOK? EURNOK is at the same levels it was in late-14 and mid-15 and brent was the same/few bucks lower, so not too obvious that it's cheap to oil. Rate cuts are no longer expected, so yields are up but is there much space to go up?
Why would SEK rise? Is it wise to talk about hikes in 2018 and 2019 when riksbank prices some possibility of further rate cuts in 2017 and just extended its QE? Is Riksbank happy with a trade surplus turning into a deficit?
Re CHF I think it's quite possible because Jordan at the latest press-conference was quite happy about stronger USD, so with higher USDcHF they can have EURCHF go lower.
Hi Eurokopek,
ReplyThanks for your feedback. Re NOK, I find real rate differentials have more explanatory power for EURNOK than nominal rates (I regress on the real rate differential and Brent and get a good fit going back to pre-GFC). NOK's real rates are lowest in G10, but as inflation falls back to target, real rates are picking up. Norway's economy is doing well, oil stabilized, there are financial stability concerns around low rates, and they have space to boost fiscal spending further (unlike RoW). As for upside to rates, I will note that Norway is the one G10 country that has seen inflation running above target despite a global deflationary backdrop -- if that backdrop becomes inflationary, it's not a stretch to see the NB forced into hiking.
Re SEK, it looks a bit cheap on regressions. Swedish rates are totally the wrong level as the economy has way outperformed the RoW post-GFC and is currently doing well. People are asking questions -- parliament is reviewing the mandate, and in the days before the last Riksbank meeting, the Fin Min, the FSA, and the NIER all questioned whether the timeframe for getting to target should be relaxed. And at the meeting, three members dissented hawkishly. The Riksbank let Paul Krugman bully them and now they've got another housing bubble. Thanks Paul Krugman!
Re CHF, yes, good point on USDCHF. Argument may also apply to SEK, though USD is small part of the KIX.
johno
Replyi'm glad you're not holding equities - i will repeat that market is never cute and never calls you on skype when it tops. Market has already topped and there are a couple of late 'Dow 20k' bulls trapped already. I would not be surprised to see US equities gap down on January 3rd to catch bulls offguard like last January.
they used to say market hates uncertainty and there has never been more uncertainty on all fronts. I will talk more of my book on the currency side saying that GBP is the right 'safe' haven in Europe vs. the political shock to come in France and later Germany. And do not get me started on Monte Paschi.. what a joke, what utter level of decept and incompetence.
happy réveillon to all
Nico G,
ReplyI am with you on the trade, but it is important to point out that calling a top prior to actually one being developed has handed my head to me on a platter in the past. While I established very small short positions in anticipation of the top, I need a little more conviction to aggressively add to them. So since we are all wishing each other a Happy New Year, I have a few wishes: I want to see a newer high on the equities on a lower volume and a lower high on the momentum indicators. I want to see non-confirmations and divergences which I can hang my hat on. Another scenario is a break of important support levels on a meaningful volume and I would short the backtest (retracement). Then I will definitely agree with you that the top is in. Again, my equity shorts are nascent and minuscule.
you wrote the perfect articulate treaty on why people are never short when market goes down.
Replynoone ever shorts before they get a clear 'go!' confirmation.
they don't short after because the lift has already gone down, too fast.
and they do not short any kiss back of 'important support levels broken on a meaningful volume' because market goes so deep when it breaks, that when the kissback happens it looks like the correction is already over, and the opportunity missed.
Second Nico
ReplyIt works both ways based on my recent experiences: I wait for a pullback to long then the market just keeps going up. And when I need the confirmation to short the market drops like a stone.
it is actually a bit easier on the way up, market takes more time to go up than to go down (just look at any graph), so you have more time to plan, and pretty much every old high broken on the way up is revisited (2100 being the last example on spoos)
Replythe V recoveries from all last corrections have made one thing sure: that anyone who misses the top will never try to short a kissback, which is why im 100% certain that the next bear market will be painful, bears actually help on the way down at some awkward point they are the only bid around when they cover
Nico G,
ReplyI am not trying to rain on your future parade. I have to respectfully disagree though, and not because one of us is right or wrong but simply because our trading styles differ. You are all in and think it is possibly the beginning of the next correction or a bear market, and I think it's time to look for tentative shorts and add on more sound conviction when one is given. I have no idea where the top is, and for that matter, neither do you. I like to scale in and out of my positions. I don't tell the market where to top, I am a flea on the elephant's back, the market will tell me where it topped and hopefully my trading plan would allow me to participate in the selloff. Notice how I did not call it a correction or bear market? We won't know it's a correction or a bear until many things confirm it and bear market prerequisites and conditions exist.
I never said I'll sell kissback, you did. I said I'll sell backtest (retracement). I would use the Fibonacci levels to scale into the positions. I realize that I may not get all of my scale-ins filled. I would use monthly and weekly charts for major level breaks and switch to daily, 4hr, and 1hr charts for precise entry levels. Nothing ever goes down or up without a retracement. It's a fact you can't deny. Will I miss the first 50-100 or so points on SPX? Probably... Will the market have twists and turns on the way down after that, especially if you are calling for a bear, which is a protracted downtrend with viscous rallies? I think so. Nothing ever goes perfect and traders miss the moves ALL the time. Those who say they sold the top and bought the bottom are either lucky or simply lie.
You said "people are never short when the market goes down" and "noone ever shorts before (I think you meant after) they get clear go confirmation". With all due respect, what specific confirmation do you have right now to call the top? If it's a hunch let God be with you, especially if you are all in. I really want you to make a million bucks on this trade, but if you are all in you are out of dry powder and have zero flexibility when the new high is reached before you can even cover your first target. Again, I don't want to argue with you on the style, just stating the facts. SPX is only 1.5% off of its high, hardly a reason to be doing cartwheels.
And now about people never having a chance to short a "kissback because the lift has already gone down too fast". Both bears of '00-'02 and '07-'09 had a break of important levels and a picture-perfect retest, and even a kissback. Look at charts and see for yourself. You are excited about your trade and may be too wound up in paying attention to the trees near by. Zoom out and witness the forest.
Good luck with your trade! I will join you in full force when and if it's time to do that.
Nico is gambling again. He may be right, or wrong, but his results will be due to luck only.
ReplyWhat worries me is that as Central Banks run out of suitable bonds for their asset purchases, or if equities are seen to be correcting, they will add those equities to their balance sheets causing yet another rally. Everyone will say it's unsustainable (as they have for the past 7 years) and once again we will watch another massive "unsustainable" rally in equities.
Remember also that S&P500 companies will repatriate $200bn+ of overseas cash in 2017, most of which will go into share buybacks, pumping the equities bubble even more.
ReplyNo the money had already been used by the companies for whatever goals: money is fungible, remember this.
ReplyThe only difference is that the government will get a tax check from companies when they repatriate.
Mauldin on Italy:
ReplyMonte dei Paschi has at least 36% of its loan portfolio in the nonperforming category. The Italians have raised €20 billion for a bank bailout fund, but there is serious doubt that will be enough to cover Monte dei Paschi alone. My friend George Friedman says Goldman Sachs estimates that successful recapitalization would require €38 billion, while a senior market analyst at London Capital Group suggests the number might be closer to €52 billion. And that is just one bank.
Saving Italian banks will take multiple hundreds of billions of euros, which Italy does not have, nor do they technically even have the legal right to unilaterally bail these banks out. They would have to utilize an ECB facility that does not now exist to get that much money, and such a measure would require German approval. By the way, individual Italian investors and savers have invested at least $200 billion in junior, well-subordinated debt that paid a higher yield than bank savings accounts do; and they were told the investment was safe. Think about what would happen if $1 trillion disappeared from the savings of retirees in the US, and then double that number and you’ll be getting close to what the equivalent impact would be. Think that’s politically possible?
Now about US equities
ReplyLast time Congress initiated a tax holiday in 2004, the top 15 repatriating companies brought in $150bn, did zero buy back and reduced work force by a total of 20,931. So much for stimulating the economy.
Let's not debate trading style here since everything is highly subjective.
To some, shorting a market without 'proper' 'signals' is gambling. Now, try to short an equity market once a bear market is confirmed 20% lower. What a joke. Most time when CNBC confirms a market has 'officially entered a bear market' it is the perfect time to BUY. To me anyone blindly chasing CBs and buybacks while ignoring valuations is gambling and feeding a bubble. Also anyone buying Spoos over 2200 while they try to imagine what Trump might or might not do, and when, is again blind, gambling.
You may call luck going all in when fading Brexit 'remain' euphoria in June and fading Clinton election euphoria. All in the same year. I call it something else. And i choose to short Trump euphoria using the same analysis. Last November i gave this board the perfect 2148 short entry before Election day. I believe market reached 2152, before reversing and reaching limit down. Call it luck, but it was something else.
If market goes to 2000 this month the post election punters will feel reckless, and stupid. To chase such a late stage after 8 years up, that's greed 100% based on hope. If market goes to 2400 instead, i won't feel stupid, i'll just wait, 2017 is going to be incredibly challenging and i wish everybody well. Anyone long here, and not nervous deserve to learn a little lesson.
Guys,
ReplyDid anybody see this eurousd piece in the FT few days back? I don't really feel qualified to assess its merits/strength of arguments that the Euro is a raging buy?
"Dollar will find buyers hard to find in 2017 - Financial Times
With the US Federal Reserve raising interest rates, and President Mario Draghi of the European Central Bank seemingly unable to escape his addiction to quantitative easing policy, many investors are questioning who wants to buy the euro. The answer is simple. The whole world is eager to buy the euro. The problem in 2017 is more likely to be finding anyone who wants to buy the US dollar.
https://www.ft.com/content/10e7bf02-c84a-11e6-8f29-9445cac8966f
Any thoughts on how convincing / unconvincing this thesis is for a possible medium term euro buy? I guess I was attracted to it because so contrary to the prevailing dollar narrative that run up will continue endlessly next year?
flash spike the other day a sign of things to come? Personally not really convinced by the Le Pen / German political risk scares, as if anything post brexit / trump political risk feels over priced in already at this point? Guessing the repatriation of corporate profits offshore is already more than fully priced into dollar now, but am not sure can anybody clarify?
One question though, I am not sure in fundamental terms how cheap the Euro looks right now as I don't know where to check this out: In fundamental purchasing power parity terms, REER terms, how is the Euro looking at this point v the dollar? I guess I am looking for a website that offers more sophisticated version of the big mac index going back, say, 50 years for every major currency pair, plotted against market exchange rates? (Am guessing this is probably avail on Bloomberg but I am not shelling out for this service at present...)
Nico 5.30
ReplyTotally agree
Nico 5:30
ReplyUtter rubbish.
Dax is up over 100 points, and all EU equity indexes are green with banks (inc Italian ones) leading the way. Once again you're wrong. Sorry.
@Mr Wong that article caught my attention as well - I tht the article was complete garbage and not worthy of being published in the FT - this guy could have summed up his thesis in one sentence - 'the current a/c is more important than the capital a/c' - that notion is 1) a rank assumption on his part, 2) highly questionable given movements in capital a/c happen at warp speeds and asset flows drive everything pertinent to the lives of investors and punters, and finally 3) completely at odds with 3 decades of history. Would Mr Donovan care to explain why the USD rallied 20% in q4 08 when the banks got decimated? Why couldn't chinese housewives and saudi princesses buying prada shoes stem that selloff? Simple - they are gnats on a whale compared to institutional flows trying to find a home in weeks.
ReplyNow, there are paths going forward that could lead to usd weakness and euro strength, so he could end up being right on his forecast, but his reasoning is nonsense.
98% of #bitcoin trading volume is in #China
Replyhttps://twitter.com/JohnLilic/status/814238428225216512
€ is currently a risk-off currency. An unwind of last year's trade, buy USDJPY correlated with equities, would lead to firmer EURUSD. However, the inevitable and ultimately unavoidable bailout of Monte Paschi and essentially the entire Italian banking system (see Nico above) will ultimately lead us to EURUSD parity, or below…
ReplyFor your reading pleasure on a slow day, an eloquent survey of the world as it stoops today. The forecasts for 2017 may take a bit more time to unfold but seem likely at some point in the not too distant future.
ReplyRossmorguy
http://kunstler.com/clusterfuck-nation/forecast-2017-wheels-finally-come-off/#more-'
Nico G,
ReplyI did not come to this board to take on the biggest cheerleaders of their positions (long or short), but simply to share trading ideas and to discuss the markets in a respectful way to others. But after calling my comment a joke, you leave me no choice but to rebut your five paragraph huff and puff narrative. This time I will not be as kind and won't wish you good luck on your trade. I also will wholeheartedly assume that you did not look at the charts I told you about and did not pay very close attention to what I was saying, and you instead decided to turn it into a rant against the Trump, CNBC, and all other euphoria of modern times. Has it ever occurred to you that I may be saying the same thing? Calm down and reread my posts!
We are all in utter amazement of your market predictions and precision trading might. Of course you shorted the highs on Brexit and US election and promptly covered the bottoms reached only hours after. No need to shout at every trader on this board who doubts it, even if ever so slightly. You go on endless rampages to defend your trades and proceed to cut heads off even respectful commenters to underscore your assumed 5% gain. Well, has it ever occurred to you that you may actually be the same "gambler" as the 12yo you are so eagerly teaching to live his life here? You "would not feel stupid and would just wait if market goes to 2400"? Are you actually trading or just waiting for a margin clerk to stop you out and forcefully liquidate your position?
Let's go with facts. You would have made roughly 5-6% on the US election and Brexit trades (respectively), providing you had GTC orders on both entries and exits. By the way, did you tell people here you covered? I am sorry it may have been lost in the maze of cheerleading messages. Please accept my apology in advance if you did. Anyway... You said yourself that you are short and everyone here assumes you were short and all in on Brexit. If 5-6% profit is all you are trying to target and you had no chance to cover Brexit equities "spoos" shorts at negative 6% target you would then be at a 7.5% loss at high and 6% loss as of right now.
Let's proceed... "Spoos" election trade is once again a 5% glorious short trade of just a few hours in the middle of the night with precise entries and, most importantly, the exits at most illiquid time of Trump's acceptance speech during which bid ask spreads blew out and I guess you covered the same bottom the 12yo bought as well, which makes both of you the biggest machos here, sorry to say. If you did not cover, you would be at 5.8% at high and 4.2% down currently on your US election short. Please enlighten us again if I am totally off on your trade and how it unfolded.
Responsible traders were glued to the TV screens and not the trading screens during Brexit and US election and our positions were small and nimble at times of great uncertainty and not all in and bigger than life! I am sorry, once again the "subjective trading style" comes to forth.
As you are going to wait on your never covering the next biggest short of your life (we assume once again at spoos above 2200) I would like to provide you with one fact that would leave your fellow traders chuckling. Your trade of a lifetime (with a presumed 5% profit target) is at a less than 1:1 reward to risk ratio and above 2400 it becomes so net negative and detrimental to your book ever so exponentially because you are already all in. When the margin clerk calls and suggests you cover or wire more funds into your account, you can try to tell him a five paragraph story of your life, but I think he would promptly proceed to trade you out at ask.
See what happens when you mock fellow traders who wish you good luck? Now, calm down, go back and look at those charts! SPX broke important levels, went down 20% from the top, retraced, kissed back (!), and proceeded to fall another 44% and 53% in '00-'02 and '07-'09 bears respectively. And no, I don't watch CNBC.
IPA - i think Nico's Brexit trade was in eurostoxx and more likely 10/11% as he covered on the opening auction. There was plenty of liquidity on eurex open and plenty of liquidity at the limit down lows of the Emini on Trump night (whatever about during the move down). I was there, trading away.12yr old, Carl Icahn etc were there, bid for size at the lows.
ReplyYou do have some valid points though.
Happy New Year.
ReplyDollar bid today, but so was duration. Curious. Probably too early to read much into it. Interesting that despite periphery debt getting bid, EURCHF is back down to 1.07. NB buying of NOK stepped up. Sweden PMI at 60.1 while repo rate is -0.50% and QE just extended -- what's wrong with that picture?
Article of the day (for me) was China Business News reporting that Chinese citizens aren't allowed to buy "properties, life insurance or other dividend-paying insurance products" with FX conversions under their annual quota. Violators to be subjected to anti-money-laundering investigation. If enforced (huge if), it's a big deal for housing markets in NZ, Australia, Canada, no? Any views?
IPA -
Replyi think you may be missing the point of Nico's value. his willingness to share his trading process, interpretation of history, and risk management is why he is respected (at least by me).
why nitpick about the veracity of Nico catching tops and bottoms? surely you are not dependent on him updating his trade entrance/exits to us.
Nico highlights important points that all traders should be thinking about, macro or not - there's a lot of value in that.
Agree with forgot2hedge. I always read his stuff although i dont always agree. Its not like he has been perma screaming short spoox either.
ReplyYou have valid points but its not as all traders post all their trades here in real time for validation so everyone takes a grain of salt when reading here anyway. Value here is in ideas and perspectives provided. Not just do abc to make $$$.
I do doubt some of Nicos bear views but thats what makes a market.
forgot2hedge and Anon 2:24 am,
ReplyThe man took jabs at me and I threw a few punches back in defense. No disrespect or hard feelings towards him. He used words like "noone" and "never" as he preached to a professional audience. I agree that my reply asked for details he will not and may not be able to provide. I don't need them. Simply asking for respect to other posters here, especially if they are civil and kind.
Equity indexes already up 0.5% to 1% today before the european cash markets open. Once again, Nico badly, badly wrong.
ReplyIPA
Replyread my post again I was commenting on anon 9:41 who called me a gambler, NOT about YOU so am not sure why you had to take it so personally and write a novel
This job is the hardest in the world, and the loneliest in the world so if you don't even celebrate when market gives you the two best trades of your life, to compensate an infinity of miserable other times, you might as well do something else.
I printed the trade ticket at 2030.80 'election overnight sensation' because i had never been short before a limit down i looked at 2029 for a split second thinking it was 2129. If you leave me an email I am happy to send you all the documents you need to put your mind at rest and stop the paranoia
The morning of Brexit i posted that i got filled at auction, much deeper than i thought. Eurostoxx opened 12% down and i had never seen such atrocious liquidation since that future contract exists. (I had seen -13% once, but on Nasdaq in 2000 but the loss developed throughout the day, no discontinuity)
The way i see it, such deep liquidation can only be possible with record complacency/record margin and it renders the whole market so vulnerable. I would like to hope that we will never have a 9/11 again, but we will, and if people have been playing on Spoos and Dax futures like dicks, we will see 20% liquidations and a day like this can make you lose 5 or 8 years of profit.
anon 11:32
there is no right or wrong i am posting facts on Italian banks. I don't give a damm how they trade, they could dead cat bounce 100 or 200% after what they have lost. I am just reminding some that those banks are bankrupt and that it is only a political play at this point. Trade the bounce with tight stops.
@Jenny, I sent a mail to lexieloancompany@yahoo.com asking for a loan, but haven't got a reply yet.... could you please help me figure out what I need to change... maybe it's the email address I used, nigerianprince@gmail.com...
ReplyNico G,
ReplyFair enough. No proof of your trades is needed. 12yo may ask you for one though. Let's consider the issue dismissed.
@IPA - I can confirm Nico's trades are real - I was on the other side of them and they have accounted for most of my +200% 2016 return ;)
ReplySad to hear you are not a HFM anymore - even after an impressive +200% return ;)
ReplyInteresting start to the 1st real trading day. Fantastic data, but since NY got in, rates can't selloff more. And now USDJPY and the 10Y back to pre-ISM/construction data level. Anyone want to interpret that?
Reply@ koolbong
ReplySimple mistake to make ,you should have used 12yoHFM@200%.com :)
So guys come into the office in London, jam on USDJPY. Hits the Dec 15 high post-ISM. Rejected. Double top. Meanwhile US rates can't selloff on great #s and are now lower than before said #s. And regressed on US 10Y rates since mid-Nov, USDJPY should be 150 pips lower anyway. What does London macro guy do?
ReplyDon't know about London... I would like to sell retail, home builders and transports on this report. Already very slightly short IYT, will press it hard when I see a better signal. But, XRT and XHB are showing relative weakness, and head & shoulders patterns on both give me a clear entry & stop levels I can live with.
ReplyOn another note this morning... It's an absolute pukefest in Nat Gas futes. I guess the Artftic cold blast is dissipating fast. What's more interesting is the producers' willingness to sell into the rally hard (per COT), but they have been on the wrong side from mid Nov. I want to use this opportunity to pick up some longs at $3 level (bottom of the uptrend channel), another 10% from here. At today's rate it should be there tomorrow.
IPA - hear u on IYT - thinking 145-150 target based on gaps and 50 DMA.
ReplyThe one I can't figure out today is energy - curious flight of fancy away from its usual indicators.
washedup,
ReplyTotally agree with your targets. As Dow Theory folks are rejoicing, I can't help but to stare at an eerie resemblance to '08 and especially '99 double tops. I am salivating, drooling all over myself just to sit back and wait for the monthly doji wick to be half filled at least (167ish) coinciding with the left side top. Handcuffs on, becoming the biggest cheerleader of it in the meantime :)
hello friends keep in mind that whoever sat on profits last month/year waiting for capital gain tax cut to be enacted in 2017 is more than happier to sell today at sustained levels, Trump helps the rich getting richer
ReplyCan we consider today's copper's failure to close positive after glorious Chinese mfg #s a clear go for a trip back to the breakout at 2.30?? I think so. Moreover, price got a strong rejection at a laminate of 2.55 horizontal backtest and daily mid BB. I am adding to my earlier short on this conviction and looking for a trip to 2.30 with 1/3 scaleouts at 2.39 and 2.34 on March contract.
Reply@johno:
ReplyRe your New Year's comment on dollar and duration... more of the same? Certainly the case for favorable relative valuation of equities vs. UST yield has become (more) questionable, and in my very small corner of the world the concern over Trump realpolitik post Jan 20 has begun to overshadow the reflation trade.
Doesn't explain the 2017 action so far, although I do think Nico has a point with tax maneuvering.
I'm looking for a turn lower still. But no rush. http://polemics-pains.blogspot.co.uk/2017/01/with-consensus-comes-conceit.html
ReplyCovered my little hit-and-run in USDJPY. Flat now and wondering at the 10Y. My bias is to short and 124'12 seems a good stop level ... but I never interpreted the Fed as bearishly as the market and the minutes come out tomorrow. Today's price action wasn't encouraging either. Joined the party in USDMXN after the Ford announcement, small. Feels like Trump is going to put some stick about, especially with these trade-related appointments, and Mexico is the easiest target.
Reply@ IPA, I don't know. Analysts have changed their tune on the supply-demand balance in copper bullishly, we just had great PMIs all over the world, and March copper is sitting at what's been support for the past two weeks. And then potential Chinese asset allocation into it clouds things too. I don't have conviction one way or other.
johno,
ReplyToday's reversal was like icing on a cake. Been waiting for that backtest to see how price reacts. It was rudely rejected :)
On supply-demand balance. LME stocks went up steadily in Dec (see link below) and a breakout above 350kt would send everyone and their grandmother for the exits. Also, Chinese imports are down, the housing controls are restricting further uptick in demand, and the Trump's bridges to nowhere are not under construction yet. I hear you on PMIs, but if it is stuck and can't get above 2.55 on all that data, what would push it higher?
http://www.infomine.com/investment/warehouse-levels/copper/5-year/
Nikkei is up 300 points, & EU indexes also opened up. Nico once again wrong.
Replyshut the fuck up unless you want to honor this board with a bit more homework, or input
ReplyCame across a serie of tweets from Harald Malmgren today, a former presidential adviser to JFK, LBJ, Nixon, Ford and US Senate Finance. The man is 81 year old. In descending order by time:
His [Ben Bernanke] continuing denial that QE wrought damage suggests it is he who cannot handle the truth.
Correlation of 1 across all asset classes combined with high leverage & narrow exits means catastrophically fast implosion, sooner or later.
What i am trying to point out is that markets and even the Fed are acting on unreliable,overoptimistic official data (aka fake news).
World trade contracting,growth stalling, but CNBC advertisers, Bloomberg customers & political leaders don't want downbeat news. Market illusions.
BEA uses own unique, low deflator (never CPI) to get higher inflation adjusted GDP growth rate, higher consumer spending, hiding feeble real growth.
Most jobs data cherry picked, manipulated, guessed. Declining payroll tax deductions published every day ignored. Job gains illusion.
Occasional glimpses of real economic news reminds how misleading is WH economic recovery spin and its adoption in the form of MSM fake news.
Financial leverage higher now than 2008, systemic risk greater, most jobs created part time, median income down, debt multiple, wealth gap bigger, etc.
On that we seem to agree. A phony recovery reliant on contrived fake data transmitted as fake news, now becoming "post truth".
At this stage of my life you get my views unadulterated with hidden ambitions.
https://twitter.com/Halsrethink
ReplyNico - the internet is populated with doom-mongers, who once worked with senior politicians and yet have been consistently wrong. However this has no bearing on market behavior. You have taken a punt short, been proved wrong by market action and are now looking for data to support your erroneous view. Classic behavioral mistakes.
ReplyNow I know that any move in Gold can be vackfitted into any meme you are peddling but if equities are to scream higher, yields to do likewise and usd to boom then the 'it's an inflation hedge' is not really enough to prevent Gold from falling further. But it s turning back up.
ReplyI'm with Noco. The up rade appears to be mostly supported by ' because see it's gone up nur nurdee nur' arguments than anything new.
Shock horror, we printed trillions of money and now we have inflation creeping back into the economy. Who woulda thunk it? Anyway, at least we can inflate away the debt, then get Krugman or some other retard to tell everyone that the loss of all their wealth is good for them.
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