Posts Tagged ‘SPS’

Notes From Underground: Strange Days Indeed

April 17, 2018

The market has several themes it is trying to digest, which made Tuesday’s price action interesting. Reported earnings have been as strong as whispered and with the Syrian bombing over the weekend, the markets had time to analyze the outcome (and as usual it was treated as a minimal event with no proliferation).

On Sunday night there was an immediate rally as the SPOOS gained 0.5 percent on the open. Strong earnings kept the rally in gear but what’s interesting that the financials failed to hold their initial rallies. This is important because most analysts were predicting significant growth in bank ROES, especially for the large Wall Street banks. Goldman’s FICC revenue increased by more than 20 percent as trading volatility provided an opportunity for one of the few remaining large prop shops remaining on the Street. The Goldman rallied fizzled and finished 2 percent down on the day.

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Notes From Underground: Synchronicity

February 5, 2018

We have had many false key technical signals over the last 12 months. BUT LAST WEEK there have been THREE KEY REVERSALS. The DOW, S&Ps AND NASDAQ all made all-time highs and closed below the previous week’s low. SYNCHRONICITY indeed. Pay close attention as the world is all aflutter with fears of higher interest weeks forcing a reassessment of equity values. I believe Monday’s massive selloff IS A RESULT OF THE MASSIVE EFFECT OF THE RISK PARITY PARADIGM. I have warned that all the synthetic mimics of DALIO’s risk parity profiles were going to create a small door in which to exit. I am posting a podcast I recorded with Anthony Crudele on January 30, but just released this morning. Learn from actual traders, CHI GIRL and YRA HARRIS.

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Notes From Underground: The Same Old Song, With a different Beat (Since 2017 Be Gone)

January 4, 2018
After a sharp selloff late on December 29 the market has regained its mojo and rallied 2%. While the first two days of trading for the European markets were not confirming the S&P rally, the DAX and Euro Stoxx 50 rallied with the EURO STOXX 50 closing back above its 200-day moving average on Thursday. The consensus from Wall Street analysts is for emerging markets and Europe to be better alternatives to U.S. investment prospects. Many quality strategists believe the U.S. equity markets are stretched in its valuation while Europe’s recovery is gaining momentum and emerging economies should be the major beneficiary of a synchronized global expansion.

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Notes From Underground: An Arthur Fonzarelli Moment for Yra

November 29, 2017

Six weeks ago I did a podcast with Anthony  Crudele and Rick Santelli about markets. I brazenly said the S&Ps would experience a 10% break before a further 3% rally. The S&Ps were at 2550 and as of this morning the 3% has been actualized long before the 10%. My respects to Rick Santelli, who was right on target with his call to purchase all equity markets for the next period of time. In true FONZI ways, I was wrong. But I have been liquidating long-held stocks into this rally and will continue to do so as I view this 23% rally since the Trump election as a great gift. If I had predicted on November 9 that the S&Ps would be 23% higher a year later, you would have had me committed.

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Notes From Underground: Its Was a Great Week for S&Ps

August 20, 2017

The news was extremely positive for the equity markets last week. FOUR key points:

  1. Retail Sales proved to be much stronger than consensus;
  2. The FOMC minutes were very DOVISH as the FED was concerned about the inability of upward inflation to gain traction;
  3. The demise of anti-globalist Steve Bannon was greeted with cheers on the floor of the New York Stock Exchange. News of the removal resulted in a rally in the S&Ps on Friday, but it was short-lived; and
  4. The bobble heads of the access media reported the dismissal as an elevation of the Davos-inspired crowd, represented by the Gary Cohn wing of the Trump administration.

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Notes From Underground: Some Perspective on Wednesday’s FOMC Meeting

June 13, 2017

The FED has painted itself into the proverbial corner by pre-announcing a rate hike. The market will be listening to Chair Janet Yellen’s press conference, which takes place at 1:30 CDT, a half hour after the Fed releases its statement and summary of economic projections. The market is expecting some discussion Fed’s balance sheet unwind, but Yellen will be cautious as she won’t want to cause a large selloff in the Treasuries led by the algo-driven headline readers. Tomorrow morning the Bureau of Labor Statistics releases the CPI data, alongside the Census Bureau’s retail sales data. Market consensus is for tepid numbers on both releases.

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Notes From Underground: For What It’s Worth

November 21, 2016

Everybody has opinions on the recent election outcome but as usual most of the opinions are from the echo chamber and not factual in any way. This blog is dedicated to seeking profitable investment and trading opportunities as I sort through the noise of the financial media. As with Brexit, the punditry found itself trapped in its own rhetoric and every prediction but the weakness of the pound proved to be WRONG, at least in the short to medium-term. British Gilts (10-year notes) rallied substantially in the post-Brexit confusion and most importantly the Footise stock index rallied 15% off its election night bottom. The POUND did weaken substantially against the U.S. dollar and the euro currency but I have argued for a few years that the British current account made the relative strength of the POUND to its key trading partners unsustainable.

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Notes From Underground: “Do You Presume To Criticize The Great Oz?!?!” (Or Stanley Fischer)

August 28, 2016

When Janet Yellen delivered her speech on Friday morning the markets reacted to the dovish overtones via buying of SPOOS, GOLD, BONDS and selling the U.S. dollar. The initial action was less muted as the algo headline readers first though Chairwoman’s words mildly HAWKISH, but as key words were measured in context the sense was Yellen was being dovish in not leaning toward a September rate increase. Yellen did give us a significant barometer of data measurement. It seems that 190,000 increase over a three-month moving average is the FED‘s BOGEY. This Friday’s estimate is 180,000, which now puts more pressure on its importance because of September’s FOMC meeting. As usual, Yellen said,”… the economic outlook is uncertain, and so MONETARY POLICY IS NOT ON A PRESET COURSE,” (emphasis mine).

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Notes From Underground: Cramer Unsavory? I Think Not

January 14, 2016

Jim Bullard? Now There Is An Unsavory Chap

Today was not like the other days for the break in the equity markets came early. As all the global markets were in sell mode St. Louis Fed President James Bullard hit the airwaves with thoughts about being wrong in his inflation projections. It appears that the selloff in crude oil is providing the Fed hawk with concerns that the SUMMARY of ECONOMIC PROJECTIONS may be softer than the December FOMC meeting revealed. Bullard sounded as if he would not be in favor of the Fed raising rates because of the inflation rate turning away from the spurious 2 percent mandate. The unsavoriness of Bullard’s comment is not that he fears a downturn in inflation, and maybe lower growth, but that Bullard seemed to find his DOVISH posture as the U.S. markets were heading toward the August lows. Bullard in unsavory because he called out CNBC’s Jim Cramer for “cheerleading for low rates twenty-four hours a day.”

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Notes From Underground: More Proof of Algo-Driven Volatility

December 20, 2015
Dateline Japan: When the BOJ released its policy decision in the wee hours of December 18, the algos interpreted the news as an expansion of monetary stimulus and assumed it was the QQE program. In the press conference, BOJ Governor Kuroda explained that the extension was not an additional easing but merely an extension of bond duration that the BOJ would buy. Because there’s a dearth of bonds available for purchase, the BOJ is extending purchases to include those of 12 years in length.

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