tag:blogger.com,1999:blog-34323687.post5009034972790239855..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Hi ho silverMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger125125tag:blogger.com,1999:blog-34323687.post-14075992728450009492016-04-24T13:18:34.083+01:002016-04-24T13:18:34.083+01:00Next week should be a corker with Q1 GDP and FOMC....Next week should be a corker with Q1 GDP and FOMC. I may be barking up the wrong tree completely, but I am thinking there is a not insignificant chance of <br />a) disappointing Q1 GDP<br />b) further Fed dovishness<br /><br />I think the GDP growth issue is more finely balanced than is currently given credit for. We have negative IP and retail sales on one side and positive jobs (which tend to lag) on the other. So given this balance, the Fed may decide that the Dollar will make a difference to the recession risk in the next 9 months and Ms Yellen may do her best to kill Bucky. It depends on whether the Fed thinks there is sneaky poo H2 recession risk out there. <br /><br />It's nothing that I would lay a trade on currently but it does stop me from going long the dollar or taking more than a small short Spoos position here. I think the odds are that we will have a further dollar correction and higher highs in Spoos if a) and b) pan out. But that will be great levels to be short Spoos from and long dollars come early May. If a) and b) do not occur, then the dollar may have seen a bottom and Spoos may have seen the top.Boogernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71327163401221415642016-04-24T08:38:17.090+01:002016-04-24T08:38:17.090+01:00Oh and on this Anon;
"What I do not unders...Oh and on this Anon; <br /><br /><br />"What I do not understand is your idea (4), is it because that insurance/financials have already become really dirty cheap compared to their values. Or you think there is some long turn trend here improving their fundamentals?"<br /><br />In a nutshell, I would say banks are definitely in the CYCLICALLY "dirt cheap" camp, and should only be seen as such. Long-term I am more constructive on insurance. CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45242633145267904932016-04-24T08:36:48.455+01:002016-04-24T08:36:48.455+01:00Hmm, thanks for the comments Washedup, some object...Hmm, thanks for the comments Washedup, some objections on the banks/insurance call I see. I think the two have to be kept separate to be honest. Banks are a straight late cycle play based on relative undervaluation, and the fact that NIIMs will increase if/when long-rates rise. Beyond that, I can see why they would struggle. A couple of good ones out there perhaps, but I agree that it is a difficult, difficult "investment proposition" ... If they are indeed value traps, it has also has profound implications for "index huggers" who will be sitting with a lot of them. In fact, "beta" hasn't really got any meaning anymore I think given the underperformance of energy and financials who are instrumental in using the equity market for finance. <br /><br />On insurance; you need to look beyond their reserver/portfolio woes. I think insurance is an underrated product with huge room for innovation. Insurance firms with good core businesses are currently trading a discount due to them being lumped together with banks. That's unfair i think. CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-31729841505110714752016-04-24T03:05:06.235+01:002016-04-24T03:05:06.235+01:00Washed all I know is that 1800 held in a panicked ...Washed all I know is that 1800 held in a panicked market, and barring something untoward, I see no reason to revisit that level in the very near future. Earnings going forward will be against easier comps. At 12 months out consensus earnings are generally pretty accurate, unless there is an unexpected recession. Most of the stat people I respect put that at a low probability. So, if nothing goes bat-shit crazy the S&P is trading at about 15 times next years earnings. It's not a super cheap market, but it's not time to make some emotional major life altering short. The top of the range may be last years high or perhaps we move to a higher range. Life is short, and trying to bet on the unknowable will just make it shorter. My opinion is that conditions have been tighter than generally perceived, and Ms Yellen has both internal and external reasons to not raise short term rates until farther in the future. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6558313611095342262016-04-24T00:26:39.962+01:002016-04-24T00:26:39.962+01:00@anon - thx for your response - I was more trying ...@anon - thx for your response - I was more trying to understand since you seem to think (and I agree that the odds favor this) this is a range bound traders market, what you think that range is, so share if you care - as for the picking a top idea, I honestly don't know anyone who has done it precisely in any market, but they were large when a general breakdown began to occur and preserved powder so countertrend rallies didn't carry them out. I think the right idea is 'got in relatively early on a multi-year downtrend' with smart preservation of profits as opposed to 'picked a top'.<br />washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-52406798729172301862016-04-24T00:00:03.454+01:002016-04-24T00:00:03.454+01:00Washed by tactical short in something like Spoos I...Washed by tactical short in something like Spoos I meant a short term swing trade, a punt based on short term conditions. By strategic short I meant Bruce's idea of picking a " grand top" to make lots of money on the short side of a major index for a variety of reasons mostly found in main stream media and largely based on emotion. Just go back and look at BinT's list of things that he "knows" about the market. If you look at the people who have been incredibly successful at big shorts, they often short a very specific thing that they have extensive and/or exclusive knowledge about. They don't really call emotional tops or spend years warning of catastrophe a la J Hussman or A.Edwards. Those guys one time may be correct, but so is a stopped clock. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59093901945136831912016-04-23T19:36:22.015+01:002016-04-23T19:36:22.015+01:00@CV fully agree on 1), but you probably knew that....@CV fully agree on 1), but you probably knew that.<br /><br />On 2) trying to decide between whether its here and now, or wait for spoos to make a marginal new high to suck everyone in for the 'breakout' before going 100%.<br /><br />On 3) again I agree, but have a feeling people kind of 'expect' a hot summer because of what happened under similar circumstances in 2012 - I think its a 1.50-2.50 range through summer anyway, but then I see a ton of upside. <br /><br />On 4) I disagree completely - financials are like that chick with the python in from dusk till dawn - value trap written all over it - if they lose money its theirs, if they make money the man will find a way to take it away - ROE's suck and will continue to do so - as for insurance - ZIRP means they can only join asset returns through leverage, and the liability side is as unpredictable as it was - I actually think BRKA is a decent short for the next few years, as an aside.<br /><br />@anon 6:44 - on 'Tactical shorts are one thing, but a strategic short of a range bound market is entirely something else.,', curious when you would put on such a tactical short, and why you don't think now is a good time.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70915505843627975642016-04-23T18:44:06.331+01:002016-04-23T18:44:06.331+01:00Abbie,
There is a Brookings April 14th video of a ...Abbie,<br />There is a Brookings April 14th video of a panel discussion on China and the global economy followed by another with Yi Gang and Ben Bernanke. The discussion touches on central bank co-ordination, which you have posted on, as well as issues central to domestic China reforms. Bruce, I seriously doubt that the herd has the band width for two hours of thoughtful discussion on challenges facing global economies as well as possible non-cataclysmic solutions by people who are actually informed. They are too busy shorting this market, because they don't "love it", and their primary focus is on making a lot of money, by following the "smart crowd" or the "smart money" instead of forming a balanced, nuanced personal view of where we are. Tactical shorts are one thing, but a strategic short of a range bound market is entirely something else.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88818560467894966452016-04-23T16:57:43.513+01:002016-04-23T16:57:43.513+01:00@CV,
I am on the same boat about your idea (1), a...@CV,<br /><br />I am on the same boat about your idea (1), about to add more positions next week around FOMC. I have the similar view on your idea (2) and (3), but not right now.<br /><br />What I do not understand is your idea (4), is it because that insurance/financials have already become really dirty cheap compared to their values. Or you think there is some long turn trend here improving their fundamentals? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37943508340492565742016-04-23T13:13:31.701+01:002016-04-23T13:13:31.701+01:00http://www.bloomberg.com/news/articles/2016-04-22/...http://www.bloomberg.com/news/articles/2016-04-22/china-s-great-ball-of-money-is-rushing-into-commodities-futures<br /><br />“The great ball of China money is moving away from bonds and stocks to commodities," said Zhang Guoyu, a Shanghai-based analyst at Tebon Securities Co. “We’ve seen a lot of people opening accounts for commodities futures recently."<br /><br />...I don't visit here to see people pound on their little chests. I visit because of thoughtful investors or money managers who are genuine enough to share with me their reasons for why the markets are behaving as they do. I am one of the folks who don't love this market, think there is an opportunity to short and make a lot of money coming up, but until then, I have to invest with the herd.<br /><br />Those of you who take the time to explain why you are looking at the markets in the way you are, thanks again. You know who you are.Bruce in Tennesseenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58923453693027223142016-04-23T08:53:56.163+01:002016-04-23T08:53:56.163+01:00@Pol - I think it's about the delivery. The s...@Pol - I think it's about the delivery. The shorts aren't runnin around shouting "I'm short your house!" And want to reason their trades. Some bulls want to turn the trolling up to 11.<br /><br />Makes a bear feel superior. That's within this dome.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6828507443081786442016-04-23T08:32:10.508+01:002016-04-23T08:32:10.508+01:00I see that the theme of 'bulls are twelve yr o...I see that the theme of 'bulls are twelve yr olds, bears are clever reasoners" continues in this space. V interesting bias that persists everywhere. More here-><br /><br />http://polemics-pains.blogspot.co.uk/2016/03/its-not-bigger-and-its-not-cleverer-to.htmlPolemichttps://www.blogger.com/profile/05985506596290073453noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-44525279113063222882016-04-23T07:36:47.298+01:002016-04-23T07:36:47.298+01:00Starting to get a little worried about the up-trad...Starting to get a little worried about the up-trade too. <br /><br />Clearly, in hindsight, being able to catch the switch from deflation to "dovish" reflation has been the key, with EM, commodities etc rallying; I made good money on that. Next step in that sequence could be outperformance of financials as long-rates finally rise as they usually do late cycle. It all depends on how long Yellen can keep the rate hike in the bag. Or more specifically, how much milage does another round of Goldilocks have in this part of the cycle? Probably not much. <br /><br />I noticed that oil and stocks didn't behave last week. I.e. oil up, stocks down. This, I think, is because the market now realises that higher inflation might not be such a good idea if you are chasing the mana from helicopter money. I think a lot of correlations will break down soon, and a lot of both bearish and bullish investors sitting on the trades of "yesterday" will be caught out. <br /><br />Meanwhile the Brexit vote is hotting up too. But again, I wonder whether investors understand what they really "want" here. If the U.K. leaves the CBs will shower us with lower rates and QE for longer, so after the initial "oh shit" I think risk assets would fly. If they vote to stay in, though, the end-game is set I think for CBs to try to engineer a normalisation in dovish rhetoric. And they won't succeed, as per usual. <br /><br />For now, I have only very few medium/high conviction ideas.<br /><br />1) I think long-rates are going up (so far looking o.k. in bunds etc)<br />2) I think now is a great time to open some shorts in the U.S., and a I have done just that. <br />3) I have a sneaky feeling that natgas has made a very decisive long-term bottom. Call me crazy, but that is my view<br />4) Insurance/financials is the most attractive global equity sector. <br /><br /><br />CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15938700624985537722016-04-23T07:18:47.690+01:002016-04-23T07:18:47.690+01:00I would think anyone with any insight has already ...I would think anyone with any insight has already worked out that we are at the end of monetary illusion where policy in pulling forward future sales revenue no longer actually works to do that very well. What we have now is the game of musical chairs where each ineffectual central bank tries to pass the parcel to it's neighbours ,but the speed of the game has increased in tempo in that each pass brings less and less relief to their currency expectations.<br />We've already had the first backfire in Japan. When we get another such the pretence will be transparently over. Policy failure will be writ large for all to see. The conclusion of the game will be that all will be left at the mercy of what they can do with their domestic markets. Export policy gains will have gone.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-57398903577112443232016-04-23T07:10:53.355+01:002016-04-23T07:10:53.355+01:00Anon,
"Not sure what that says about the mark...Anon,<br />"Not sure what that says about the markets, or everyone else. lol."<br />The question invites the question "what do you want it to mean". Now you know all you need to know about market behaviour.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26441828300009804732016-04-22T23:37:56.100+01:002016-04-22T23:37:56.100+01:00I never meant to cause you any sorrow
I never mean...<i>I never meant to cause you any sorrow<br />I never meant to cause you any pain<br />I only wanted to see you borrow<br />I only wanted to see you<br />Laughing with the stock market gains<br /><br />Stock market gains, stock market gains<br />Stock market gains, stock market gains<br />Stock market gains, stock market gains<br />I only wanted to see you<br />Bathing in the stock market gains<br /><br />I never wanted to be your weekend banker<br />I only wanted to be some kind of fraud<br />Baby, I could always steal returns from a saver<br />It's such a shame our friendship had to end<br /><br />Stock market gains, stock market gains<br />Stock market gains, stock market gains<br />Stock market gains, stock market gains<br />I only wanted to see the real economy<br />Underneath the stock market gains<br /><br />Honey, I know, I know<br />I know times are changing<br />It's time we all raise rates<br />For something new, that means the end to easy money<br />You say you want a leader<br />But you can't seem to make up your mind<br />I think you better buy it<br />And let me guide you to the stock market gains<br /><br />Stock market gains, stock market gains<br />Stock market gains, stock market gains<br />If you know what I'm singing about up here<br />C'mon, raise your debt<br />Stock market gains, stock market gains<br />I only want to see you<br />Only want to see you<br />In the stock market gains</i><br /><br />RIP PNR.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25041258161744914252016-04-22T23:30:37.625+01:002016-04-22T23:30:37.625+01:00"The world has not ended, equities are near a..."The world has not ended, equities are near all time high, bond yield is crazily low, economic data looks stable/good everywhere, oil almost double from its low"<br /><br />Pretty much what the 12-year old SPY buying anons here were predicting many weeks ago. Not sure what that says about the markets, or everyone else. lol.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-85308949812161990972016-04-22T21:48:47.726+01:002016-04-22T21:48:47.726+01:00It is an unusually quiet trading day. QQQ boringly...It is an unusually quiet trading day. QQQ boringly dropped 1%. With BOJ rumor, others move very little. <br /><br />Now we will have FOMC and BOJ next week, with the high expectation that BOJ will try again after the failed attempt in January. FOMC, on the other hand, is expected to do nothing and stay ultra dovish on lips. And there is also RBNZ, which probably will also do nothing after the last cut.<br /><br />Combined these three events, the most likely trade I can think of is to long USD, short Treasure bonds. The April FOMC is going to pass and the June FOMC is coming. The world has not ended, equities are near all time high, bond yield is crazily low, economic data looks stable/good everywhere, oil almost double from its low, and the June FOMC has a press conference on schedule! Surely the probability of a rate hike can only go up, until Yellen gives another speech, which probably won't happen for a while. <br /><br />BTW, I did not see many "sell in May" mentioned in the news. Anybody has the same feeling? Does it mean that fund managers are working overtime and chasing the benchmark this summer?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-67877800473995096052016-04-22T21:27:28.488+01:002016-04-22T21:27:28.488+01:00Have to say it was one of the more confusing/frust...Have to say it was one of the more confusing/frustrating weeks of trading I've encountered in a long time. Normally, I have a decent grasp of what is going on, even if I want the opposite trade. <br /><br />@Pol - i think i went through the majority of your trade rules this week!<br /><br />Weekend wind down needed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23926330715095752202016-04-22T21:08:15.218+01:002016-04-22T21:08:15.218+01:00@Indexer:
Thanks for the advice dude. Should I ...@Indexer:<br /><br />Thanks for the advice dude. Should I sell all my positions and buy calls in SPY or would it be safer to buy calls in those 3X etfs? Or would it be better to sell naked puts against those 3X etfs and use the funds to buy calls? I also have a HELOC that I could use. Would that help?<br /><br />I'm so excited. I wonder if I should start discussing with NetJets now or wait until the summer. I've got my eyes on a Citation X.<br /><br />I can't wait to tell my mom and wife. MrBeachnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-7677223027770652702016-04-22T21:01:17.600+01:002016-04-22T21:01:17.600+01:00MSFT, GOOGL missing on earnings yesterday. Today S...MSFT, GOOGL missing on earnings yesterday. Today SLB warned of "full scale crisis" in oil, slashing spending by 50%.<br /><br />Take note that these are EXTREMELY bullish signals for equity buyers. Central Banks will panic (see BOJ today) and we will undoubtedly see more easing, bond buying, junk bond buying and then outright purchases of equities. (Remember that the BOJ owns over 40% of their bond market and 52% of the entire Japanese ETF market).<br /><br />As I type, USDJPY is up 250+pips on the day and JP, EU and US equities are rising into the close. We will take out all time highs in the very near future and start a sustained bull run that will crush any semblance of bearish sentiment.<br /><br />Oil continues to rise, so the worst of equity selling by HFs and SWFs is behind us. Finally even discretionary Macro HFs (always late to the party) appear to have capitulated, shifting from a short to long equity position during April after CTAs capitulated.<br /><br />Stop being wrong, get long and enjoy the ride. Dow 20,000 awaits.Indexernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-942851956557028762016-04-22T19:08:21.192+01:002016-04-22T19:08:21.192+01:00The silver move is also an important confirming si...The silver move is also an important confirming signal that the gold rally has legs. Given g/s ratio had blown out to GFC extremes (which were pretty extreme), the fact that it has made steady declines in favor of silver is important. In general, broader gold bull trends concur with a contracting g/s ratio (and g/gdx ratio) while the opposite is also true. Many don't have the stomach for silver's volatility, but keep an eye on its price traction if you are still long gold and/or gold miners.Talbakkennoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16344152685864614582016-04-22T16:18:20.832+01:002016-04-22T16:18:20.832+01:00Technical overview of global indices.
http://www.t...Technical overview of global indices.<br />http://www.thestreet.com/story/13541165/1/attention-bulls-nasdaq-shanghai-composite-flashing-technical-warnings.htmlSkrnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70495136444003358392016-04-22T12:59:23.536+01:002016-04-22T12:59:23.536+01:00Latest BofA Merrill Lynch Flow Show report noted e...Latest BofA Merrill Lynch Flow Show report noted equities saw $7.3B of outflows, while bonds saw $4.9B of inflows. In addition, money-market outflows were elevated at $30B. Report pointed out that while government bond funds have seen outflows for nine straight weeks, IG funds have attracted capital for seven straight weeks, and there have been inflows to high yield in eight of the last nine weeks. Furious rally in high yield best symbolized by high-yield steel sector trading at all-time highs. Nine straight weeks of inflows into emerging market debt following huge $102B in redemptions over past three years. European equity funds saw 11thstraight week of outflows (longest since May 2010), while money has now left Japanese equity funds for six straight weeks (longest February 2012). Fits with unwind of strong dollar. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-34965009897952029162016-04-22T11:50:19.349+01:002016-04-22T11:50:19.349+01:00Squawks, no link. Not sarcastic. Squawks, no link. Not sarcastic. Anonymousnoreply@blogger.com