(Bull) Market June 2021
- Thread starter ducati916
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@qldfrog, Duc's posts are compulsive reading for me each morning & throughout the day as it gives me a perspective of the U.S. markets. His most recent post (above) gives me concern. I'm sure there will be more posts to come on the subject. Duc is the master of seeding, expressing his views succinctly in a few words or a single passage or two.
I love this capture
If trading is to be explained with a picture instead of words this would be it.
Skate.
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So a bit choppy in the early going with SPY down early but bouncing and now moving nowhere.
VIX:
From here I think the VIX calms. Which should mean stocks generally move higher.
Tech. is struggling atm. This sector is holding the broader market down as we have some really major caps in there, GOOG, AMZN, MSFT, etc. All of those sectors are lagging.
Inflation ticking higher.
Probably driven by the major run in oil that we have had this week.
In response Yields back up:
Which of course all of our Tech. based stocks hate. Now yields have been trading sideways in a pretty tight band for a while. The Fed. doesn't want higher yields, but just how active they are in the market, tick-by-tick, who knows. Therefore yields could rise short term, which is probably not great for the market overall, very skittish currently. This chop could continue for quite some time.
DeFi. Full article: https://www.wsj.com/articles/defi-i...ket-boomand-its-recent-volatility-11622712602
Certainly bullish for the crypto craze. Thing is which ones first survive, then which thrive. The powers that be cannot like this. I guess the question is what can they do? So for the moment, BTC is not going to zero.
Mr flippe-floppe-flye:
Meme stocks are a thing, but you would have to live on the various message boards to keep track of these.
It is having a broad effect: Short sellers of AMC are estimated to showing losses of $2.77B on Wednesday alone and total losses of $5.22B. Of GMC currently for 2021 $7B+.
Take AMC: not only has the stock speculation run rampant, but through the stock price rising, AMC could sell stock and recapitalise, so the bonds rose from the dead:
The flow on effect is even being felt in the bond market. Overall then there is a quantifiable effect, which looks set to continue.
Speaking of the Bond market:
Want a Bull market? How about Brazil?
The market as a whole is somewhat trendless currently in the shorter timeframes. Whether it can re-establish the longer time frame trend remains to be seen. There are a number of newer variables that seem to be pretty reckless and impervious to risk, whether they survive or thrive remains to be seen. However currently they are a 'thing' and are having a market impact.
Then we have the Fed. withdrawing 'life-support' as the market is deemed 'healthy'. Not sure about that. The major caps. probably. The mid down through small (if they could even access Fed. support) maybe not so much so.
Then we have the yes/no inflation question and whether Bond yields will rise and if they do rise, will the Fed YCC or Twist? Currently it looks like Twist. Is that enough? Rising rates will kill this market. At 3% its over. Possibly even 2.5%
My model predicts 1.57%. Yesterday we were 1.59%. Obviously today we are trading higher. Technically, we sit on the cusp.
Oil. Who knows what happens here. Looks to be moving higher longer term. Short term we might pull-back slightly as we have had quite a run.
DXY having a price spike higher. Off sets the POO rise for the moment. We have reached that support level that has held in the past. This could well be short covering, taking profits. The test will come in the next couple of weeks. Personally I remain short DXY. I think we break that long term support and DXY heads lower.
The 'pattern' seems to be: quick runs higher, profit taking and the trend (for the most part) re-establishes itself. You either have to be really nimble or suffer the quite regular loss of open profits, fingers crossed that it is profit taking and not a collapse. For the moment this is a price target market.
jog on
duc
VIX:
From here I think the VIX calms. Which should mean stocks generally move higher.
Tech. is struggling atm. This sector is holding the broader market down as we have some really major caps in there, GOOG, AMZN, MSFT, etc. All of those sectors are lagging.
Inflation ticking higher.
Probably driven by the major run in oil that we have had this week.
In response Yields back up:
Which of course all of our Tech. based stocks hate. Now yields have been trading sideways in a pretty tight band for a while. The Fed. doesn't want higher yields, but just how active they are in the market, tick-by-tick, who knows. Therefore yields could rise short term, which is probably not great for the market overall, very skittish currently. This chop could continue for quite some time.
DeFi. Full article: https://www.wsj.com/articles/defi-i...ket-boomand-its-recent-volatility-11622712602
Certainly bullish for the crypto craze. Thing is which ones first survive, then which thrive. The powers that be cannot like this. I guess the question is what can they do? So for the moment, BTC is not going to zero.
Mr flippe-floppe-flye:
Meme stocks are a thing, but you would have to live on the various message boards to keep track of these.
It is having a broad effect: Short sellers of AMC are estimated to showing losses of $2.77B on Wednesday alone and total losses of $5.22B. Of GMC currently for 2021 $7B+.
Take AMC: not only has the stock speculation run rampant, but through the stock price rising, AMC could sell stock and recapitalise, so the bonds rose from the dead:
The flow on effect is even being felt in the bond market. Overall then there is a quantifiable effect, which looks set to continue.
Speaking of the Bond market:
Want a Bull market? How about Brazil?
The market as a whole is somewhat trendless currently in the shorter timeframes. Whether it can re-establish the longer time frame trend remains to be seen. There are a number of newer variables that seem to be pretty reckless and impervious to risk, whether they survive or thrive remains to be seen. However currently they are a 'thing' and are having a market impact.
Then we have the Fed. withdrawing 'life-support' as the market is deemed 'healthy'. Not sure about that. The major caps. probably. The mid down through small (if they could even access Fed. support) maybe not so much so.
Then we have the yes/no inflation question and whether Bond yields will rise and if they do rise, will the Fed YCC or Twist? Currently it looks like Twist. Is that enough? Rising rates will kill this market. At 3% its over. Possibly even 2.5%
My model predicts 1.57%. Yesterday we were 1.59%. Obviously today we are trading higher. Technically, we sit on the cusp.
Oil. Who knows what happens here. Looks to be moving higher longer term. Short term we might pull-back slightly as we have had quite a run.
DXY having a price spike higher. Off sets the POO rise for the moment. We have reached that support level that has held in the past. This could well be short covering, taking profits. The test will come in the next couple of weeks. Personally I remain short DXY. I think we break that long term support and DXY heads lower.
The 'pattern' seems to be: quick runs higher, profit taking and the trend (for the most part) re-establishes itself. You either have to be really nimble or suffer the quite regular loss of open profits, fingers crossed that it is profit taking and not a collapse. For the moment this is a price target market.
jog on
duc
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Is a corrrecion looming?
Porper
Ralph Nelson Elliott
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My issue is that the rally off the 2009 lows looks corrective in nature. An expanded flat pattern would mean further strength...possibly for several years before another crash like scenario. For now just trading what's in front of me. Strength in the Aussie market is selective though. False breakouts are still an issue.
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It's not any easy wave count and there are multipile intepretations. One being that the advance from 2009 is corrective probably a B wave . It may have a little further to run ( and maybe not), but what follows will be impulsive, to the downside.
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As we move into the end of the short week, this quote seems particularly appropriate:
It is one of those markets currently.
Sentiment:
Mr flippe-floppe-flye:
jog on
duc
It is one of those markets currently.
Sentiment:
Mr flippe-floppe-flye:
jog on
duc
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Worth a watch.
jog on
duc
jog on
duc
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Ending the shortened week:
Pretty self explanatory.
The 2 top performing sectors are essentially 'inflation' sectors. An article summarising the 1970's inflation:
The problem of course is that there are 2 terrible choices. Deflation or Inflation. Of the 2, inflation is the less terrible. So we have the Fed. pursuing the lesser of 2 evils (in their opinion). A deflation, which is a widespread default of debt and bankruptcies is what actually needs to happen. The consequences in the short term would just be hideous due to decades of kicking-the-can down the road. To avoid this outcome, the Fed and all Central Banks in combination with Fiscal policy are pursuing a combination of monetary and MMT policies.
Mr flippe-floppe-flye:
A little bit of history on Mr flippe-floppe-flye. His blog started out in 2001 +/- and at that time he was known as 'Broker-A' and was located in New York. Currently he has relocated to Georgia. Anyway, he ditched that moniker and Broker-B with whom there were daily exchanges for 'The Fly' shortly afterwards. His blog, which the name of escapes me currently, eventually after a number of years was closed and iBankCoin, was launched. iBankCoin pursued a Quant based methodology which after a few years and many iterations has resulted in Stocklabs, to which he sells subscriptions.
There have been quite a few contributors over the years, one of the earliest was Danny who used to live here: https://spydercrusher.wordpress.com/ and when I first met him he was a San Diego university student into skateboarding. He at the time was into trading and developing a mechanical or quant based methodology, which he did, falling out with Mr flippe-floppe-flye along the way. The chap who has now been with him the longest is Mr Rajun Cajun, who I think owns a gym or chain of gyms in the southern US.
Some of you might remember (if you traded Options) the 'Option Addict' who also had a successful blog. He joined iBankCoin for a while and was a very popular contributor, his trading was very transparent and were swing trades using...Options. He in conjunction with Mr flippe-floppe-flye, put on a trading convention in Las Vegas several years ago, they might have done 2. Las Vegas is actually a hot spot for Prop. trading shops, Bright Trading HQ. there. One of the brothers who owns Bright plays poker after the markets close, as do a number of their traders.
So what was the purpose of this short history? I'll actually provide the answer in my trading thread.
For the moment at least, it seems that the market will end the week on a positive note, nicely up for the day. I would not expect any late day sell-offs.
jog on
duc
Pretty self explanatory.
The 2 top performing sectors are essentially 'inflation' sectors. An article summarising the 1970's inflation:
The problem of course is that there are 2 terrible choices. Deflation or Inflation. Of the 2, inflation is the less terrible. So we have the Fed. pursuing the lesser of 2 evils (in their opinion). A deflation, which is a widespread default of debt and bankruptcies is what actually needs to happen. The consequences in the short term would just be hideous due to decades of kicking-the-can down the road. To avoid this outcome, the Fed and all Central Banks in combination with Fiscal policy are pursuing a combination of monetary and MMT policies.
Mr flippe-floppe-flye:
A little bit of history on Mr flippe-floppe-flye. His blog started out in 2001 +/- and at that time he was known as 'Broker-A' and was located in New York. Currently he has relocated to Georgia. Anyway, he ditched that moniker and Broker-B with whom there were daily exchanges for 'The Fly' shortly afterwards. His blog, which the name of escapes me currently, eventually after a number of years was closed and iBankCoin, was launched. iBankCoin pursued a Quant based methodology which after a few years and many iterations has resulted in Stocklabs, to which he sells subscriptions.
There have been quite a few contributors over the years, one of the earliest was Danny who used to live here: https://spydercrusher.wordpress.com/ and when I first met him he was a San Diego university student into skateboarding. He at the time was into trading and developing a mechanical or quant based methodology, which he did, falling out with Mr flippe-floppe-flye along the way. The chap who has now been with him the longest is Mr Rajun Cajun, who I think owns a gym or chain of gyms in the southern US.
Some of you might remember (if you traded Options) the 'Option Addict' who also had a successful blog. He joined iBankCoin for a while and was a very popular contributor, his trading was very transparent and were swing trades using...Options. He in conjunction with Mr flippe-floppe-flye, put on a trading convention in Las Vegas several years ago, they might have done 2. Las Vegas is actually a hot spot for Prop. trading shops, Bright Trading HQ. there. One of the brothers who owns Bright plays poker after the markets close, as do a number of their traders.
So what was the purpose of this short history? I'll actually provide the answer in my trading thread.
For the moment at least, it seems that the market will end the week on a positive note, nicely up for the day. I would not expect any late day sell-offs.
jog on
duc
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Market wrap:
Cryptos:
While that is obviously true, it just doesn't feel that way.
Oil:
Oil news:
WTI is testing the $70 threshold, and the oil bulls are out in full force this week.
Oil Prices Poised For A Breakout As WTI Nears $70. Oil prices were rising early on Friday and headed to a second consecutive week of gains after the U.S. signaled that there may not be an imminent announcement of an agreement for the United States and Iran to return to the Iranian nuclear deal.
More room to run. “The fact that oil prices maintain and even extend a bit their high levels this week is a clear sign that the market considers a $70 plus dollar level sustainable for a barrel of oil,” Louise Dickson of Rystad Energy said in a statement.
Canada’s oil sands braces for investor pressure. In the wake of the ExxonMobil (NYSE: XOM) defeat by Engine No. 1, Canadian oil producers – which on average emit more than U.S.-based companies – are bracing for heightened pressure from shareholders to cut emissions. “By my calculation, about half of all Canadian (oil) production is now backed by a net-zero pledge of some type,” one analyst told the Financial Post. A Citibank analyst said: “The goal posts are moving, or evolving.”
Biden suspends ANWR leasing. The Biden administration suspended new leases in the Arctic National Wildlife Refuge, halting a process put in motion by the Trump administration. There was only tepid interest in a January auction from the industry. Alaskan officials decried the move, and it could spark litigation, but the time-consuming process likely keeps ANWR off the table for the foreseeable future.
Rystad: Last big year for oil state revenues. Global petrostate revenues could reach $975 billion this year, but it will be the last year that revenues approach the $1 trillion mark as the energy transition takes hold. “As the energy transition ramps up, countries highly dependent on tax revenue from the upstream industry may have no other option than to diversify their economy to sustain state budgets,” Rystad analysts said.
Colombian Oil Production Slips Amid Deadly Protests. An existing security crisis, anti-government protests, and road blockades are impacting economic activity and the petroleum industry putting Colombia’s crucial economic recovery is at risk. The current political turmoil has seen fuel shortages emerge in many parts of Colombia further constraining economic activity and oil industry operations in the affected regions.
LNG prices rise on strong demand. Asian spot prices for LNG rose for a second consecutive week and touched their highest since January, pushed higher by strong demand in China and Europe, according to Reuters.
LNG trade rose to record in 2020. Global trade volumes for LNG hit a record high in 2020, although the pace of growth slowed due to the pandemic.
Biden wraps up EV supply chain review. The Biden administration is putting the finishing touches on a review of the EV supply chain, which looks at critical minerals, and the results could be unveiled next week.
SunPower sees 100 million solar rooftop market. “There’s about 100 million people in the U.S. that, if they switched over to solar tomorrow, would save money,” said SunPower’s (NASDAQ: SPWR) CEO Peter Faricy.
Ford produces more electric mustangs than gasoline. Ford (NYSE: F) built 27,816 electric Mustang Mach-E models in the first quarter, and only 26,089 gasoline-powered versions of the Mustang, the first time that electric models outstripped traditional ones for the company.
Iran investigates explosions. An explosion at an oil refinery in Tehran and a fire on board one of Iran’s navy ships that led to its sinking occurred this week.
ExxonMobil surrenders Ghana interests. ExxonMobil (NYSE: XOM) gave up its 80% interest in offshore blocks in Ghana, “prioritising near-term capital spend on the most advantaged assets with the lowest cost of supply in the portfolio,” a spokesperson said.
Engine No. 1 secures third seat. Engine No. 1 saw a third of its four candidates elected to ExxonMobil’s (NYSE: XOM) board, after a tight vote count.
Chevron open to selling Canadian assets. Chevron (NYSE: CVX) said it would consider selling its 20% stake in Canadian oil sands mines amid investor pressure to cut emissions.
EU looking at climate tariff. The European Union is planning to put a carbon tariff on steel, cement, and aluminum produced in countries with lower environmental standards.
Dominion builds offshore wind ship. Dominion (NYSE: D) is building a ship capable of installing offshore wind turbines. The Jones Act is a century-old law that requires goods transported between two U.S. ports to be carried by a U.S. ship and manned by a U.S. crew. The new Dominion ship would be the first ship to comply with the law, and could be a “game-changer” for the offshore wind industry in the U.S.
Weatherford International relists. Shares of Weatherford International (NASDAQ: WFRD), once the world’s fourth-largest oil-field services company before being felled by an oil bust, relisted on the NASDAQ this week.
Oilfield services margins could improve with company exits. With smaller U.S. oilfield service companies going out of business, margins for the sector could improve. “Weaker and lower-tech competitors are struggling to get work. They offer very low prices, and not prices they can sustain for the long-term. We do not match those prices,” Chris Wright, CEO of Liberty Oilfield Services (NYSE: LBRT), told Reuters.
Nothing new under the sun:
jog on
duc
Cryptos:
While that is obviously true, it just doesn't feel that way.
Oil:
Oil news:
WTI is testing the $70 threshold, and the oil bulls are out in full force this week.
Oil Prices Poised For A Breakout As WTI Nears $70. Oil prices were rising early on Friday and headed to a second consecutive week of gains after the U.S. signaled that there may not be an imminent announcement of an agreement for the United States and Iran to return to the Iranian nuclear deal.
More room to run. “The fact that oil prices maintain and even extend a bit their high levels this week is a clear sign that the market considers a $70 plus dollar level sustainable for a barrel of oil,” Louise Dickson of Rystad Energy said in a statement.
Canada’s oil sands braces for investor pressure. In the wake of the ExxonMobil (NYSE: XOM) defeat by Engine No. 1, Canadian oil producers – which on average emit more than U.S.-based companies – are bracing for heightened pressure from shareholders to cut emissions. “By my calculation, about half of all Canadian (oil) production is now backed by a net-zero pledge of some type,” one analyst told the Financial Post. A Citibank analyst said: “The goal posts are moving, or evolving.”
Biden suspends ANWR leasing. The Biden administration suspended new leases in the Arctic National Wildlife Refuge, halting a process put in motion by the Trump administration. There was only tepid interest in a January auction from the industry. Alaskan officials decried the move, and it could spark litigation, but the time-consuming process likely keeps ANWR off the table for the foreseeable future.
Rystad: Last big year for oil state revenues. Global petrostate revenues could reach $975 billion this year, but it will be the last year that revenues approach the $1 trillion mark as the energy transition takes hold. “As the energy transition ramps up, countries highly dependent on tax revenue from the upstream industry may have no other option than to diversify their economy to sustain state budgets,” Rystad analysts said.
Colombian Oil Production Slips Amid Deadly Protests. An existing security crisis, anti-government protests, and road blockades are impacting economic activity and the petroleum industry putting Colombia’s crucial economic recovery is at risk. The current political turmoil has seen fuel shortages emerge in many parts of Colombia further constraining economic activity and oil industry operations in the affected regions.
LNG prices rise on strong demand. Asian spot prices for LNG rose for a second consecutive week and touched their highest since January, pushed higher by strong demand in China and Europe, according to Reuters.
LNG trade rose to record in 2020. Global trade volumes for LNG hit a record high in 2020, although the pace of growth slowed due to the pandemic.
Biden wraps up EV supply chain review. The Biden administration is putting the finishing touches on a review of the EV supply chain, which looks at critical minerals, and the results could be unveiled next week.
SunPower sees 100 million solar rooftop market. “There’s about 100 million people in the U.S. that, if they switched over to solar tomorrow, would save money,” said SunPower’s (NASDAQ: SPWR) CEO Peter Faricy.
Ford produces more electric mustangs than gasoline. Ford (NYSE: F) built 27,816 electric Mustang Mach-E models in the first quarter, and only 26,089 gasoline-powered versions of the Mustang, the first time that electric models outstripped traditional ones for the company.
Iran investigates explosions. An explosion at an oil refinery in Tehran and a fire on board one of Iran’s navy ships that led to its sinking occurred this week.
ExxonMobil surrenders Ghana interests. ExxonMobil (NYSE: XOM) gave up its 80% interest in offshore blocks in Ghana, “prioritising near-term capital spend on the most advantaged assets with the lowest cost of supply in the portfolio,” a spokesperson said.
Engine No. 1 secures third seat. Engine No. 1 saw a third of its four candidates elected to ExxonMobil’s (NYSE: XOM) board, after a tight vote count.
Chevron open to selling Canadian assets. Chevron (NYSE: CVX) said it would consider selling its 20% stake in Canadian oil sands mines amid investor pressure to cut emissions.
EU looking at climate tariff. The European Union is planning to put a carbon tariff on steel, cement, and aluminum produced in countries with lower environmental standards.
Dominion builds offshore wind ship. Dominion (NYSE: D) is building a ship capable of installing offshore wind turbines. The Jones Act is a century-old law that requires goods transported between two U.S. ports to be carried by a U.S. ship and manned by a U.S. crew. The new Dominion ship would be the first ship to comply with the law, and could be a “game-changer” for the offshore wind industry in the U.S.
Weatherford International relists. Shares of Weatherford International (NASDAQ: WFRD), once the world’s fourth-largest oil-field services company before being felled by an oil bust, relisted on the NASDAQ this week.
Oilfield services margins could improve with company exits. With smaller U.S. oilfield service companies going out of business, margins for the sector could improve. “Weaker and lower-tech competitors are struggling to get work. They offer very low prices, and not prices they can sustain for the long-term. We do not match those prices,” Chris Wright, CEO of Liberty Oilfield Services (NYSE: LBRT), told Reuters.
Nothing new under the sun:
jog on
duc
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So as we draw closer to Basel 3 and the closing of the paper gold/silver (and other manipulated paper markets) how sits the situation:
The markets are not yet reflecting the re-pricing that will eventuate. The gold market has started to move, but is still not a free market. The COT numbers are however reflecting the two separate markets, Gold is moving Silver is stuck (currently).
Look at the OI numbers. In the gold market +/- 50% reduction which is being reflected in the bounce higher in gold. Silver's OI numbers are still the same. However, as gold reprices, so will silver.
The war between the US and the China/Russia axis for control of hegemony of money and toppling the DXY from its primary place atop the reserve currencies is well under way.
Both Russia and China have been buying physical gold in the thousands of tons. So much so that monetary gold is largely concentrated in their Central Banks. BIS, responsible for enforcing Basel 3, was as rumour has it threatened by Mr Putin that if they didn't enforce the Basel 3 regulations, then both Russia and China would back their currencies with their gold reserves.
That essentially would have been the end of DXY. Poof, zero.
So the BIS is going to enforce Basel 3...for real, which means the end of the paper gold market. Now I have heard all manner of price projections for gold moving forward, suffice to say, it will be higher.
There is actually a broad spectrum of commodities that will also benefit from these regulations when they come into effect 28 June 2021. I haven't had time to dig into all of the documents and the language is banker jargon x5.
So currently I like Gold/Silver and commodities generally long, DXY short and stocks not a great deal. There is a really nasty divergence signal playing out in the S&P500 atm. Whether it takes hold, we'll have to see, but I'm keeping a close eye on it.
Meanwhile, Mr flippe-floppe-flye is still playing the crypto markets:
Beyond pathetic.
If you haven't read the GS Report, well worth a read. As the paper gold market ends, so the paper crypto market begins. If history teaches anything, BTC is now doomed to lacklustre performance going forward as JPM's Jamie Dimon et al crush it.
jog on
duc
The markets are not yet reflecting the re-pricing that will eventuate. The gold market has started to move, but is still not a free market. The COT numbers are however reflecting the two separate markets, Gold is moving Silver is stuck (currently).
Look at the OI numbers. In the gold market +/- 50% reduction which is being reflected in the bounce higher in gold. Silver's OI numbers are still the same. However, as gold reprices, so will silver.
The war between the US and the China/Russia axis for control of hegemony of money and toppling the DXY from its primary place atop the reserve currencies is well under way.
Both Russia and China have been buying physical gold in the thousands of tons. So much so that monetary gold is largely concentrated in their Central Banks. BIS, responsible for enforcing Basel 3, was as rumour has it threatened by Mr Putin that if they didn't enforce the Basel 3 regulations, then both Russia and China would back their currencies with their gold reserves.
That essentially would have been the end of DXY. Poof, zero.
So the BIS is going to enforce Basel 3...for real, which means the end of the paper gold market. Now I have heard all manner of price projections for gold moving forward, suffice to say, it will be higher.
There is actually a broad spectrum of commodities that will also benefit from these regulations when they come into effect 28 June 2021. I haven't had time to dig into all of the documents and the language is banker jargon x5.
So currently I like Gold/Silver and commodities generally long, DXY short and stocks not a great deal. There is a really nasty divergence signal playing out in the S&P500 atm. Whether it takes hold, we'll have to see, but I'm keeping a close eye on it.
Meanwhile, Mr flippe-floppe-flye is still playing the crypto markets:
Beyond pathetic.
If you haven't read the GS Report, well worth a read. As the paper gold market ends, so the paper crypto market begins. If history teaches anything, BTC is now doomed to lacklustre performance going forward as JPM's Jamie Dimon et al crush it.
jog on
duc
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Start of the week meh. But, potentially going to get worse before it gets better:
DXY again weak.
Cryptos either weak or going nowhere for the moment. They just had their big conference in Miami this w/e. I watched a few of the speakers, Mr Saylor in particular. He addressed the energy requirements, as if that was a big deal. It would seem that I was not the only one unimpressed.
Staying on the BTC theme for the moment:
The chart below is the cost of a BTC transaction.
The 'Tethers' that are supposed to be $1: 1 Tether are anything but. Below is the actual breakdown of 1 Tether. This is important because Tethers provide liquidity for the trading of crypto. When your liquidity dries up, guess what happens to price?
VIX setting up for a move higher:
Mr flippe-floppe-flye:
Housing:
In this 'inflationary' environment:
The market overall looks shakey. Not a massive drop, just this continued chop, going nowhere in particular. It lacks conviction to move higher. XLRE is by far the strongest sector currently.
jog on
duc
DXY again weak.
Cryptos either weak or going nowhere for the moment. They just had their big conference in Miami this w/e. I watched a few of the speakers, Mr Saylor in particular. He addressed the energy requirements, as if that was a big deal. It would seem that I was not the only one unimpressed.
Staying on the BTC theme for the moment:
The chart below is the cost of a BTC transaction.
The 'Tethers' that are supposed to be $1: 1 Tether are anything but. Below is the actual breakdown of 1 Tether. This is important because Tethers provide liquidity for the trading of crypto. When your liquidity dries up, guess what happens to price?
VIX setting up for a move higher:
Mr flippe-floppe-flye:
Housing:
In this 'inflationary' environment:
The market overall looks shakey. Not a massive drop, just this continued chop, going nowhere in particular. It lacks conviction to move higher. XLRE is by far the strongest sector currently.
jog on
duc
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Using the EOD close, the market looks quite weak.
VIX:
We have had trouble moving below this point on numerous occasions. I think tomorrow is another one of them.
The 2 NYMOs:
Not looking terribly confidence inspiring.
Junk bonds running to Treasury paper. This is ALWAYS a concern.
Lumbar:
BTC:
Mr flippe-floppe-flye:
jog on
duc
VIX:
We have had trouble moving below this point on numerous occasions. I think tomorrow is another one of them.
The 2 NYMOs:
Not looking terribly confidence inspiring.
Junk bonds running to Treasury paper. This is ALWAYS a concern.
Lumbar:
BTC:
Mr flippe-floppe-flye:
jog on
duc
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So today, another meh day in the indices. Chop.
Sectors:
Yields back down. Operation Twist is in full flow. Yields (for the moment at least) are not going to move meaningfully higher. That should be good for stocks, but they are really struggling.
Commodities generally higher. PMs marginally lower. With Basel 3 approaching, this might be the last gasp to suppress PMs. We'll see. I have big positions in gold miners and Sprott physical silver so not exactly unbiased here.
BTC getting smashed again. That $30K support level will be tested again. I don't think it holds this time. The HODLers have had plenty of time to talk it up, they had their conference in Miami at the w/e, Mr Saylor, perma-bull presented and still it is getting put under pressure. If (and it is an if) BTC breaks below that $30K then it is headed far lower.
Mr flippe-floppe-flye:
If that is your thing:
DXY having a 'bounce':
Probably accounts for the loss in PMs today. I remain short DXY.
DXY will be tied up in the upcoming Basel 3 regulations re. PMs and other commodities. This current support level is important. If it fails we are headed lower:
A lower DXY pari passu, means higher inflation. We know that the Fed. will not allow higher interest rates, sitting currently at 1.58% and will either Twist them lower (hold steady) or move to YCC in the extreme case. As all of this is being 'paid for' by monetary policy, combined with a profligate fiscal policy moving forward, inflation is the position.
The other big risk is that the zombies start to fail, kicking off a deflation. If, whatever product/services are sold by the zombies have their prices raised, due to inflationary pressures and they are not selling sufficient at lower prices, then there will be issues, solvency issues. Their debt, probably already Junk, will sell-off (which it is starting to currently) as a run on Treasuries ensues, taking yields lower.
Stocks do not like Bond market runs. The S&P500 has done pretty much nothing for a month. If the Junk continues to sell-off, I think we have a problem.
Currently:
Not looking too flash atm.
jog on
duc
Sectors:
Yields back down. Operation Twist is in full flow. Yields (for the moment at least) are not going to move meaningfully higher. That should be good for stocks, but they are really struggling.
Commodities generally higher. PMs marginally lower. With Basel 3 approaching, this might be the last gasp to suppress PMs. We'll see. I have big positions in gold miners and Sprott physical silver so not exactly unbiased here.
BTC getting smashed again. That $30K support level will be tested again. I don't think it holds this time. The HODLers have had plenty of time to talk it up, they had their conference in Miami at the w/e, Mr Saylor, perma-bull presented and still it is getting put under pressure. If (and it is an if) BTC breaks below that $30K then it is headed far lower.
Mr flippe-floppe-flye:
If that is your thing:
DXY having a 'bounce':
Probably accounts for the loss in PMs today. I remain short DXY.
DXY will be tied up in the upcoming Basel 3 regulations re. PMs and other commodities. This current support level is important. If it fails we are headed lower:
A lower DXY pari passu, means higher inflation. We know that the Fed. will not allow higher interest rates, sitting currently at 1.58% and will either Twist them lower (hold steady) or move to YCC in the extreme case. As all of this is being 'paid for' by monetary policy, combined with a profligate fiscal policy moving forward, inflation is the position.
The other big risk is that the zombies start to fail, kicking off a deflation. If, whatever product/services are sold by the zombies have their prices raised, due to inflationary pressures and they are not selling sufficient at lower prices, then there will be issues, solvency issues. Their debt, probably already Junk, will sell-off (which it is starting to currently) as a run on Treasuries ensues, taking yields lower.
Stocks do not like Bond market runs. The S&P500 has done pretty much nothing for a month. If the Junk continues to sell-off, I think we have a problem.
Currently:
Not looking too flash atm.
jog on
duc
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And so it came to be.
A rather bullish night last night with a small sell down towards the close, but still closing up somewhere around
+ 1.8%
1 month chart, 5 hour bars
Looking good on the oil long stance.
US Job openings also up 12% for April beating expectations by approximately the same amount.
Last edited:
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Roundup:
Oil news:
- More than half of Vietnam’s electricity comes from coal.
- But renewables are growing quickly, and now make up 5% of the total.
- Vietnam plans on adding nearly 18 GW of solar over this decade but will need to build out its grid capacity.
Market Movers
- Plains All American (NASDAQ: PAA) agreed to sell its natural gas storage assets to Hartree Partners for $850 million.
- Pembina Pipeline (NYSE: PBA) announced a partnership with the Haisla Nation to develop the $3 billion Cedar LNG project in British Columbia.
- KKR's Independence Energy and Contango Oil & Gas (NYSE:MCF) are near a merger deal that could value the new business at $5.5B including debt, Bloomberg reports.
Tuesday, June 8, 2021
Oil prices held their gains at the start of the week, with Brent at $71 and WTI just below $70 (after briefly touching that threshold on Monday). Analysts see investors pocketing gains at these roughly two-and-a-half-year highs, allowing the rally to take a breather.
Oil pauses at $70. “For many, the $70 per barrel oil signal may be enough for investors to cash out of the bull cycle early – likely what happened today -- which would stifle the upward price trajectory forecasted by our bullish crude balances,” said Louise Dickson, an analyst at Rystad Energy.
Options bets on $100 oil. Investors are scooping up options bets on crude that pay off if oil prices soar to $100 per barrel.
OPEC lost $1 trillion in the 2015 oil price crash. The members of OPEC lost a collective $1 trillion in foregone revenues during the last crisis in 2015 and 2016. With the Covid-19 crisis hitting the oil industry a lot harder than the 2014-2016 crisis, chances are the losses that OPEC producers suffered last year would be even greater than $1 trillion, but these are still being calculated.
G-7 backs climate disclosures. G-7 nations backed initiatives to force banks and companies to disclose their climate-related risks.
Shell case could affect TotalEnergies. The recent court case in the Netherlands that went against Royal Dutch Shell (NYSE: RDS.A) could be a warning to Total Energies SE (NYSE: TOT), the French oil giant that was known as Total until a rebranding last week. A French court is expected to make a decision on a similar case in September.
Rosneft warns of oil shortage. Rosneft warned that the global push towards energy transition could result in a supply shortage if there is too little upstream development for new oil supplies. “The world risks a severe deficit of oil and gas,” Rosneft CEO Igor Sechin said. “The world consumes oil, but isn’t ready to invest in it.”
Texas passes weatherization bill. The Texas legislature passed a bill that would require electricity providers to weatherize their assets, and it now goes to the Governor for consideration.
Higher oil prices boost M&A. Higher oil prices offer oil companies and private equity firms the opportunity to sell off U.S. shale assets. In the first five months of 2021, land deals have totaled $6.9 billion, nearly as much as the $7 billion in total deals for all of 2020.
Fiat announces EV-only transition. Fiat said it would sell only electric vehicles by 2030 and begin a phaseout of the internal combustion engine beginning in 2025.
Canada’s oil consolidation hits white-collar jobs. BNN Bloomberg looks at the loss of jobs among management in Canada’s oil and gas sector as the industry has consolidated in recent years.
U.S. LNG terminals looking at carbon capture. Under pressure from investors and the Biden administration, several U.S. LNG export facilities are exploring carbon capture. Virginia-based Venture Global LNG said it would implement carbon capture and sequestration at three export terminals in Louisiana. But 60% of a project’s emissions come from upstream and midstream – leaking methane at well sites and in pipelines.
LNG faces headwinds. U.S. LNG exports face multiple headwinds, including surplus supply, rising costs “fickle” demand, and surging Qatari investment, according to a new report.
BP CEO: Strong Oil Demand Growth Is Here To Stay. Global oil demand is set to rebound and remain robust for some time, BP’s chief executive Bernard Looney told Bloomberg News on the sidelines of an economic forum in Russia, reiterating views expressed by most forecasters and analysts. “There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined,” Looney said.
Pipeline regulator tells pipelines to prepare for methane regs. The Pipeline and Hazardous Materials Safety Administration (PHMSA) sent an advisory to oil and gas pipeline operators, telling them to prepare for methane curbs.
Enbridge sees big protests of Line 3. Indigenous communities and environmental activists blockaded sections of the Line 3 pipeline in northern Minnesota.
Carbon dioxide in the atmosphere hits a record high. The amount of carbon dioxide piling up in Earth’s atmosphere set a record last month, rising to 417 parts per million, the highest in human history.
DOE announces hydrogen “Earthshot.” The Department of Energy launched an “Earthshot” program to cut the costs of hydrogen to $1 per kilogram within a decade.
State Department says Nord Stream 2 “fait accompli.” U.S. Secretary of State Anthony Blinken called the completion of the Nord Stream 2 pipeline from Russia to Germany a “fait accompli” and said the U.S. is now working with Germany to limit how dependent Europe’s energy system will be on Russia after it is finished.
U.S. claws back millions from ransomware. The FBI has seized $2.3 million of the $4.4 million paid to the ransomware attackers of the Colonial Pipeline.
China’s Efforts To Curb Oil Prices Are Futile. Crude oil imports into China dropped by almost 15 percent annually last month. There is speculation that China is tapping its strategic reserve to tamp down on import costs, although it isn’t working.
How oil companies use bankruptcy law to avoid cleanup. Oil and gas companies use the bankruptcy process to shed liabilities. “It's basically bankruptcy for profit.” Here’s how they do it.
Full story here: https://www.marketwatch.com/story/h...the-colonial-pipeline-cyberattack-11623182259
While on the subject of BTC:
While on the subject of falling yields:
They have certainly slowed their rate of ascent however. We'll see how this pans out over the next few weeks. Certainly Operation Twist seems to be holding rates steady to lower currently.
The thing is, the Fed. doesn't want rates too low, just below inflation. The reason? Well if the market tanks and they need to cut rates again, it helps to have something to cut.
I again after looking at the EOD charts am thinking weakness tomorrow. Not a collapse, just more meh. VIX is a little lower, but, it refuses to go lower past those support levels. If it remains where it is, it will gradually build a base for a spike higher. Nothing major unless it is tied to an unexpected (news) development that was unexpected.
DXY remains key as far as inflation expectations are concerned. DXY is weak against many if not all of the commodity based currencies. It it has also broken key levels of support against the Russian Ruble, Chinese Yuan, and the South African Rand – which are three of the five BRICS Currency Index components. The Brazilian Real is currently a holdout. So the Fed. will be trying to balance the decline of DXY and rates. If both decline together then the rate of inflation accelerates, probably more than they would wish.
jog on
duc
Oil news:
- More than half of Vietnam’s electricity comes from coal.
- But renewables are growing quickly, and now make up 5% of the total.
- Vietnam plans on adding nearly 18 GW of solar over this decade but will need to build out its grid capacity.
Market Movers
- Plains All American (NASDAQ: PAA) agreed to sell its natural gas storage assets to Hartree Partners for $850 million.
- Pembina Pipeline (NYSE: PBA) announced a partnership with the Haisla Nation to develop the $3 billion Cedar LNG project in British Columbia.
- KKR's Independence Energy and Contango Oil & Gas (NYSE:MCF) are near a merger deal that could value the new business at $5.5B including debt, Bloomberg reports.
Tuesday, June 8, 2021
Oil prices held their gains at the start of the week, with Brent at $71 and WTI just below $70 (after briefly touching that threshold on Monday). Analysts see investors pocketing gains at these roughly two-and-a-half-year highs, allowing the rally to take a breather.
Oil pauses at $70. “For many, the $70 per barrel oil signal may be enough for investors to cash out of the bull cycle early – likely what happened today -- which would stifle the upward price trajectory forecasted by our bullish crude balances,” said Louise Dickson, an analyst at Rystad Energy.
Options bets on $100 oil. Investors are scooping up options bets on crude that pay off if oil prices soar to $100 per barrel.
OPEC lost $1 trillion in the 2015 oil price crash. The members of OPEC lost a collective $1 trillion in foregone revenues during the last crisis in 2015 and 2016. With the Covid-19 crisis hitting the oil industry a lot harder than the 2014-2016 crisis, chances are the losses that OPEC producers suffered last year would be even greater than $1 trillion, but these are still being calculated.
G-7 backs climate disclosures. G-7 nations backed initiatives to force banks and companies to disclose their climate-related risks.
Shell case could affect TotalEnergies. The recent court case in the Netherlands that went against Royal Dutch Shell (NYSE: RDS.A) could be a warning to Total Energies SE (NYSE: TOT), the French oil giant that was known as Total until a rebranding last week. A French court is expected to make a decision on a similar case in September.
Rosneft warns of oil shortage. Rosneft warned that the global push towards energy transition could result in a supply shortage if there is too little upstream development for new oil supplies. “The world risks a severe deficit of oil and gas,” Rosneft CEO Igor Sechin said. “The world consumes oil, but isn’t ready to invest in it.”
Texas passes weatherization bill. The Texas legislature passed a bill that would require electricity providers to weatherize their assets, and it now goes to the Governor for consideration.
Higher oil prices boost M&A. Higher oil prices offer oil companies and private equity firms the opportunity to sell off U.S. shale assets. In the first five months of 2021, land deals have totaled $6.9 billion, nearly as much as the $7 billion in total deals for all of 2020.
Fiat announces EV-only transition. Fiat said it would sell only electric vehicles by 2030 and begin a phaseout of the internal combustion engine beginning in 2025.
Canada’s oil consolidation hits white-collar jobs. BNN Bloomberg looks at the loss of jobs among management in Canada’s oil and gas sector as the industry has consolidated in recent years.
U.S. LNG terminals looking at carbon capture. Under pressure from investors and the Biden administration, several U.S. LNG export facilities are exploring carbon capture. Virginia-based Venture Global LNG said it would implement carbon capture and sequestration at three export terminals in Louisiana. But 60% of a project’s emissions come from upstream and midstream – leaking methane at well sites and in pipelines.
LNG faces headwinds. U.S. LNG exports face multiple headwinds, including surplus supply, rising costs “fickle” demand, and surging Qatari investment, according to a new report.
BP CEO: Strong Oil Demand Growth Is Here To Stay. Global oil demand is set to rebound and remain robust for some time, BP’s chief executive Bernard Looney told Bloomberg News on the sidelines of an economic forum in Russia, reiterating views expressed by most forecasters and analysts. “There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined,” Looney said.
Pipeline regulator tells pipelines to prepare for methane regs. The Pipeline and Hazardous Materials Safety Administration (PHMSA) sent an advisory to oil and gas pipeline operators, telling them to prepare for methane curbs.
Enbridge sees big protests of Line 3. Indigenous communities and environmental activists blockaded sections of the Line 3 pipeline in northern Minnesota.
Carbon dioxide in the atmosphere hits a record high. The amount of carbon dioxide piling up in Earth’s atmosphere set a record last month, rising to 417 parts per million, the highest in human history.
DOE announces hydrogen “Earthshot.” The Department of Energy launched an “Earthshot” program to cut the costs of hydrogen to $1 per kilogram within a decade.
State Department says Nord Stream 2 “fait accompli.” U.S. Secretary of State Anthony Blinken called the completion of the Nord Stream 2 pipeline from Russia to Germany a “fait accompli” and said the U.S. is now working with Germany to limit how dependent Europe’s energy system will be on Russia after it is finished.
U.S. claws back millions from ransomware. The FBI has seized $2.3 million of the $4.4 million paid to the ransomware attackers of the Colonial Pipeline.
China’s Efforts To Curb Oil Prices Are Futile. Crude oil imports into China dropped by almost 15 percent annually last month. There is speculation that China is tapping its strategic reserve to tamp down on import costs, although it isn’t working.
How oil companies use bankruptcy law to avoid cleanup. Oil and gas companies use the bankruptcy process to shed liabilities. “It's basically bankruptcy for profit.” Here’s how they do it.
Full story here: https://www.marketwatch.com/story/h...the-colonial-pipeline-cyberattack-11623182259
While on the subject of BTC:
While on the subject of falling yields:
They have certainly slowed their rate of ascent however. We'll see how this pans out over the next few weeks. Certainly Operation Twist seems to be holding rates steady to lower currently.
The thing is, the Fed. doesn't want rates too low, just below inflation. The reason? Well if the market tanks and they need to cut rates again, it helps to have something to cut.
I again after looking at the EOD charts am thinking weakness tomorrow. Not a collapse, just more meh. VIX is a little lower, but, it refuses to go lower past those support levels. If it remains where it is, it will gradually build a base for a spike higher. Nothing major unless it is tied to an unexpected (news) development that was unexpected.
DXY remains key as far as inflation expectations are concerned. DXY is weak against many if not all of the commodity based currencies. It it has also broken key levels of support against the Russian Ruble, Chinese Yuan, and the South African Rand – which are three of the five BRICS Currency Index components. The Brazilian Real is currently a holdout. So the Fed. will be trying to balance the decline of DXY and rates. If both decline together then the rate of inflation accelerates, probably more than they would wish.
jog on
duc
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So before we get to the market proper, you need to read this article and watch the 30sec. video.
Full article and video: https://blairbellecurve.com/seismic-shift/
So the market as I write this post:
Inflation. Two conflicting views:
The contra-case:
continued....
jog on
duc
Full article and video: https://blairbellecurve.com/seismic-shift/
So the market as I write this post:
Inflation. Two conflicting views:
The contra-case:
continued....
jog on
duc
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Part deux:
continued...
jog on
duc
continued...
jog on
duc
- Joined
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Part trois:
continued...
jog on
duc
continued...
jog on
duc
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Part quatre:
Mr flippe-floppe-flye:
So those are essentially the 2 arguments. Neither one mentions the DXY. Odd? Commodities are mentioned, as having no correlation to inflation at all, therefore, a non-event. I'll post up those charts later with some discussion.
Whichever way you lean, I think you'll need to decide as positioning for the longer term (short term traders don't really need to worry) could and probably will, make quite a difference. I'm thinking gold, silver, BTC, etc. as opposed to growth stocks, Tech et al.
More later, off to work!
jog on
duc
Mr flippe-floppe-flye:
So those are essentially the 2 arguments. Neither one mentions the DXY. Odd? Commodities are mentioned, as having no correlation to inflation at all, therefore, a non-event. I'll post up those charts later with some discussion.
Whichever way you lean, I think you'll need to decide as positioning for the longer term (short term traders don't really need to worry) could and probably will, make quite a difference. I'm thinking gold, silver, BTC, etc. as opposed to growth stocks, Tech et al.
More later, off to work!
jog on
duc
