Hope everyone had a good weekend.
I spy a small triangle development on the S&P500 next several days.... We should get some choppy downside action next few days as we carve the c-wave of this triangle.
I like the idea of scale-selling the DXY in front of 80.50.
Other than that I'm just wondering where all this rain is coming form in Houston-ville...We couldn't buy a drop last year amidst the worst drought we had seen...and now it won't stop.
Market Commentary 11Mar12
Disclosure/Warning
This blog should not be interpreted as investment advice of any kind. The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind. The authors may or may not trade in the markets discussed. The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.
30 comments:
Weekly 3LB Update 3/9/12
http://www.ritholtz.com/blog/
Does Your Financial Guru or Doomster Resemble A Cult?
Does your financial Guru or Doomster resemble a cult? To satisfy your curiosity, it might be worth taking simple test that will give you an idea whether what you thought was innocent objective altruistic financial advice and unbiased analysis is actually something more nefarious that wants to control your mind, your trades, and empty your bank account.
1. Does your Guru always make out like he’s right?
2. Does you Guru paint a picture that the other [non-disciples] are always wrong?
3. Is there any exit from the Guru’s philosophy without following the philosophy?
4. Does the Guru’s group use its own “Cult-speak”?
5. Does “group-think” dominate, suppressing dissent and enforcing conformity of thinking?
6. Is Guru’s advice irrational at times, contradicting previous or other tenets of Guru advice?
7. Does Guru’s philosophy suppress disbelief?
8. Does Guru’s philosophy denigrate competing ideas, schools of thought, and other Guru’s?
9. Does Guru make personal attacks upon critics?
10. Does Guru believe non-followers need “fixing”?
11. Does Guru insist that his interpretation is the only correct way?
...and so on. From BR's blog...
CV, it is time to go start your own blog somewhere else. Call it "Them that keeps fiat will eat their pets" or something. But you are crazier than Jim Jones..
China reports large trade deficit as imports surge
Demand for fuel in China has been rising as its economy continues to expand China posted a record trade deficit in February as commodity imports surged raising fears for the health of the global economy.
Imports rose 39.6% from a year earlier, while exports rose at a much slower 18.4%, resulting in a trade deficit of $31.5bn (£20bn).
China has been running a trade surplus for much of the last decade.
The surge in imports was led by crude oil, with shipments hitting a record-high of 5.95m barrels per day.
The oil price has been rising recently amid fears of supply disruptions in the Middle East.
...And the price of oil is going down, I think I heard.
http://www.bbc.co.uk/news/business-17335934
Will there be cool-aide served while we eat our pets?
Mutt
Kool-Aid and Pets don't mix well....
Maybe with a little chianti...
Noticed that El Tigre had to exit another tournament early with "leg problems."
Yeah...that dude's not winning another Major, let alone beating Nicklaus' mark.
He ruined himself early with too much testosterone/HGH/etc...and extreme "military" training exercises, etc... that dude has some 'demons' that haunt him (See Father)....and they ain't going away anytime soon.
BinT
I think the CDS market is in trouble. Now that there has been a sovereign credit event (after a 80% writedown) it will cost more to issue debt. If one has to wait until the loss is greater than 50% then rates have to rise to convince traders to buy the debt. LTRO or TWIST currently keeps the rates low (for now).
Anyone else notice that CNBC has moved this Kelly Evans chick in the studio and moved michelle caruso cabrera OUT to the hinterlands?
Smart move....
Andy T,
MCC is, definitely "too much" for most peep to 'stomach', that early, in the A.M. ...
though, the 'new girl' is, still, another script-reader..
so, we have that going for us ~!
~~
Quotage..
"But what is tyranny? Or how can a free people be deprived of their liberties? Tyranny is the exercise of some power over a man, which is not warranted by law, or necessary for the public safety. A people can never be deprived of their liberties, while they retain in their own hands, a power sufficient to any other power in the state."
-- Noah Webster
(1758-1843) American patriot and scholar, author of the first dictionary of American English usage (1806) and the author of the 1828 edition of the dictionary that bears his name.
Source: An Examination into the Leading Principles of the Federal Constitution, 42-43, (1787)
http://quotes.liberty-tree.ca/quote_blog/Noah.Webster.Quote.35E5
"And say, finally, whether peace is best preserved by giving energy to the
government or information to the people. This last is the most legitimate
engine of government. Educate and inform the whole mass of people. Enable them
to see that it is their interest to preserve peace and order, and they will
preserve them. And it requires no very high degree of education to convince
them of this. They are the only sure reliance for the preservation of our
liberty."
-- Thomas Jefferson
(1743-1826), US Founding Father, drafted the Declaration of Independence, 3rd US President
Source: Letter to James Madison, Paris, December 20, 1787. The Political Writings Of Thomas Jefferson 68 (Dumbauld Ed. 1955)
http://quotes.liberty-tree.ca/quote_blog/Thomas.Jefferson.Quote.84F6
AAIP
Andy:
I didn't play sports in college but played several in high school. If I was 3 over par on the final round and admitted "I could have finished" we'd call that Quitting where I grew up...
I think Tiger may be finished too.
BinT
Amen:
I agree. May have sorta won the battle, but certainly lost the war..
EUFCHF closed at 1.1910 on Friday (below 1.20). Guess what the SNB has been doing all weekend.
I still like Tiger to beat Jacks record...
@Ritholtz blogger (above)
1. Does your Guru always make out like he’s right?
I don't know, I don't have a guru... I've never 'claimed' to be a guru... I have ideas, & I publish them, most people think I'm wrong (hardly the stuff of a cult)...
2. Does you Guru paint a picture that the other [non-disciples] are always wrong?
I stick by what I say until it is proven wrong... I used to be a trader (like everyone here)... I made it public, in 2010, (Jackson Hole), that I was making the move to physical silver (when the paper price was $20)... I haven't abandoned the philosophy yet because it hasn't proven me wrong...
3. Is there any exit from the Guru’s philosophy without following the philosophy?
Yes... I've always maintained that I "hope I am wrong" about worst case scenarios... I even joked about NOT being the type to purchase car insurance HOPING to get in a wreck & collect on the premium)...
4. Does the Guru’s group use its own “Cult-speak”?
If I am a guru, I have no "cult" because everyone thinks I'm nuts...
5. Does “group-think” dominate, suppressing dissent and enforcing conformity of thinking?
The only "conformity" voices present are everyone on this blog, who conform together to tell me, an individual person, how wrong I have everything...
6. Is Guru’s advice irrational at times, contradicting previous or other tenets of Guru advice?
My message has been clear & consistent... The only 'contradiction' is that pre-August 2010 I was a paper trader, now I'm not...
7. Does Guru’s philosophy suppress disbelief?
I doubt I could be considered a guru because nobody BELIEVES or listens to me... They have expressed as much...
8. Does Guru’s philosophy denigrate competing ideas, schools of thought, and other Guru’s?
Every person on the planet has the right to hold beliefs & opinions... On just about every blog I read, the 'authors' & 'commentators' spend half their time dissing the opinions of the so-called EXPERTS... It's pretty commonplace...
9. Does Guru make personal attacks upon critics?
What? You mean like signing in to make a comment & instead of using your real name, using a 'cutesy' one like And Madonna is Ugly"...
10. Does Guru believe non-followers need “fixing”?
I don't know because I'm not a guru... As far as "fixing" is concerned, it is quite obvious to me that it would be a very difficult task indeed to attempt to "fix" anyone...
11. Does Guru insist that his interpretation is the only correct way?
I would hope that any individual that sets out on a course would continue to stay on that course as long as he wasn't hurting anyone else & that the course held true to his own beliefs...
~~~
...and so on. From BR's blog...
CV, it is time to go start your own blog somewhere else. Call it "Them that keeps fiat will eat their pets" or something. But you are crazier than Jim Jones...
Jim Jones was responsible for "killing" many people & disrupting many lives in the process...
CV does football picks, does a little gardening, plays fantasy football & baseball, makes Oscar picks...
&, of course... drumroll... does NCAA Bracket Picks (like just about everyone else)...
http://fantasy-sports-nation.blogspot.com/
Cheers!
The market keeps trying to push higher but UST yields refuse to budge and stay near their respective lows.
I know how covered calls work with stocks and options. Is there a way to do the same with bonds? I'm just trying to see how the market will deal with CDS being obsolete.
@Amen
Quad witching week, with opex smack dab in middle of Rd 1 of NCAA Tourney (with St. Patty's Day the day after & Ides of March the day before)...
I wonder how the geeks programmed the algos to handle that...
@Amen
I'm just trying to see how the market will deal with CDS being obsolete...
~~~
Frankly, I think that's too complicated (or premature) a question to ask at this point (when you consider that there are still Spain, Portugal, et al out there who undoubtedly will stall & undergo every measure to use the loosely constructed arrangement as a 'model' which serves their best interests... This is further complicated by the fact that (as far as I know), that the legal jurisdictions of settlement vary quite substantially than those of Greece...
The following IS NOT a direct answer to your question... But I feel it was the best synthesis I read that combines some of the elements...
~~~(ht Peter K)~~~
"Here's the back drop from the FX side.
1) Euroland/ECB has a balance sheet that is 30% larger then the Fed, a collective economy that is 15% smaller than the US and a currency that is 31% stronger than the US Dollar.
2) The Euro is a currency that is backed by the full faith and credit of "?????", i.e. no one. The present conventional wisdom is that the Euro is a DMark in disguise with an implicit guarantee by the German Treasury/Buba. But the Germans/Buba are screaming from the top of their collective voices that there is no implicit guarantee.
3) The Euroarea banking system is insolvent. Pre LTRO, the US money market funds were lending short to the Eurobanks lending long. Since the exodus of the MM funds, the ECB introduced the LTRO, and the circular system of funding cash to governments via banks. And the lending activities were primarily to the EU governments. This is the Northern Rock model, and we know how it will end.
4) In turn, the Euroland governments (read socialist welfare states) are insolvent since they have gorged themselves on cheap loans over the last 10 years, the prize for giving up their national currencies and adopting the knock off DMark, i.e. Euro.
5) Therefore, the Euro Area governments are now deeper in debt than they were pre Euro, with no way to get out of it. They can't transform themselves into a market economy like the US since the basis of their entire existence is to operate a socialist welfare state. Or in other words, if they dismembered the socialist welfare state, they would put themselves out of a job.
6) The entire edifice of the Euro is being propped up by non European entities. These are the Central Banks and their sovereign wealth funds of the Chinese, Russians and the Arab states. The primary reason for propping up the Euro is to break the hegemony of the US dollar. Just ask yourself, how many times has China bailed out Greece/Portugal/Spain? And it's only a matter of time before these said entities bail. (Hitting the EUR/CHF bid for size at 03:00 CET anyone?)
As to how to trade this puppy, I like the short Euro (but never against JPY) currency route. Keep a base short Euro position at all times. A position you feel comfortable with. You can day trade it(since it will always come back even if you get caught in a squeeze), or position trade selling pop ups and taking those positions in in front of option barrier levels. But in essence, it gives you a winning position for when the "GSE moment" arrives (that will no doubt happen when you are sound asleep), that is when Mr. Market realizes that there is no implicit guarantee to the Euro, and they all head for the exits at the same time.
Oh, and most importantly, have fun.
(continued)
Here is another aspect of this thing that just occurred to me. In essence, the new 130b rescue package is mostly comprised of guarantees, pledges and new paper. The only cash that will be passed (March 20/27 and April 11?)is the 15% redemption to the US debt holders under the PSI. The rest is either pledges to make good interest/redemption or new paper (EFSF). Old debt will be paid off with new debt. This new debt is not backed by any good money, but rather the guarantees of a shrinking AAA club of Euroland countries.
And finally, the whole kip and kabuddle is backed by the full faith and credit of no one. And the most striking thing about this whole mess is that the debt holders of Euro obligations assume that the Euro is implicitly backed by the Germans while at the same time, those same Germans are screaming at the top of their collective voices that there is NEIN implicit guarantee.
Does the term "Government Sponsored Enterprise" ring a bell?
... almost "on queue" with my (12:32) comment above...
"This is further complicated by the fact that (as far as I know), that the legal jurisdictions of settlement vary quite substantially than those of Greece..."
~~~~~
The Greek PSI Lawsuits Begin (13:03)
http://www.zerohedge.com/news/greek-psi-lawsuits-begin
So far todays SPX volume appears to be a little more than half of Fridays. No one is playing? Took their chips and cashed out?
Not sure where resistance is but 1370.58 (previous high) and 1375 (the 18s) seem to be pretty good.
@Amen
Dude ~ It's the "week of" the end of a quarter...
I'm not the candle guy... YOU ARE... But just eyeballing it, it seems to me that the candle is hanging around the Q1'08 candle ("Q'ly" candles I'm talking here)...
You really think that the Bernankenstein doesn't know this?... (Oh wait ~ I forgot that the FED has NOTHING TO DO with ANYTHING)...
Since it's all fiat paper (WHICH NOBODY AROUND HERE BELIEVES)... I couldn't possibly make any sense to anyone that, at all costs, "the economy", only means what QUARTERLY S&P charts have to say (which translates to "FEAR REDEMPTIONS", or, avoidance thereof)...
Next quarter is a different story (hell ~ perhaps ALL YEAR ~ or, at least until RoBOM-a- nibus) gets seated...
Q2'12 (or even a 'wiggily' on quad witching opex to shred some non-alpha mo-mos), isn't out of the question... But QUARTERLY?... It's all systems GO (except for the 'goyim')...
AmenRa,
re: concerns about CDS/LTRO/'Sovereign Debt'(in general)..
remember QE to "infinity", yes?
ibid.
yeah RA, don't you know "its so easy to see" if you look at supply and demand on a chart from 4 years ago
lmfao
March 12, 2012 4:03 PM
sounds like someone doing a bad imitation of a 'frothing at the Mouth'-ZHer..
what a waste of pixels..
ibid.
...SKEW up over 11% today.
AmenRa,
why is it the SKEW is, so often, 'overlooked'..
these daze it's hard to pass by a CNBS 'squawking head' w/o hearing VIX-this, VIX-that, and VIX-the other thing..
but, ~no one gets into SKEW..
??
AAIP
Evil Spec covers skew extensively:
big fan of that site, here's an example:
http://evilspeculator.com/?cat=225
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