AUDJPY (weekly info)-no change (above mid)
trend=up
high= 0.8864
rev= 0.8241; mid= 0.8553
Last week formed a dark cloud cover on the AUDJPY chart. A confirmation of that reversal signal should be seen as a warning for the bulls. Additionally a weekly close below the weekly 3LB mid would be an even greater warning.
30 yr Bond (weekly info)-no change (above mid)
trend=no
direction=down (1 bar)
low= 118.281
rev= 121.750; mid= 120.016
Someone is buying the long bond. Last week formed a bullish engulfing on the weekly chart but since we're not in a downtrend it shouldn't be viewed as a reversal signal. Probably more of a head fake. That or the story about the Fed selling puts at certain strikes to keep the yields from rising may have something to do with it.
DJ Food & Beverage - US (weekly info)new high 346.94
trend=up
high= 346.94
rev= 331.89; mid= 339.42
US food and beverage index is still rising. How long before people just snap? It's bad enough gas continues to rise. Making people choose between putting food on the table or gas in the car is not good political strategy. Eventually they'll turn off American Idol. That's when politicians will get scared.
33 comments:
American Idol...
But you can't EAT it!
well, if you'd like some real Fun, wait until people start getting the idea to denominate their 'Savings' using a Chart like..
http://finviz.com/futures_charts.ashx?t=SI
as opposed to U$Digi-"Dollars" ..
it's funny, given this..
http://www.ritholtz.com/blog/2011/04/savings-mistrust-a-credit-crisis-xplanation/
I think that as long you have a Whiteboard, some stick Figures, and a soothing Voice, you could convince the majority of peep to, Lemming estilio, 'Clavadista', if the mood so struck you..
AAIP
S&P Downgrades the outlook of the U.S....causes futures to fall.
My "gut reaction" to such 'news' from morons like S&P is to "buy that dip."
Silver unbelievable. Very powerful.
What a great day to have boatloads of cash.
Jim Grant was on TV this weekend and he basically said "I don't like anything here, just sit tight in cash", although he did name-check a dividend stock and say he anticipates 4-5% inflation. We do like income plays in this environment.
LB's prediction is that we are starting to see the anticipated rotation out of growth stocks and reflation vehicles. Imagine one's surprise when the dollar rallies ALONGSIDE stocks as commodities are sold to buy stodgy old income producing vehicles.... it's coming.
Here's the SPX 1295-1300 area so many have fingered as strong support. Let's see how we do now that we have finally reached this zone.
But isn't S&P always late when it downgrades?
NYSE TICK still hasn't gone below -1000 today. Go figure.
The intraday Silver action looks QUITE Bearish right now....
I suggest watching the yen. USDJPY declined sharply from >85 at the onset of this move down. Once the USDJPY (EURJPY, AUDJPY) stabilizes the move will be over.
Treasuries are a complete shit show, it is all over the place today with the ratings nonsense, Europe and any number of cross-currents. Almost untradeable unless you are the B/Ds and have been given the playbook in the morning.
I would recommend selling the 5y here as we take a peek at 2.00%. I think even with a slowing economy (duh!), the risk/reward is poor here. Sell them and sell 10s, we will be doing so, and booking some slightly unexpected profits. Wait to receive higher rates.
Of course I am pretty sure none of you here owns any 5y....
Just giving you the view from over here.
GKK is the falling knife du jour after postponing payments to creditors. It is had to know what precipitated this but it wasn't higher rates !
We do not own this but hold other stocks in this space. You have to choose wisely. Keep an eye on CYS and HTS as well today, there are some high yielding bargains out there, but you do have to be careful.
http://finance.yahoo.com/news/Gramercy-Capital-Corp-bw-4204193991.html?x=0&.v=1
GKK was supposed to be sold for $391M and market cap is currently $148M, so something is obviously up. Did SL Green pull their offer or is there something nasty in the books?
Generally we love falling knives but we wouldn't touch this with a barge pole right now.
I am glad I derisked late last week to miss this avalanche. Still, nothing looks attractive here. I will probably nibble some divvy equities but otherwise remain in cash until something begs me to buy. We have a truly unattractive risk/reward scenario across asset classes.
@LB, Re: JPY,
I think in a classical sense, the yen has to weaken. It remains to be seen the degree of FDI, but I suspect it will not have any meaningful positive pressure and the anemic forward growth and external accounts will, in my opinion, put downward pressure on the yen.
A weak JPY seems to be consensus, but which pair is best? The more visible punters think the long AUD:JPY trade is the best, but I frown on their trending models because they tend to play the greatest fool game. They tend to have similar consensus on EUR:JPY and I have the same skepticism. If I were a currency punter (and I'm not), I would be long USD:JPY
"I will probably nibble some divvy equities but otherwise remain in cash until something begs me to buy. We have a truly unattractive risk/reward scenario across asset classes."
That's more or less exactly how it looks from my perch here. We have nibbled this morning and we might have a punt on US equity indices later but it would be a short term thing and since we are looking at 1295-1330 range, agree that risk/reward isn't great.
Agree that AUDJPY is the momo punter's favourite FX trade and USDJPY is probably a much sounder fundamental bet.
This month has been a real pig for swing traders and leveraged longs but probably great for day traders and Squid. It's the kind of month where we would be happy to write down a big 0.0% return, in fact I would take that right now as we are down about 0.3%.
LMAO you can't make this stuff up: http://www.zerohedge.com/article/greek-2-year-bond-yield-passes-20
Greek 2 Year Bond Yield Passes 20%
Following the S&P news, oddly enough, one is not seeing a flight to safety away from US paper and into Greek. In fact, observing the absolutely record 20% yield print on the 2 Year Greek bond, one may be excused to speculate that the inverse is happening. Also, with the cash price of the 2 Year now at 20% and the prices of longer duration bonds in the 60s, there is now no reason to actually restructure the country: bonds have it pretty much fully priced in. After all, the Santorini liquidation value should be worth at least 20-30 cents on the bond dollar, er, euro.
More stuff: http://www.zerohedge.com/article/good-idiot-bad-idiot-moodys-maintains-top-us-rating-outlook-positive
Good Idiot - Bad Idiot: Moody's Maintains Top US Rating, Outlook Positive
Following the bad idiot move by the S&P earlier, here comes the good idiot. Per Moody's: "Moody's Maintain Top US Rating, Outlook Positive." In other news, Mark Zandi is violently and uncontrollably dry heaving in a corner somewher, wondering why, oh why, is it so difficult to get Tim Geithner's job.
I thought Zandi was Geithner's fluffer and that's why.....
Anon
Zandi wants Geithner's job...
"See I play well with others"
Mark Zandi is a tool.
Agreed.
AAPL resistance is now 326.50 and 330.5. If you're pressing shorts now, you better pay attention to those levels. A break back above that zone would make the move lower look like a "bear trap."
It's been a good short and could continue to be a good short....just don't get caught in a trap.
EEM and IWM being slaughtered today. But it's the usual 3% drop, and that always gets bought. So if I were short (I am not) I would be taking profits today.
Divvys that are UP today: NZT and PHI, both telecom stocks that are raising cash by spinning off or selling assets, of course this is favorable for their dividends.
Knife watch: GKK (is this now trading below book?) and BKCC have been hammered in recent weeks.
Bargain divvys? HTS and CYS.. there should be some income there unless the long end explodes... Ha ha ha
Anyway, we are watching all of these.
Greece... 20% on the 2y...
Might be the start of a 50 year bull market in Greek govies...
No? Plastic Acropolis, sir? Very nice...
Fishing boat? Ouzo? Goats? Albanian maid?
Just the kebab, please...
2.05% on the 5yr.... we love USTs but you've got to be kidding....
http://quotes.ino.com/chart/index.html?s=CME_INX&t=&a=&w=&v=w
1295-1300 holding up, so far..
AAIP
The question is, has the move down in Treasury yields completed, or is there going to be more de-risking this week before we turn around?
SPX certainly seems to be observing the technicals. We should note that a sell-off on the Monday after Op Ex is far from unusual....
POMO of 5y tomorrow. That should cap the move, not sure if I really want to sell the 5y ahead of that tomorrow.
EUR-USD 1.4228 -0.0202 -1.40%
USD-JPY 82.6270 -0.5048 -0.61%
Do the math - it is EUR-JPY -2.03%, that's risk off baby.
How weird is that Treasuries rally on the S&P downgrade?
To us here, of course it's not weird at all.....
I am not sure this move is over. I want to see some yen sold before I make a serious entry.
We had a green day, largely on the back of this one stock:
http://finance.yahoo.com/q?s=NZT&ql=0
LB
EURJPY definitely did worse than AUDJPY today. Vix up 10% but still below 20 so no fear. Amazed that gold was kept from breaking 1500. BB couldn't handle that. Also finding out that the administration knew about the downgrade talk on Friday. That's why TG had weekend tv time.
This was classic.
All the insiders were tipped off and they had Hatzius come out with a more bearish growth forecast ahead of the bond downgrade so that too many people would be derisking to result in a spike in bond yields. The other way around would have been much more bloody, a Tsy sale followed by people piling out of equities into higher yielding Ts.
EUR no longer Teflon. AUD still Teflon. For now....
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