# (Bull) Market Feb. 2021



## ducati916 (1 February 2021)

So I'll start with the seasonality chart:








Re. the GME story:






Mr flippe-floppe-flye 
	

		
			
		

		
	















Liquidity is going to be an issue:









Illiquid stocks (small caps) always make for the best targets in any sort of manipulation.











So what actually happened is that a big Fundie (Scion) started soaking up shares in a small illiquid name. Some other fundies came on board, then some technical traders and the icing on the cake, the mob aided and abetted by Hedge Funds.

Forget the Reddit crowd. Non-issue.






And lose them they will. If they truly believe their own press, the market will teach them an expensive lesson.

Already highlighted is the VaR issue: if triggered, this can generate selling from serious players, which will move the mega-caps, never mind the small and micro-caps. The issue as highlighted is that the market is a complex system linked by oooodles of leverage. Leverage amplifies vol. Vol. has jumped by 50% over last day or two x leverage of X. De-leveraging means selling stuff that you are long and/or adding to your short book. Either way, selling pressure will outstrip buying pressure.






The 'buy-the-dip' will be back, but probably not on Monday. I think we see another 5%-10% decline before the BTD players step-up. The Bull is far from dead, but even Bull markets can have nasty dips.

jog on
duc


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## ducati916 (2 February 2021)

So markets open with some interesting rotations:

Natural Gas and PMs/Miners all higher, Silver more so than Gold. GME is a dead in the water trade, unless you want to short it. And SPY bounces. The issue for me is that the VIX, while off its highs, still looks dodgy.




















Natural Gas has been signalling bullish for a while now and looks to be breaking higher. NG is famous for blowing shorts up. Trouble is, it can be so weather dependent. However, with the blow-up in oil and its producers, there seems to be a legitimate supply issue. It looks as if this could run a lot further to the upside.

Gold/Silver seems more of a gamble. On the chart, it looks great. 50/200 crossover, long consolidation period. The only thing is the interest from the Reddit crowd, not a + in my book.







If you want potential short squeeze stocks:






Bull to continue? I think so:







And Mr flippe-floppe-flye:







With vol. higher again, moves in various markets are going to come back to life for a while at least. In today's early trade it is still far too early to tell whether the impact of last week is going to bleed into other markets. ATM, it looks like it might. I don't think today's early bounce is salvation for the bulls. We have a run back to Treasuries, PMs and the DXY.






These do not suggest that the market is currently bullish stocks. This is a run to safety atm. The current bounce is the buy-the-dip crowd. There will be a time to buy-the-dip, I'm just not convinced that it is today.

jog on
duc


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## Smurf1976 (2 February 2021)

ducati916 said:


> NG is famous for blowing shorts up. Trouble is, it can be so weather dependent. However, with the blow-up in oil and its producers, there seems to be a legitimate supply issue. It looks as if this could run a lot further to the upside.



In the context of North America, a lot of NG production is associated gas. That is, gas from wells that also produce oil.

Long story short = the collapse in oil drilling and wells not being drilled also means the gas won't be coming out of those wells either. From there it's simple supply and demand economics.

Some wells do produce gas only, some oil only, some both. Even within the same broad geographic area some individual wells may flow oil only, gas only, or both. 

Australia's a completely separate gas market from that of North America, there's only extremely limited linkage between the two, but the same basic phenomenon has occurred. Some drilling that was to produce gas was postponed by the relevant companies once the oil price crashed - they're looking at the economics of the project overall and the prospect of the oil component being close to worthless, and perhaps fears of gas going the same way, lead to them postponing the project.


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## ducati916 (3 February 2021)

Late post after an early start:

10yr yields continue to rise, not good for Gold.

VIX is dropping, but will it find support at 50EMA? It might.

Big bounce in NYMO, but, the trend is lower currently.

Market close to highs, but breadth is waaaaaaay off.

Lots from Mr flippe-floppe-flye.

10yr heading higher. Still looking +/- 1.3%

AAPL news.


















































And oil news:

-    Global oil demand fell to 92.2 mb/d in 2020, a 9% decline from the year before, according to a new EIA estimate.

-    Demand rebounded rapidly after hitting a low point in April 2020, but demand was stagnant and even contracted slightly in late 2020.

-    The EIA expects a sharp rebound in demand this year, although two massive unknowns – the pace of vaccinations and the pace of infections from new covid variants – throw most forecasts into a deep state of uncertainty. 

*Market Movers*

-    *Imperial Oil (NYSEMKT: IMO) *was down 2.9% in early trading after posting a larger loss than expected. The company took a C$1.17 billion impairment on shale gas assets that it believes won’t be developed. 

-    *ConocoPhillips (NYSE: COP)* was up in early trading after posting a smaller-than-expected fourth-quarter loss at $800 million.

-    *Marathon Petroleum (NYSE: MPC)* reported a fourth-quarter profit of $192 million, compared to $443 million in the same quarter a year earlier. 

*Tuesday, February 2, 2021 *

Oil shot up to a one-year high on Tuesday, with WTI topping $55 per barrel. The oil market is “supported by the combination of tightening fundamentals, as seen through the rising backwardation and the renewed risk appetite in the U.S. stock market,” said Ole Hansen, head of commodities research at Saxo Bank A/S.

_*ExxonMobil posts first annual loss in decades. *_*ExxonMobil (NYSE: XOM)* reported a loss of $20.1 billion in 2020, the first annual loss in at least 40 years, and also the fourth consecutive quarterly loss. The loss included a $19.3 billion write-down. At the same time, Exxon vowed to defend its dividend, stating that it would cut spending rather than the dividend if oil prices drop below $50 per barrel. 

_*ExxonMobil announces carbon capture effort.*_ *ExxonMobil (NYSE: XOM) *pledged to spend $3 billion on low-emissions technologies through 2025, mostly related to carbon capture. Bloomberg notes that much of the effort is old news and depends on not-yet-enacted government subsidies. 

_*Exxon announces board shakeup. *_Exxon announced changes to its board amid investor pressure to cut spending. The changes came as D.E. Shaw, which owns a sizable position in Exxon. Reuters reported last week that more than 135 investors managing more than $2 trillion in assets formed a coalition to pressure the oil giant. Engine No. 1, a San Francisco-based investment firm, said Exxon needs independent board members “to ensure a clean break from a strategy and mindset that have led to years of value destruction.”

_*Exxon discussed a possible Chevron merger last year.*_ Exxon and Chevron, were in talks to merge amid the pandemic crisis last year, the Wall Street Journal has reported, citing unnamed sources in the know. Such a tie-up would be one of the biggest corporate mergers ever and create a company that could be worth more than $350 billion based on Exxon’s and Chevron’s current valuations.

_*BP lost $5.7 billion. *_*BP (NYSE: BP) *lost $5.7 billion in 2020, the first loss in a decade. The company said it would ramp up renewable energy capacity to 50 gigawatts by 2030, up from 3.3 GW currently.

_*Glimmers of hope for crude oil prices. *_Oil was off to a reasonably good start this year thanks to the start of a vaccination push and a Saudi commitment to cut more production. The continued surge in Covid-19 infections and a new flare-up in China shook optimism and weighed on prices, but now things appear to be looking up based on the latest supply and demand data and forecasts.

_*Goldman Sachs: Oil market tightening.*_ The oil market rebalancing “continues to beat our above-consensus expectations,” Goldman Sachs said in a January 31 note to clients. “Our base-case remains for a demand-led rebalancing of the oil market,” the bank said. 

_*Total outperforms peers in 2020.*_ French oil company *Total (NYSE: TOT)* outperformed other oil majors last year. According to Rystad Energy, Total reduced costs on a per-barrel basis by the most compared to its peers. It also discovered 1 billion boe in 2020, allowing it to be the only major able to replace more than 100% of what it produced. 

_*Biden admin revokes drilling permits.*_ Biden’s Interior Department approved drilling permits in the first few days in office, despite an executive order putting a freeze on them. On Friday, Interior said 70 permits were improperly issued, and they rescinded them. 

_*Iran won’t return to the nuclear deal unless sanctions lifted.*_ Iran said it would not simply return to the terms of the 2015 nuclear deal until American sanctions – implemented after the U.S. pulled out of the deal in 2018 – are removed. 

_*Shell ordered to pay compensation for Nigeria oil spills. *_*Royal Dutch Shell (NYSE: RDS.A)* was ordered by a Dutch court to pay compensation to two Nigerian villages in a case that stretches back more than a decade. Importantly, the case establishes a precedent of parent companies being held responsible for pollution abroad. 

_*Shell bets on power trading and hydrogen. *_*Royal Dutch Shell (NYSE: RDS.A) *is making big bets on expanding its power trading and hydrogen units as part of its energy transition plans.

_*Offshore wind turbine market heating up. *_Competition is heating up in the market for offshore wind turbine manufacturing, with incumbent *Siemens Gamesa Renewable Energy (BME: SGRE) *seeing a rising challenge from *GE (NYSE: GE)* and *Vestas Wind Systems (CPH: VWS)*. Meanwhile, Siemens said it would eliminate 7,800 jobs by the end of 2025, mainly from its gas and power division. 

_*Natural gas prices rise on winter weather. *_On Monday, natural gas prices shot up by more than 11% as colder weather swept over the northeast. 

_*Goldman: Gas markets tight in summer. *_Goldman reiterated its view that natural gas markets look increasingly tight heading into next winter. The bank sees U.S. natural gas prices averaging $3.25/MMBtu in the summer. 

_*Automakers abandon Trump's effort to stop California fuel economy rules. *_A group of automakers abandoned their support for the Trump administration’s efforts to bar California from setting tighter fuel economy standards. The companies include Toyota, Fiat Chrysler, Hyundai Motor, Kia Motors, Mitsubishi Motors, and Subaru Corp. An auto industry trade group also proposed opening talks with the Biden administration on tightening federal standards.

jog on
duc


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## gartley (3 February 2021)




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## gartley (3 February 2021)

EURUSD has met weekly upside projection and reversed.  The DXY is on the verge of giving a weekly buy signal.  Let's see how the broader market reacts to that. A lot of pundits saying EURUSD will only be a brief pullback but I am not convinced......


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## ducati916 (4 February 2021)

Some interesting data re. earnings:










That is an issue. When earnings are good, the small rise and later sell-off do not bode well.

VIX is down, but still at this long standing support area, with stocks near their highs. Yesterday's chart re. breadth, which is falling away, is also a cause for concern.











Arabs obviously want higher prices. Now that fracking and US supply is broken, with Biden set to reduce supply further, oil can move higher still.

Natural Gas is still looking bullish.






jog on
duc


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## ducati916 (4 February 2021)

gartley said:


> EURUSD has met weekly upside projection and reversed.  The DXY is on the verge of giving a weekly buy signal.  Let's see how the broader market reacts to that. A lot of pundits saying EURUSD will only be a brief pullback but I am not convinced......
> 
> 
> 
> ...





I already have DXY signalling long.






jog on
duc


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## gartley (4 February 2021)

ducati916 said:


> I already have DXY signalling long.
> 
> View attachment 119523
> 
> ...



I'm with you brother got a long on the daily about 2 weeks  and sold the EURUSD and longed USDCAD.  Weekly which obviously lags a bit only just starting to give the signal. Did it that way on purpose so reduce the number of duds.


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## ducati916 (5 February 2021)

Today we have some VIX data:

This chart is essentially correct: after big VIX spikes, it pays to be long. So far so good. The reasoning is then that as we have just had a significant spike, long and strong, is the way forward.

Maybe.






I agree generally (most of the time) long after a big spike is the correct position. Except that last year, we had a spike, which was followed by an even bigger spike (circled).






How this was differentiated was on breadth and market level. We had a new all time high, with falling breadth. Today we almost have an all time new high and falling market breadth.






That should at least provide a cautionary position.

Interest rates world wide are on the rise.






Why?

Stocks are far more resistant to rising rates than is gold (as an example) but they (stocks) are not immune to rising rates.

For Gold, it looks grim atm:






Rates are going to 1.3%. Whether they stop there, continue to rise or the Fed. steps in, we'll just have to wait and see. 






Dodgy coin: POS. Worth speculating on? Of course, why not.






SPACS are generally speaking doomed, much like the dot.com junk. There may well be some survivors down the road, but sifting the wheat from the chaff will take place at some point.

Not much from my main man, Mr flippe-floppe-flye






jog on
duc


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## gartley (5 February 2021)

Really starting to look like an important month........


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## gartley (5 February 2021)

Some thoughts on short term wave count. Wall street crooks and banksters like clockwork again pumping up the futures....


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## qldfrog (5 February 2021)

I have had a couple of expensive too early bear move lately, just hope i will not miss the real one


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## gartley (5 February 2021)

qldfrog said:


> I have had a couple of expensive too early bear move lately, just hope i will not miss the real one



I always take partial profits (50% of investment) when the market I trade  moves the equivalent of a 14 day average True Range and then move my stop to break even. Leant that the hard way. If the move does work out you will sacrifice some profits but it's much less stressfull.
Re the big one, I missed the Covid crash as was on holiday in Tassie but that's life.  However always hard to pick a top, always better to wait for that initial sell off  and look to position on the first reaction.

But can't complain too much this week EURUSD, Gold sell worked out as planned and USDCAD long I suspect ready to rock an roll soon


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## ducati916 (6 February 2021)

First week of Feb. almost completed:

Energy and Financials leading the way this week.






With the market bouncing hard and back to or exceeding the previous high, the bulls are back in command, for the moment. Adding to the divergence in breadth, there are a couple of other warning signs:

Low short interest. A high short interest is better for a bull market as it adds a further buying demand. A low interest means that there is no squeeze play (nothing as a dramatic as GME) to push prices higher.

A second consequence is that in any initial decline, the decline is brought on by closing long positions rather than short selling. Short sellers to profit (from their short selling) at some point will (have) to buy their shorts back in, creating a (temporary) bottom/bounce. If the decline is from (primarily) closing longs, this natural pause, bounce, is absent.

Short selling rather occurs into an already falling market, amplifying the move lower.

See next chart.






Margin:

Now this is an issue: when selling hits, it is amplified as margin evaporates and so does liquidity, amplifying a further contraction in margin and so on.









The market (while making new highs) is unstable. Ironically, there is more risk at market highs, than at market lows, particularly in a sell-off as we had last year.

If you look at the divergence in breadth chart, you'll see that there can occur a time interval that defies measurement, between a stealth decline and an actual market decline, which is a function of construction and capitalisation weighting.

Article from Rosie:



			https://money.usnews.com/financial-advisors/articles/q-a-david-rosenberg-on-economic-recovery-and-a-stock-market-bubble
		


And Mr flippe-floppe-flye:












And Energy news:

*Friday, February 5th, 2021*

Brent is closing in on $60 per barrel for the first time since January 2020. Crude inventories in both China and the U.S. declined this week, offering more evidence of a tightening market. “The physical market is also looking increasingly tight,” said Eugen Weinberg, head of commodities research at Commerzbank AG.

_*Shell profits drop, but boosts dividend.* _*Royal Dutch Shell (NYSE: RDS.A)* reported a $4.8 billion profit for 2020, down 71% from the year before. The oil major hiked its dividend for the first quarter, following a sharp cut last year. “We are coming out of 2020 with a stronger balance sheet,” Chief Executive Ben van Beurden said in a statement.

_*Shell sees oil demand back to “normal” in 2022.* _“I believe 2022 is going to be sort of back to normal” regarding global oil demand, CEO Ben van Beurden said. However, that depends on the aviation sector experiencing a full recovery.

*Oil surges as OPEC+ keep cuts in place. *Saudi Arabia kept oil shipments to Asia unchanged even as the market has tightened, sending oil prices higher this week. “It looks like, at every turn, Saudi seems to want to support the market,” Michael Hiley, energy trader with LPS Futures, told Bloomberg. “If demand really picks up, we could be short oil pretty quickly, because U.S. production isn’t going to come back fast.” At the same time, division may increase between OPEC+ members as prices continue to rise. 

_*Engine No.1 pans Exxon strategy. *_Engine No.1, an investment firm that has taken a large stake in *ExxonMobil (NYSE: XOM) *and has sought changes to the board and to corporate strategy, criticized the oil giant’s leadership and issued a statement lambasting the company’s latest moves as insufficient. “A Board that has underperformed this dramatically and defied shareholder sentiment for this long has not earned the right to choose its own new members or pack itself in the face of calls for change,” Engine No. 1 said. The firm said that Exxon’s current course ensures “continued value destruction.”

_*Supreme Court to hear pipeline case. *_The U.S. Supreme Court will hear a high-profile case involving the use of eminent domain. The PennEast Pipeline Co. LLC is looking to condemn land in Pennsylvania from private citizens in order to build the project that would carry shale gas to refineries on the east coast. The case could have broad repercussions over how energy companies can use eminent domain.

*Biden restarts Vineyard wind. *The Biden administration said on Wednesday it would restart permitting for the first major U.S. offshore wind farm, after the Trump administration froze the process. 

_*Biden DOE nominee advances.*_ Jennifer Granholm, nominated to head the Department of Energy, easily cleared a committee vote, suggesting she will have little trouble earning confirmation. She voiced support for U.S. LNG exports even as she championed climate action. 

_*Ford to double EV investment.* _*Ford (NYSE: F) *said it would spend $22 billion on EVs through 2025, twice its earlier plan. 

*Apple to invest $3.6 billion into Kia Motors.* Kia Motors (KRX: 000270) surged nearly 15% after local media reported that Apple (NASDAQ: AAPL) would invest $3.6 billion in the company to build out EVs. 

_*Chesapeake Energy cuts 15% of staff.*_ *Chesapeake Energy (NYSE: CHK)* said it would cut 15% of its staff as it prepares to exit bankruptcy. 

_*China’s coal plants 3x more than rest of world. *_China added 38.4 GW of new coal capacity in 2020, more than three times built in all of the rest of the world. 

_*The COVID-19 pandemic has upended global energy investment trends.*_ The pandemic has not broken but intensified global energy trends that emerged on the eve of COVID-19, whether it be the collapse of coal-fired power generation, the growing surplus of oil production, or the booming interest in renewables.

*The green industries minting billionaires. *Want to get rich quick while playing a part in fighting climate change? Here are the clean energy sectors that have been creating billionaires.

_*$1 trillion in stranded assets for pipelines. *_A new report from Global Energy Monitor finds that 212,000 kilometers worth of pipeline is under construction or on the drawing board, roughly equivalent to the entire length of the U.S. highway system. The report says that could result in $1 trillion getting stranded as the energy transition accelerates.

_*Chevron bids $1.13 billion for Noble Midstream Partners.* _*Chevron (NYSE: CVX)* said on Friday it had offered to buy Noble Midstream Partners LP in a deal valuing the company at $1.13 billion. The decision comes just a few months after Chevron bought the upstream operator, Noble Energy.

_*Interior cancels offshore Alaska lease sale. *_The U.S. Department of Interior canceled work on a propose lease sale off Alaska’s southcentral coast, following President Biden’s executive order pausing leasing on federal lands.

_*South Korea to build $43 billion offshore wind.*_ South Korea unveiled $43.2 billion plan to build the world’s largest wind power plant by 2030.

_*Canada oil and gas deals surge 468%. *_M&A transactions in Canada in the fourth quarter last year were worth US$10.01 billion, up by 468.3 percent from the previous quarter and a surge of 504.2 percent compared to the last four quarter average of US$1.66 billion, according to data from GlobalData cited by World Pipelines.


jog on
duc


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## ducati916 (8 February 2021)

Some quotes:






Pullbacks from OB to below 50MA are more numerous. I have no data on other markets, but might be worth investigating.






We have had rotating leadership throughout. A healthy sign.






Housing running hot:






Commodities running hot:






Both are inflationary. Both are excluded from CPI numbers. But both will drive an increase in the yield on the 10yr. Check out the TIPS also.

The DXY. Has (currently) buying support from the Commercials:






Gold does not:






The signal from the COT is a strong signal when the Commercials and price direction align, as they have here. The Commercials are counter-trend the majority of the time. 

No help in NG.






But not heavy selling in SPY, indicating what exactly? I'm still defensive re. stocks given (a) the divergences that are cropping up everywhere, (b) the lack of follow through re. earnings, (c) the rise in 10yr yields, (d) rise in margin, (e) the number of speculative bubbles in various stocks and asset classes and (f) the speed/depth of pullbacks when they occur. All of the above indicate an unstable market which will correct/reverse very quickly under minor conditions.














I also have the weeks data charts, but these will have to constitute a further post as the 11 chart limit kicks in.

jog on
duc


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## ducati916 (8 February 2021)

Part deux:

Margin debt up +/- 50% over the period of a year.






Pretty much all SPACS











Bit of a premium in the physical prices. Nothing outrageous.











More SPACS






History doesn't repeat, but it rhymes:






And from the present day GME fiasco:











jog on
duc


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## qldfrog (8 February 2021)

ducati916 said:


> Part deux:
> 
> Margin debt up +/- 50% over the period of a year.
> 
> ...



Amazing that one can think that holding on gameshop, it might recover...


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## Warr87 (8 February 2021)

its a little surprising given that there were articles and talk about it coming back down at some point. but who knows what was going through their minds.


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## qldfrog (8 February 2021)

Warr87 said:


> its a little surprising given that there were articles and talk about it coming back down at some point. but who knows what was going through their minds.



I understand (a bit) jumping on the wagon but at the very least be realistic and once it started plunging, it was really a case of get the Fxx out ASAP.you could hang onto Afterpay or even Tesla after a crash, but that was really a play against the short so with an expiring date even if it worked..which it did in a way, then the funds got the final laugh on the late (re) tarded suckers jumping onto what was just a wagon to oblivion
Not sure if we should laugh or cry.The enthousiasm and stupidity of youth I think




Not a good sign for the so called background in finance, am I the only one to have a smile when my eye caught this?


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## qldfrog (8 February 2021)

Back to Mr duc thread, I keep some vague interests on the french situation and there are a few articles lately about actual rising cost of life (aka inflation)
So crisis, people do not spend but: power, gas, petrol, everything but for the items you can not shop for (clothes etc) are going higher and higher 1.5% to 2 % annual increase.
Salaries are obviously not going up but for the Public servants..and welfare..which is probably most of French peoples


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## Warr87 (8 February 2021)

qldfrog said:


> I understand (a bit) jumping on the wagon but at the very least be realistic and once it started plunging, it was really a case of get the Fxx out ASAP.you could hang onto Afterpay or even Tesla after a crash, but that was really a play against the short so with an expiring date even if it worked..which it did in a way, then the funds got the final laugh on the late (re) tarded suckers jumping onto what was just a wagon to oblivion
> Not sure if we should laugh or cry.The enthousiasm and stupidity of youth I think
> View attachment 119757
> 
> Not a good sign for the so called background in finance, am I the only one to have a smile when my eye caught this?



We knew it was a short-time play, but I guess you have to understand that not everyone knows what exactly that means. I think even amateur savvy invsetors would have been in and out. hate to see people lose large sums of money though!


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## samuilk (8 February 2021)

would like to see your current holdings


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## Warr87 (9 February 2021)

samuilk said:


> would like to see your current holdings



mine?


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## ducati916 (9 February 2021)

With (after-the-fact) concern about order flow:







And Hedge Funds that had a bad January:






The overall market currently:






The BIG news on BTC:











Now that is interesting. 

Mr flippe-floppe-flye is a participant in both trading and investing in crypto.
















They are not for me. The article on the Tether issues will keep me out of this market.

Meanwhile Gold is ready to bounce:






The 10yr (on its way to 1.3% and potentially 2%) will consolidate while its 50EMA catches up. Which means that gold can bounce higher. The 10yr is the focal point of a massive carry trade: sell 10yr buy stocks (S&P500). Obviously the Fed. is the buyer of the 10yr, who else wants a yield of 1% and change? Pretty much no-one. The question is how high will they let it go before stamping on this trade? Paradoxically, if they (Fed.) yield curve manage, then the carry trade actually explodes and the market will move much higher. Obviously this is not a trade retail can (easily join) profit from as the funds from short sales cannot be used in long purchases.

The issue will be in 'unwinds'. 

The second issue is the DXY. Firmly in a downtrend, but currently experiencing a bounce. Yellen has said that the DXY will be left to 'market forces'. This is a change from 'strong dollar' policy wording. Biden wants US manufacturing to pick up: a weak dollar helps exports. A weak DXY is 'inflationary' to PPI. Energy costs escalate. Do Tech. firms (to power their server farms) feel higher energy costs in the same way that the previous economy did?






jog on
duc


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## samuilk (9 February 2021)

Warr87 said:


> mine?



Yes and ducati's


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## Warr87 (9 February 2021)

__





						Weekly Portfolio - ASX
					

Other updates:  Happycat is at +9.4%  My super account is doing good too and already recovered losses from last week.  CFD trading This has been the star of the week. It was being hammered the last 2 weeks. It finally caught a BO on ETH that also broke out numerous times recently. This trade...




					www.aussiestockforums.com


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## ducati916 (13 February 2021)

So a very busy week at work restricted my ability to update. No matter, the market continued to drift higher.

On bubbles:






On Robinhood signups:






On TSLA buying BTC:






On the GME type of BS:






On POT stocks:






On the week:






On NG:







On Gold Miners:






On the VIX:






NG is moving higher on the fundamentals. Reduced storage, increased demand out of primarily China. As always with NG, the weather is the wild card. ATM, it is colder than predicted. If it gets warmer, no doubt the bears will return. That being said, the lack of supply may trump the weather in any case. Certainly the bears have been trying to push prices down...






Gold Miners are looking to move higher based again on the fundamentals, ie., higher average POG. Gold itself is struggling as the 10yr keeps moving higher (yields).

Yields are now indicating 1.4% (up from my 1.3% indication).

VIX is again at a strong support level. For the market, VIX needs to break lower. While it may do so, it is unlikely to do so in a big way. The greater risk is a (further) break (spike) to the upside. The reason is that energy again leads the market this week. PPI inflation is bad for the market as it increases the move in the 10yr.

From Mr flippe-floppe-flye:










An interesting read:









						How sneakerheads ruined online shopping
					

Why shopping — for everything from the PS5 to the Nugget couch — got so competitive.




					www.vox.com
				




jog on
duc


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## ducati916 (13 February 2021)

samuilk said:


> Yes and ducati's





Essentially any ETF that has both a long and short component. Those that have leverage x3/x2 are preferred to those that are simply x1. The reason is that I play a market neutral game.

jog on
duc


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## qldfrog (13 February 2021)

ducati916 said:


> Essentially any ETF that has both a long and short component. Those that have leverage x3/x2 are preferred to those that are simply x1. The reason is that I play a market neutral game.
> 
> jog on
> duc



And as discussed elsewhere: hard to do on asx only bboz and bear are short available ETFs here..so definitively a US play


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## ducati916 (14 February 2021)

The bull market remains in place:

All of the below, should turn upwards in a bear market.






Europe looking to break out.






As are Emerging markets:






Most importantly for the US, Financials are moving (although this is a very select sort of financial). The reason financials are doing well is due to the steepness of the yield curve. It has to be said that European financials are f***ed, an absolute cesspit. US financials require some caution also.






IPO's contain plenty of SPACS. Many of these are destined to end horribly. But not today.






Mr flippe-floppe-flye









The SPY: the red box is the 'reversal' box.






BTC: Below the 20 is obviously an issue. The Blue is the 5.







Gold: the green box is the reversal box. Red is the 5, Purple is the 20. Gold looks to be finding support at the 20, but confirmation is if it passes through the reversal.






Another view: the 10yr looks bullish, which generally spells lower prices for gold. I'm (guessing) that the gold chart above, will fail and gold will fall below the 20, which previously supported it. If 'gold' moves higher, it is potentially in the gold miners as opposed to gold itself.







Overall, the bulls remain firmly in control. We are definitely in 'buy-the-dip' territory, as of course there will be dips along the way. Inflation while picking up, is not yet an issue for the market.  

Scenario 1.

Inflation (will likely) continue, yields will continue to rise and at some point (somewhere between 2% & 3%) the market will falter. There could start to be defaults on debt loads. This is deflationary. For the Fed, this is a far bigger issue than inflation.

Scenario 2.

Inflation will continue, rates will rise, the Fed. will cap rates. Gold will come back in a big way, stocks will continue higher for a time and currencies will become a big market issue.

jog on
duc


----------



## qldfrog (14 February 2021)

ducati916 said:


> The bull market remains in place:
> 
> All of the below, should turn upwards in a bear market.
> 
> ...



Great analysis as always but i found these charts style just unreadable. :-(
It conveys souvenirs of 1980 dot matrix print out , hand written math fct graphs on log papers.
in all the due respect i genuinely have for you Mr Duc, can you get visual clues, read from these?
Is it just me?


----------



## ducati916 (14 February 2021)

qldfrog said:


> Great analysis as always but i found these charts style just unreadable. :-(
> It conveys souvenirs of 1980 dot matrix print out , hand written math fct graphs on log papers.
> in all the due respect i genuinely have for you Mr Duc, can you get visual clues, read from these?
> Is it just me?




Monsieur Grenouille,

Attached below are the 4 charts of the same thing: they all depict the same information, but appear visually different. We (traders) are pattern recognition machines, but imperfect. We have any number of inbuilt biases that distort our perception of reality: we see what we want to see.

By looking at the same information in visually different ways, we at least increase the chance that we will pierce the shroud of our own bias and see more clearly.

Clearly (to me) are the 3 support areas, which then broke higher for for TNX:GLD. The last (circled) was about as bullish a pattern on the P&F that you will ever see. P&F charts also, via the Wyckoff method, give pretty good price predictions (where 1.3% comes from) moving into the future.

Some will say, you can see all of the above by just looking at 1 chart. Possibly. I like confirmation. I also like divergences (very much) as it is in the divergences that many make errors of bias.


















jog on
duc


----------



## ducati916 (14 February 2021)

Inflation:

Inflation currently, is only a financial markets thing. Your average person can't even spell inflation currently:






For the markets and those active in the markets, yes, inflation, or at least the fear of it is currently a thing. Opposing it however is the polar opposite, deflation. Sitting in the middle are disinflationary forces, acting against outright inflation.

The 2 forces will be: (a) interest rates and (b) DXY










DXY is currently in a massive support zone. The green box indicates a potential move higher. If support breaks, well next stop 80/79. If that Gold/Silver will be already screaming higher.

Paradoxically, gold seemingly, seems to be headed lower. This is the dichotomy in the markets currently and why there are so many completely disparate opinions.

The 'market' seems to be saying: the DXY will find support and head higher: therefore gold lower. Possible. Watch this space.

jog on
duc


----------



## samuilk (14 February 2021)

ducati916 said:


> Essentially any ETF that has both a long and short component. Those that have leverage x3/x2 are preferred to those that are simply x1. The reason is that I play a market neutral game.
> 
> jog on
> duc




I am invested into VGS, international market ETF from vanguard. My goal is for early retirement, thoughts?
I have some small holdings in other companies, but majority of my position is with VGS


----------



## ducati916 (14 February 2021)

Oil news:

*Friday, February 12th, 2021*

Brent held above $61 per barrel in early trading on Friday, despite some headwinds from a slight strengthening of the dollar. Analysts are now split on whether or not the rally has gone too far or has more room to run.

_*OPEC cuts oil demand forecast. *_OPEC expects oil demand to rise by 5.8 million barrels per day (bpd) this year, down by around 100,000 bpd from last month’s projection due to lockdowns in major developed economies in the first half of this year, the cartel said on Thursday.

_*EIA: U.S. shale to grow. *_The EIA said that with WTI over $50, U.S. shale will return to growth later this year. The agency increased its 2022 supply forecast to 11.53 mb/d, up from 11.49 mb/d last month. 

_*S&P cuts credit rating for ExxonMobil. *_S&P cut *ExxonMobil’s (NYSE: XOM) *credit rating by one notch to AA- with a negative outlook. The ratings agency cited heavy levels of debt and energy transition risk. 

_*Exxon to close its Australian refinery. *_*ExxonMobil (NYSE: XOM) *said it would close its 72-year-old Altona refinery in Australia, the nation’s smallest. Once closed, Australia will only have two remaining refineries. 

_*Goldman: Upside risk to $65 oil. *_A broad commodity supercycle is getting underway, creating upside risk to $65 oil, according to Goldman Sachs. “I want to be long oil and hang on for the ride,” Goldman’s Jeff Currie said in an interview with S&P Global Platts on Feb. 5, warning “there is a lot of upside here.” He added: “Is it back to $150/b? I don't know... as it is a macro repricing we are talking about and everything needs to reprice.”

_*Equinor sells of Bakken assets. *_*Equinor (NYSE: EQNR)* announced the sale of its Bakken assets for $900 million, after purchasing them for $4.4 billion nearly a decade ago. “We should not have made these investments,” Equinor Chief Executive Officer Anders Opedal said. “The Bakken does not compete.”

_*Appalachian fracking boom didn’t lead to prosperity. *_A new report from the Ohio River Valley Institute finds that despite a natural gas boom over the past decade, the counties in Appalachia that saw the most drilling actually saw worse job growth than elsewhere. The conclusions undercut the notion that the shale gas industry is a job engine. 

*Oil majors trim shale dreams.* *ExxonMobil (NYSE: XOM),* *Chevron (NYSE: CVX), *and *BP (NYSE: BP) *have collectively shelved as much as 2.4 mb/d in future oil production plans from U.S. shale, according to an analysis from Energy Intelligence. The strategy overhaul means the majors will focus on cash generation rather than production growth. Excess cash flow will go to paying down debt or otherwise be returned to shareholders. 

*Shell says its production already peaked. Royal Dutch Shell (NYSE: RDS.A) *said it would start reducing oil production at a rate of 1 to 2% per year, which would include asset sales. The company said from now on it would allocate 25% of its capex to renewables and marketing, or $5 to $6 billion. Marketing includes retail gasoline stations and lubricants.

_*Morgan Stanley: Gasoline could become worthless.*_ Morgan Stanley says the market may be ascribing zero or even negative value for ICE-derived revenues at GM and Ford and has listed a variety of factors that are likely to transform the companies' once-profitable assets into potentially cash-burning and loss-making businesses.

*Texas RRC delays flaring decision.* The Texas Railroad Commission again delayed a decision on flaring permits, evidence that the regulator is starting to scrutinize flaring plans to a greater degree. 

*Marathon cuts 5% of workforce.* *Marathon Oil (NYSE: MRO)* cut its workforce by 5%, and also cut executive pay. 

*China’s grid firms to buy 40% renewables by 2030. *China will require its grid companies to purchase 40% renewable energy by 2030.

*Rivian aims for IPO this year.* EV-startup Rivian is planning to go public this year at a valuation of around $50 billion, which would make it one of the largest IPO’s of the year. Meanwhile, Xos Trucks Inc., another EV builder, is planning to go public with a SPAC with a $2 billion valuation. 

*Macquarie opens $2 billion renewables fund.* Macquarie, the world’s largest infrastructure investor, announced that it would open a $2 billion global renewables fund, its second such fund, after strong interest from institutional investors. It will target wind and solar projects in Western Europe, the United States, Canada, Mexico, Japan, Taiwan, Australia and New Zealand.

*Libya’s oil port reopens. *Libya’s Hariga oil port reopened after a month-long strike, which had cut output by more than half from 320,000 to 120,000 bpd.

*LG Chem battery dispute could disrupt EV manufacturing. *LG Chem filed a trade dispute against SK Innovation for stealing trade secrets. If LG Chem wins, the U.S. may see disrupted imports of battery cells needed for EV manufacturing.

*Biden admin launches $100 million clean energy funding. *The U.S. Department of Energy’s Advanced Research Projects Agency-Energy, or ARPA-E, announced $100 million in funding for low-carbon technologies. ARPA-E funds high-risk high-reward early-stage technologies.

From Mr flippe-floppe-flye:






jog on
duc


----------



## ducati916 (14 February 2021)

samuilk said:


> I am invested into VGS, international market ETF from vanguard. My goal is for early retirement, thoughts?
> I have some small holdings in other companies, but majority of my position is with VGS





There are a number of variables around strategies you might employ: will you

(a) Buy and hold;
(b) Trade in/out;
(c) Hedge;
(d) Employ Options;
(e) Dollar cost average;
(f) Other.

The strategy(ies) that you employ will have significant impact on how your returns look. The market direction will impact the strategies that you employ.

(Very) generally speaking, to retire, you would need the dividend yield in nominal dollars to support your lifestyle.








At 2% you will likely need +/- $4M worth of stock to give you $80K, which is a bare minimum.

So to get to let's say $10M of stock, you'll (likely) need to accumulate additional shares, unless what you hold trades high enough to sell out and pay your tax on capital gains, to net $10M to reinvest in something else.

The above strategies can all be employed to increase your total holdings to a desired level, to then live off of dividend income.

Further questions:

(a) Do markets only go up?
(b) If not, capital gains are unlikely to provide what you seek:

Therefore, some strategies will likely need to be employed.

jog on
duc


----------



## qldfrog (14 February 2021)

About inflation:
Just a few figures: any falling rate? rego fee? 5 to 6 pc increase
Now i went shopping last week
uht milk at aldi .cheapest available $1.25 a litre
Diesel $1.23 medical insurance +6%
Fruits 3$ to 4$ a kg, bread reaching 3$ for decent multigrain loaf
coffee now around 5$
2y ago- i would say an easy 10% less
House prices still going up,no pay rise around if you are lucky still having a job

Not sure about situation in nz or us, but we have a noticeable price increase lately in daily cost here not sure about cars, tvs , but rent here in regional australia are up the roof.
People will soon learn how to spell inflation 🙁


----------



## samuilk (15 February 2021)

ducati916 said:


> There are a number of variables around strategies you might employ: will you
> 
> (a) Buy and hold;
> (b) Trade in/out;
> ...




Awesome reply thank you. I follow Dollar Cost Average approach, for the vgs etf. I'm guessing 2% dividend isn't high? Perhaps I should look at other etfs?


----------



## ducati916 (16 February 2021)

samuilk said:


> Awesome reply thank you. I follow Dollar Cost Average approach, for the vgs etf. I'm guessing 2% dividend isn't high? Perhaps I should look at other etfs?





I actually like dollar cost averaging. So if this is a preferred strategy, then yes, 2% is low and you can do much better. Here are some examples:

So you would go here: https://etfdb.com/

As an example I have selected:












Now reading the blurb, we see that this is an actively managed fund. Might be good, might be not so good down the road. A risk to evaluate. The dividend at 12% is attractive. In part it is attractive because 'Preferred' stock and 'Convertibles' sit higher in the capital structure than equity. This (in theory) should fluctuate less than equity. From a DCA point of view, this might not be as attractive, as you may want greater range in the fluctuations. It may be more attractive. Individual choice.

Then you can explore here:





__





						FINVIZ.com - Stock Screener
					

Stock screener for investors and traders, financial visualizations.




					finviz.com
				


















So the 2 examples that I picked are simply random from the generated search. Both resources are free. Both will provide you with plenty of possible candidates. 

In short, yes you can do far better than 2%, while maintaining many of the qualities that were attractive in your original choice.


jog on
duc


----------



## samuilk (16 February 2021)

ducati916 said:


> I actually like dollar cost averaging. So if this is a preferred strategy, then yes, 2% is low and you can do much better. Here are some examples:
> 
> So you would go here: https://etfdb.com/
> 
> ...




Thank you again. I will do some more research and look into the links provided . I guess I stuck with the vanguard ETF for the low maintenance cost/s. I read through the little book of common sense investing and they were suggesting the low costs over time would be the winner. But at 2% I guess there are better choices out there, thanks heaps.


----------



## ducati916 (16 February 2021)

So Futures are trading and with US markets closed today, there may be some gaps tomorrow.







Yields are moving higher, gold probably lower. Polar blast, NG higher.






Meanwhile on bubbles:






A new way to study bubbles:











jog on
duc


----------



## ducati916 (17 February 2021)

The big move is in the 10yr.

That is a big move.

What is not so clear currently is why such a big move. There is bad weather, oil/gas prices moving higher, but weather comes and goes. If that is all it is - fine, prices will come back down again in the energy sector and yields will fall.

However, yields are moving higher on a secular basis (unless the Fed. steps in) and my model now indicates 1.5%.  The DXY seems to have stalled. It doesn't go lower yet, I think it trades sideways for a while. However, again, the trend seems to be lower for the moment.

With yields jumping as they did today, Gold (obviously) is not doing great. Even the Miners, which looked (reasonably) bullish have turned down on the jump.







The overall market is in 'hold' while this sorts itself out. Energy and Financials are doing well (obviously) as conditions currently give them a tail wind.












Commodity super-cycle.

The Arabs flooded the market when demand was almost non-existent, destroying the US Shale production. Now on the brink of world trade re-opening and bad weather, they are restricting supply, or at least not increasing it at the margin.

Is there something political occurring? The obvious answer is yes. The what and why are simply speculations currently. Tied into EVs and green tech?

In summary, the SPY doesn't really follow the DXY, but interest rates, DXY and commodities are all correlated. With 3/4 heading in the wrong direction, that doesn't bode well for the markets. There are already existing some serious divergencies in the SPY. Divergencies take time to play out. They are a good warning sign. Financials leading are another warning sign as is energy.

Re. energy: as is currently being demonstrated by the weather, green energy cannot currently replace fossil energy. Energy is what makes the economy run. If energy prices rise too high (PPI inflation) everybody feels the pain. Too many dollars chasing too little supply will have the 10yr heading to 3% pretty fast. 3% (I think) is crash territory for the SPY.


jog on
duc


----------



## ducati916 (18 February 2021)

First off: BTC

Blackrock starting to dabble. Probably the reason it broke through the $50K mark.








Meanwhile stocks are off. This is not yet a BTD moment: that divergence that has been sitting for a while might now be coming into play.






Plenty of space below still.






DXY weakening, CRB strengthening. This is PPI inflation. It is why rates are increasing from the 5yr - 30yr. The 10yr is now headed for 1.5%. It will likely make 2% (although my model isn't indicating that currently) and that number could be a point where the Fed. steps in to manage rates.

If they (Fed.) do, that is an all-in buy on gold/silver.






Banks will (should) run hot on this news.

Also, I'm guessing the outright speculation via RH etc may get a further boost in the arm from either (a) trying to make up losses or (b) make enough to pay off mortgages etc. The style is pure momentum: buy the winners (to date) which is an incredibly (a) risky strategy or (b) needs market experience to implement successfully, which they don't seem to have.









And Mr flippe-floppe-flye:






jog on
duc


----------



## ducati916 (19 February 2021)

This is still not BTD territory:

VIX is up, but still plenty of space to run higher atm.






It is not a crash either: credit spreads are normal (falling) currently. Credit spreads and Repos are almost always in on a crash.






This is just a pullback. It could be a deeper pullback to the 50EMA (we have not even reached the 20EMA yet) or go nowhere at all.

Money market funds have seen tremendous drawdown and re-investment into the market:






Now that flood of money is/will slow. It has added to the surge in stock prices over the past year. Now we will need to see if Corps. continue to repurchase equity, as that is a big driver of higher prices and is essentially a massive carry trade.

A bit of schadenfreude: but a $100M win is still pretty good.






And Mr flippe-floppe-flye:






The defensive sectors are holding up today:






jog on
duc


----------



## ducati916 (20 February 2021)

So as we reach the end of the trading week:


PPI inflation comes in higher than expected.






Which has triggered a surge in the 10yr to offset rising commodity prices and a weak dollar.






VIX higher:






And likely (next week) to continue higher. We are closer to the start than the finish.

Energy and Financials did ok. Everything else, meh.






Mr flippe-floppe-flye:






So the only thing that has really caught the attention of the speculators: is BTC.

Central Bank digital currencies are coming and probably a lot sooner than thought. That is now a given. They will be no different to fiat, except that the CB can track you that much more easily. So whether they come sooner or later, the ultimate difference is slight to nil as far as the desirability of holding BTC or gold/silver.

The issue is that only 1 crypto can emerge as a money. Probably BTC, all the others are irrelevant. Simply because otherwise you simply replicate the fiat issue.

Investing:

Then you have all the issues re. internet: hacking, DOS attacks, etc. Just how safe is it really. N. Korea was in the news again, hackers stealing $1.9B in BTC, so very definitely not inviolable.

Divisibility is an issue. What good is a coin worth $50K or $100K etc? It cannot be used as money easily.

Acceptability is a further issue. For BTC to become money, it will have to universally acceptable as such. Putting aside government taxes, acceptable by sellers of goods and services. You need a doctor, does he accept BTC? You want to buy a property, does the vendor accept BTC?

Doesn't its ultimate value reside in BTC becoming a de facto money? If it doesn't or can't, what is its ultimate value?

Trading:

It has just breached its long term resistance. This is very far from a confirmation. Many initial BO are invalidated. Almost invariably (by definition) we will have a test of that BO point. BTC has also drifted far from its 50EMA. On its first run up, it also got far ahead of itself and came back. My money would be on the same again.

Ultimately, it will have to pass the test of history. There will be something that tests its limits. If it breaks, it was an interesting experiment. If it passes, it passes and will continue as an additional financial asset.






jog on
duc


----------



## qldfrog (20 February 2021)

ducati916 said:


> So as we reach the end of the trading week:
> 
> 
> PPI inflation comes in higher than expected.
> ...



Just one point Mr Ducati @ducati916 , BTC can easily be divided.
So i pay fees when trading it in the order of 0.000xxx.
But i do agree that it is counter intuitive to pay some goods 0.000467 BTC.a psychological issue
I mentioned this previously so i see it as a storage of wealth : gold like and people will just convert chunks of it into fiat currencies 
(or maybe even a ripple like
crypto for day to day purchase but I doubt.)
Otherwise agree with BTC, Ethereum maybe as only cryptos worthy in the long term.
The legislative risk is imho the highest and akind to asset seizure.
BTC becoming illegal and replaced by fiat crypos owned by reserve banks and adding tracking and control: worse than paper currencies..


----------



## ducati916 (21 February 2021)

So a recap of where we are:

Most sectors are overbought. Which generally means a bit of a correction.






This is also confirmed by how far prices have stretched from the 50day.






Here, divergencies are important: if sector prices are high, but participation is low, then there will be issues.






Another looking at sector divergences.






You want to be in rising sectors. Again, divergences are important. An important pair here are Consumer Discretionary/Staples. If they flippe-floppe, the market is turning defensive (add in Utilities).







The market is definitely due a correction, which we have already seen the start of. It will be (at some point) a BTD. Just not yet.

Oil News:

*Friday, February 19th, 2021*

The Texas electricity crisis is easing, but the outages, damage, and human toll were historic. As of Friday morning, Texas grid operator ERCOT said that it would be emerging from “emergency conditions” later in the day. After a crazy week, WTI fell just a bit but held onto gains close to $60, a price not seen since January 2020. 

_*Texas outage eases. *_As of Tuesday, around 45 gigawatts of electricity generation from renewables, coal, and natural gas were offline. More than 4 million people lost power. By Friday, most of those people saw power restored. The crisis has once again focused attention on several grid policy questions – the lack of weatherization at Texas power generation assets, the lack of a capacity market, and the state grid’s isolation from the rest of the country.

_*U.S. oil production impacted.*_ Around 4 mb/d of U.S. oil production was sidelined due to power outages, wellhead freeze overs, and other equipment failures. Most of the outages were in the Permian Basin. Restarting frozen or shuttered wells is not necessarily straightforward, and some restarts could take weeks. 

_*Texas bans shipment of natural gas out of state.*_ Texas Governor Greg Abbott took the drastic move of banning the export of natural gas from the state in order to conserve supply. The move is highly controversial and potentially illegal, although most analysts note that any legal challenges would be moot because the order will have expired by the time a judge reviews them. The Governor also personally sent requests to several LNG exporters to halt operations. 

_*LNG cargoes canceled. *_At least 10 LNG cargoes were canceled because of the grid crisis, according to Bloomberg.

_*Refinery restarts could take weeks.*_ Four of Texas’ largest oil refineries saw widespread damage from the cold snap and could take weeks to repair, according to Bloomberg. The outages could reduce demand for crude, but cut the supply of refined products. The four refineries include *ExxonMobil’s (NYSE: XOM) *Baytown and Beaumont plants, *Marathon Petroleum’s (NYSE: MPC)* Galveston Bay refinery, and *Total’s (NYSE: TOT)* Port Arthur facility. The result could be $3-per-gallon gasoline by May. 

_*The U.S. wants to reopen talks with Iran. *_The U.S. government said it would accept an invitation from the EU to hold talks with Iran. Iran did not exactly jump at the news, saying it would “immediately reverse” recent actions on its nuclear program, but only after the U.S. lifted sanctions. 

_*Gas companies hit “jackpot” on Texas deep freeze.*_ While Texans are struggling to keep the lights and the heating on, gas producers in the Lone Star state, or at least those whose wellheads did not freeze, are having a blast.

_*Saudi Arabia to increase output.*_ Saudi Arabia is poised to reverse its 1-mb/d voluntary production cut in the coming weeks, according to the Wall Street Journal, with the returned barrels hitting the market in April. “A Saudi increase in production…makes perfect sense given the tightness that is starting to emerge in the market,” Ole Hansen, head of commodity strategy at London-based Saxo Bank, told the WSJ. “The market will probably take it quite well.”

_*Shell to sell Alberta assets for $900 million.*_ *Royal Dutch Shell (NYSE: RDS.A)* will sell its Duvernay shale assets in Alberta for $900 million to *Crescent Point Energy Corp. (TSE: CPG)*.

_*Maersk plans carbon-neutral shipping containers. *_Shipping giant A.P. Moller Maersk A/S is accelerating plans to transition to carbon-neutral operations, including plans to add the first container ship running on biofuels.

_*U.S. shale sticks with restraint, for now. *_With WTI surging to $60 per barrel, the U.S. shale industry could be in a better financial position than previously expected. Recent comments from shale executives suggest that drillers won’t return to aggressive spending plans, instead focusing on cash generation.

_*Canadian gas drilling on the rise. *_Canadian shale gas drilling has increased rapidly this year, and Canadian gas exports to the U.S. is also on the rise. Canada’s drillers are hoping to capture more market share as U.S. drillers have cut back. 

_*Texas freeze raises the cost of charging a Tesla to $900. *_The electricity shortage in Texas amid the cold snap has sent spot electricity prices soaring so much that the surge in power prices equals a cost of $900 for charging a Tesla.

_*$100 oil possible on commodity supercycle. *_Several investment bank analysts say that oil could spike to $100 per barrel because we could be at the beginning of a new commodity supercycle.

_*Egypt to restart a second LNG plant. *_Egypt is close to restarting a second LNG facility after being closed for eight years. The restart boosts Egypt’s hopes of developing a major natural gas hub and LNG export industry.

_*Shell’s Nigerian accounts frozen in a court dispute.*_ A Nigerian court restricted *Royal Dutch Shell’s (NYSE: RDS.A) *access to its bank accounts in the country over a years-long legal dispute.


Then we have the old canard: Silver outperforming Gold on another thread:











Hardly. Silver (relative to Gold) is (historically) underpriced. In true PM bull markets, Silver does perform (relatively) better than Gold. Silver is definitely looking like it may warm-up a bit, but then again, maybe not.






jog on
duc


----------



## ducati916 (22 February 2021)

Bank stocks and their ETFs:





















Took a little while.

jog on
duc


----------



## ducati916 (22 February 2021)

And DFEN looking ready to follow:






jog on
duc


----------



## ducati916 (23 February 2021)

Some EOD charts:

Breadth re. 50EMA is falling, bearish.






Interest rates have been on fire recently. Gold may catch a counter-trend bounce if rates consolidate for a period.






Shorter time frame:

That period of consolidation might be fairly short, if, rates adhere to that trend line.






Calls are heavily overweighted. They have been (probably) caught on the wrong side of the market. If they reverse and PUTS are purchased, as we have seen over the last year, they can add some additional volume to the mix.






VIX low and threatening higher, which could accelerate the sell-off.






Still lots of room below.








Is this THE top? Categorically no. It is currently a short-term top and pullback. But it is far too early to be buying the dip. To buy the dip, ideally we would like to catch all of those overbought areas in their oversold areas.

Interest rates are moving higher. My target is now 1.5%. The area that might indicate a serious market spasm lie in the 2%-3% range. We still have a ways to go.

DXY:

Bearish.

Which fits the narrative of strong up-trending commodity prices, driving the 10yr higher. A stronger DXY will reverse those trends. I don't see that happening currently.






jog on
duc


----------



## ducati916 (24 February 2021)

So the market still showing weakness.

Subjective bubble analysis:









Certainly there is an increasing probability of further (short term) weakness:






Cryptos selling off hard.






The question is how hard, how far?

At least to the 50EMA. Whether they go tp the 200EMA, I guess we'll find out.






ATM I would say that the 200EMA is a distinct possibility.






Mr flippe-floppe-flye:






The rising 10yr puts pressure on mortgage rates. The housing sector has been red-hot. An area of the economy that has been positive during the C19 issues.

For the moment, this in stocks, is just a run-of-the-mill selloff from overbought to oversold. Nothing more.

jog on
duc


----------



## ducati916 (24 February 2021)

Oil news:

-    The Texas blackouts came from a steep drop in generation from gas, coal, wind and nuclear power. 

-    Natural gas typically can supply 40 GW of capacity at peak periods, but frozen gas lines, wellheads, and other damage to infrastructure led to widespread outages. 

-    The mismatch between supply and demand grew to as much as 30 GW on February 15. 

*Market Movers*

-    *SunPower (NASDAQ: SPWR)* was downgraded by Credit Suisse to Underperform. The solar company’s stock sank by 9.6% during midday trading on Monday. 

-    Electric truck maker Xos will go public with a blank-check SPAC, valued at $2 billion. 

-    Mizuho Securities downgraded *Sunoco (NYSE: SUN) *to Neutral from Buy. 

_*Tuesday, February 23, 2021 *_

Oil prices were off a bit in early trading on Tuesday, but are nonetheless trading close to more than one-year highs after soaring on Monday. The price hike comes shortly after Goldman Sachs forecast that oil prices would climb into the $70s over the next few months and after it became clear that U.S. oil production and refineries will take a bit of time to resume their normal level of output after the Texas Freeze knocked out oil refineries and oil production.

_*Texas refineries restarting.*_ Motiva, the U.S.’ largest oil refinery, began to restart operations in Port Arthur, TX after a weeklong shutdown. A handful of other large refineries announced a return of operations. Still, a full recovery could be weeks away, which could push up gasoline prices. 

_*Texas crisis was historic.*_ Gas traders said the volatility was historic. “I’ve been through a lot: The ‘98 and ‘99 power spikes in the Midwest, the California crisis” of 2000-2001, Cody Moore, head of gas and power trading at Mercuria Energy America, told Bloomberg. “Nothing was as broadly shocking as this week.” Some traders likened it to a Lehman Brothers moment. 

_*Texas blackouts leave winners and losers.*_ Some high-profile companies, such as *Comstock Resources (NYSE: CRK)*, saw a windfall for their natural gas when Texas market prices went haywire last week. But buyers of gas were slammed.* Atmos Energy (NYSE: ATO)*, a distributor of gas, said it needs to raise cash after spending $3.5 billion to secure fuel during last week’s crisis. Canada-based *Just Energy Group (NYSE: JE)* lost $250 million and may have trouble continuing as a going concern. Its shares were down by nearly 25%.

_*Texas oil production restart could take weeks.*_ It could take at least two weeks to restart the more than 2 mb/d of Texas oil production shut-in from last week’s cold snap. “With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note. “I think it will be a while before things get better out in the field,” one executive at a Permian producer told Reuters.

_*Diamondback says it lost 4-5 days of production.*_ *Diamondback Energy (NASDAQ: FANG)* said that it lost four to five days’ worth of total production from the Texas blackouts, sending its shares down 4% in late trading on Monday. *Cimarex (NYSE: XEC)* said it could lose up to 7% of its first-quarter production. 

_*OPEC cuts U.S. shale forecast.*_ OPEC downgraded its assessment of U.S. shale production for 2021, expecting a contraction of 140,000 bpd, a bit deeper than what the EIA foresees. The lack of shale growth gives OPEC+ more room and leverage to unwind production cuts and regain market share. 

_*Bullish forecasts start to multiply. *_Several investment banks came out with bullish crude oil forecasts. Goldman sees Brent averaging $70 in the second quarter and $75 in the third quarter. Morgan Stanley sees $70 by the third quarter. Socar Trading SA says oil could hit $80 this year. 

_*Saudi and Russia disagree on strategy. *_OPEC+ will soon decide on the next steps regarding their massive production cuts, and Riyadh and Moscow disagree on the strategy. The Saudis want to mostly stay the course and allow prices to rise, while Russia is keen to increase production. At the same time, Saudi Arabia suggested it would reverse the 1 mb/d of voluntary cuts it announced in January.

_*Eni aims for net-zero by 2050.*_* Eni (NYSE: E) *said it would fully decarbonize by 2050, but will still increase oil and gas production through the mid-2020s.

_*Exxon pressured to announce net-zero goal. *_Activist investor Engine No. 1 called on *ExxonMobil (NYSE: XOM)* to revamp its board and announce a net-zero goal. “This is not just a climate issue but a fundamental investor issue—no different than capital allocation or management compensation—given the immense risk to Exxon Mobil’s current business model in a rapidly changing world,” San Francisco-based Engine No. 1 wrote in a letter sent to the company.

_*Petrobras sinks after Bolsonaro sacks CEO.*_ Brazilian President Jair Bolsonaro fired the chief executive of state-owned *Petrobras (NYSE: PBR)*, scapegoating him for rising domestic fuel prices. Investors did not like the move – Petrobras’ stock was down more than 22% as markets opened on Monday. Investors are interpreting the move as an abandonment of the market-based stewardship of Petrobras. 

_*Is another LNG glut looming?*_ A tight LNG market could prompt a new wave of an investment super-cycle in LNG projects. However, a possible new wave of strong investment in LNG could create a massive glut later this decade if most of the planned or proposed projects move forward.

_*Occidental posts large loss.*_ *Occidental Petroleum (NYSE: OXY) *reported a $731 million loss for the fourth quarter, compared to a $269 million loss from a year earlier. Its shares fell 4% in after-hours trading.






jog on
duc


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## ducati916 (25 February 2021)

There is so much news/opinion out there today:

Start with Rosie:









						David Rosenberg: «We’re Getting Closer to a Breaking Point»
					

David Rosenberg, Chief Economist & Strategist of Rosenberg Research, worries that the surge in bond yields threatens the economic recovery. He warns of the consequences of today’s massive debt volumes and explains why he spots investment opportunities in the commodity sector and in Asia.




					themarket.ch
				




Definitely one of the better economists out there.

The BTD are out in full force today. Are they right?






Hard to say definitively. VIX may bounce higher or break lower. Your choice.

PUT buying higher:






Energy still leading






This is the important chart re. is it a correction or the top?






It is a correction.

Mr flippe-floppe-flye:






Is (obviously) of the opinion that this is now time to BTD.

I'm agnostic at this point. 






But based on Corporates:






Time to jump back in.

jog on
duc


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## ducati916 (25 February 2021)

There has been and will likely continue to be a significant rotation:

Value shares are outperforming growth shares. This is (likely) due to the building inflationary pressures which have had the 10yr hit 1.3% and moving (fast) towards 1.5% and likely on to 2%.






As such MOMO is also under pressure:

Which is most responsible for the current correction.






jog on
duc


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## ducati916 (26 February 2021)

*THE CORRECTION JUST BECAME MORE SERIOUS: TIME TO FULLY HEDGE OR EXIT*


Short term yields have jumped 43%.

Something is seriously amiss. The 10yr has already hit 1.5%.











Signs of stress everywhere:













She was one of the Go-Go managers. Looking ugly.

My model for the 10yr is now showing 1.6%. At this rate, that could be tomorrow. Whether there has been a credit event, as yet undisclosed or just a sudden risk off, can't say, but it doesn't really matter, the effect is the same.

Now is the time to play defence.

Meanwhile, Mr flippe-floppe-flye













jog on
duc


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## Smurf1976 (26 February 2021)

ducati916 said:


> THE CORRECTION JUST BECAME MORE SERIOUS: TIME TO FULLY HEDGE OR EXIT



Just clarifying what kind of serious you're referring to?

Serious as in you're thinking the major stock indices drop modestly, say 10%, then it's on with the bull?

Or serious as in the bull's over, here comes a test of the lows from 2020 kind of serious?

Just not sure how to interpret your comment really....


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## ducati916 (26 February 2021)

Smurf1976 said:


> Just clarifying what kind of serious you're referring to?
> 
> Serious as in you're thinking the major stock indices drop modestly, say 10%, then it's on with the bull?
> 
> ...





Serious.

When short term rates jump to that degree, there is (usually) a major issue hiding somewhere. It doesn't always appear immediately, but with the 10yr marching lower relentlessly, something seems to be seriously amiss.

I have been 100% market neutral for weeks now as the underlying breadth has been deteriorating, but that is simply a correction in an ongoing bull market. 

This current jump in short term rates is (potentially) something else again, essentially a credit event.






The big Mutual Funds can't go short, so they move to the defensive end of the market:










There is some serious risk off happening today.

Market crash? Distinctly possible.

jog on
duc


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## qldfrog (26 February 2021)

Mr Ducati,
What is your view on the USD vs AUD/NZD?
For year i have successfully edged my ASX shares focussed system with USD exposure and PM
Roughly:  ASX down , USD up.
And overall wealth ok
Last 2 weeks ,even before last night has been a disaster with USD crashing coupled with both mistakes and "bad luck". So a shxxy week from finance to just life.Sxxt happens, but got it in truckload in the last 10 days...
I winged about it in my journal....

More seriously, in the current context, i am really puzzled by the currency play
AUD was 58c at the end of March 2020 and 80c yesterday
That is a 37% increase in less than a year...
Noone seems to really notice.not in the news or yahoo finance..all about Zoom and Tesla
US market did well in the past year hardly break even with USD fall
Hopefully it will revert if we have a crash as people flee to so called USD safety, but not a given with the abysmal US deficit.
What is your take?
As a note
I always see wealth not within a country context but in a world context.

And by default so far, this means USD
So RE+shares+cash+PM(+BTC😊) in USD 
Hope this is still relevant to your thread.if not ask me and i will delete


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## ducati916 (26 February 2021)

qldfrog said:


> Mr Ducati,
> What is your view on the USD vs AUD/NZD?
> For year i have successfully edged my ASX shares focussed system with USD exposure and PM
> Roughly:  ASX down , USD up.
> ...





The AUD is a commodities based currency. When commodities are moving higher so are AUD/CAD. DXY moves inversely or lower.

In a market crash, usually, DXY trades higher.

If we are going to get a 'crash' event, it is likely around an inflation based fear, which may mean DXY does not rally and AUD/CAD continue higher. A credit event would normally see DXY rally. I have no idea of the 'why' currently. Shoot first ask questions later.

jog on
duc


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## ducati916 (26 February 2021)

And:







jog on
duc


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## peter2 (26 February 2021)

Very pleased to see some of the market froth blown away last night. There's still plenty to more to go. This selloff is good test of the resolve of the bulls. Will be very interested to see if there's solid buying tonight in the US or do they hide and think about things over the week-end. 

Flabbergasted to see GME up so much premarket last night and pleased to see that my broker allowed me to short it. 

I'm sitting here waiting for the ASX to reverse. I'm surprised that it hasn't yet. Downward momentum slowing, but it hasn't paused, let alone reversed. My third attempt at trading the reversal just triggered (6670). I'll need at least 20pts to break even.


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## ducati916 (26 February 2021)

Futures looking nasty:






jog on
duc


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## gartley (26 February 2021)

Smurf1976 said:


> Just clarifying what kind of serious you're referring to?
> 
> Serious as in you're thinking the major stock indices drop modestly, say 10%, then it's on with the bull?
> 
> ...



Back in the third week of January I posted this long term delta chart which suggested a key reversal Feb/March plus or minus a few months. This long term chart has stood the test of time since I started using this approach in 2004. I also posted these other charts below too as I thought there was a lot coming together in terms of confluence.
Taking the Delta chart at face value ( if the cycle solution is correct)  then this decline may persit till early to mid 2022 if in fact cycle point red 10 has been established.  Also of confluence is the Fibonacci/Lucas time counts where a number of significent time cycles come togther this month for the SPX.
That is the time side of things, now what about price? I have created this long term geometric chart. It all "starts with one line". I joined the 2003 bottom to the 2007 top and extended it into the future. After cloning this line I have drawn a parallel to the 2000 top. Lastly I have drawn an equidistant parallel line below. This last line is a thing of beauty, it has acted as support for almost every correction since the 2009 bull began. More importantly price has now just reached the original middle line extention and looks like after briefly throwing over  is  reacting away from it, so obviously these lines are very important with respect to how price interacts with them.

Now before I get to far ahead of myself, I should note that I had a price projection of between 4150 to 4350 for ther SPX. The minimum of this has not been met and my projections are met or exceeded 76% of the time and we only reached 4000. So given the Delta time analysis is accuarte to only plus or minus a few bars (months) on this chart it's plausible it might have another crack at trying to meet that projection. But also it could be that the projection also gets invalidated and this would be shown by price crossing back down below the centered moving avarages I use in my Price Projection routine. That has not happened yet. If the correction continues it may set up a new downside projection. The shorter term 5W cycle has already set up a downside projection of 3766-3777. No doubt lower projections may come along next week.


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## ducati916 (27 February 2021)

EOW and EOM:






Yesterday's Bond sell-off:






The stock market will (seemingly) recover. BTD will once again work. However, under cover, the market is if not broken, near to being broken. The recovery will embolden risk on and leverage. The 10yr is now headed to 1.6%. There may well be a cooling off period, but unless the Fed. steps in with curve control, the 10yr marches higher. I now suspect that 2% rather than 3% is a breaking point.

Junk turns downward. A blip? We'll see. An early warning? We'll see.






VIX remains elevated in both Corporates and Stocks. Again, might go higher, might go lower moment.










Unless 'something else' happens, this is a short-term BTD. Monday may open with a minor sell-off, but we are likely to trade higher.






So a number of articles re. the return of day trading a la the 1999 era:











						How To Make A Million Dollars Day Trading - A Teachable Moment
					






					tonyisola.com
				






			Bloomberg - Are you a robot?
		


Day trading in volume, certainly adds to market vol. With added vol. there is an increase in algo. trading as they love vol. Bigger and faster swings could be the norm for a while.

Mr flippe-floppe-flye:







Gold:

Has obviously been hammered due to rising rates. With rates now targeting 1.6%, it is unlikely that gold will be rallying any time soon. Of course, if the Fed. fix the curve, gold will explode higher.







DXY:

I would expect a bounce and DXY to trade higher. Currencies are a tricky business as there are just so many variables. A reversion trade looks possible in the short term.






jog on
duc


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## qldfrog (27 February 2021)

and last night for a "kind of" first time in the last weeks, oil went down  in a measurable way, was still climbing yesterday...


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