(Bull) Market May 2021

[ducati916]

So we move into May. We know April followed the pattern.

I have seen so many blogoland posts re. 'Sell in May'. Possibly I'm looking for it (confirmation bias) or it just seems that it is a real thing atm. Looking at last year:

It was a thing last year too.

So back to this year:

The market is vulnerable, especially after this last April.


The VIX is in dangerous territory. Just waiting to spike higher.

Looking weak.

Now 2 days ago that reading was 13.7%. It has halved in 2 days. Not good.

Inflation not a thing currently. Rates still signalling higher.

Breadth still weak.

I spent the morning sorting out trades and making sure in the more vulnerable ones that they were hedged. You can see in the 'Swing Trades', there is a SPY short. That is actually a pretty major short, given the current weakness. Two of the new positions (TAN, NFLX) have suffered heavy sell-offs already and should fall less in a broad sell-off. I was going to add a lump of commodity exposure, but the markets closed before I got round to it.

Anyway, the point is: markets were really pathetic this last week. There were blow-out earnings from AMZN etc, yawn. Were they 'priced in', who knows. But when earnings come in x3 above expected and the stock sells off....sh*t ain't right.

Whether or not May is a clanger, just beware, this is now very much a shoot first ask questions later market.


jog on
duc

 

[ducati916]

A few more charts on the 'Sell in May' meme:

They pretty much speak for themselves.

The takeaway: no-one actually knows what will happen. Given that everyone is guessing frame it another way: if stocks were to rise, do you think they will rise a lot more? If stocks were to fall, do you think they would fall further than they might rise?

Or:

If there is a 65% probability that they rise 2%; or
A 35% probability they fall 8% (or use whatever data that you want from the historical data).

How do you want to be positioned?

jog on
duc

 

[ducati916]

Performance of the ETFs:

jog on
duc

 

[ducati916]

First trading day in May:

Energy & Materials lead the way. Everything else meh currently.

Yields come off slightly. My model has yields at 1.66%. Which is pretty much where they were Friday, now they are slightly lower.

Whether the loss in yield is responsible or they would have had a good day anyway, commodities are up across the board:

BTC seems to be moving higher. Broke 50EMA, retested, held. Looks good to move higher:

Mr flippe-floppe-flye:

So atm, all quiet on the Western Front.

jog on
duc

 

[ducati916]

Lots of new studies examining the 'Sell in May':

Over a really loooooong period:

This one is first half (of all months?) to the second half:

The rotation from growth to value:

The great commodities market:

Which brings us to today.

We currently have a run to safety: Bonds and DXY.

Pretty much a jog away from everything else:

BTC back in trouble:

Mr flippe-floppe-flye:

But we knew it was possible, even probable:

The VIX had bottomed and had been ticking higher for quite some time (daily charts). It was only a matter of when. When, might be now.


I would guess that we might see +/- 5% decline. The BTD brigade will probably buy this dip, which I think will fail. This might cause a minor panic and wash out a few of the real crazies. We stabilise. We go back up.

Essentially, a much higher volatility chop. The same, just a bit different.


jog on
duc

 

[qldfrog]

https://www.marketwatch.com/story/if-you-sell-in-may-dont-go-away-11620070962
More on the sell in may.with a twist
sell in may yes but do not go away and get back in during that few month after the fall

 

[Skate]

https://www.marketwatch.com/story/if-you-sell-in-may-dont-go-away-11620070962
More on the sell in may.with a twist
sell in may yes but do not go away and get back in during that few month after the fall

Takeaway from the article
"If you want an easy life, ignore all trading advice from the Wall Street crowd. Set some basic rules—asset allocation, clearly established sell signals and so on—and stick to them"

"Furthermore, they’ll say, once you and I get in the habit of getting into the market and then out of it again, most of us will simply mess it up. We’ll get back in too early, or too late, or not at all"

Skate.

 

[ducati916]

Start with oil news:

Air travel is on the rise in the U.S., indicating an uptick in jet fuel demand.

- Jet fuel demand has averaged 1.2 mb/d over the past four weeks, up 200,000 bpd from March levels.

- In March, 1.2 million passengers passed through U.S. airports per day on average. That jumped to 1.4 million passengers per day in April.

Market Movers

- Citibank added Valero (NYSE: VLO) to its focus list, raising its price target to $121 per share, up from $95.

- Bank of America upgraded First Solar (NYSE: FSLR) to a Buy rating, stating that recent bearish pressure is overdone.

- BP (NYSE: BP) is set to bid on a second offshore wind farm in Scotland.

Tuesday, May 4, 2021

Oil prices jumped to a seven-week high as markets are pricing in higher demand expectations. As of 8:51 a.m. EDT on Tuesday, the U.S. benchmark WTI Crude was back above $65 per barrel, having touched the highest level since March earlier in the day.

Exxon and Chevron confirm carbon capture projects. ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) confirmed their commitments to a build large-scale carbon capture projects. Exxon’s initial foray is a Texas hub to capture CO2 from heavy industries in Houston, a $100 billion idea that would need government support.

Venezuela puts jailed oil executives on house arrest. Venezuela moved six American oil executives from jail to house arrest, viewed as a gesture of goodwill to the Biden administration.

Exxon locks out workers at refinery. ExxonMobil (NYSE: XOM) locked out union workers at its Beaumont, Texas refinery over a labor dispute. Exxon is bringing in non-union workers to keep the facility running.

Iraq may buy Exxon’s stake. Baghdad said that the Iraqi government could buy ExxonMobil’s (NYSE: XOM) 32.7% stake in the West Qurna-1 oil field in southern Iraq.

Spot LNG prices jump. Spot LNG prices in Asia rose earlier than expected ahead of a typical summer rally as buyers wanted to stock up over concerns about supply. Spot prices hit $8.85/MMBtu in the last week of April, the highest price since early January.

Commodity boom underway. A wide-ranging price rally has swept over global commodity markets, bolstering the notion that a “supercycle” is underway. Iron ore, palladium, and lumber all hit record highs in the past week. Agricultural commodities have also hit near-decade highs. “I don’t know if we have seen anything like this before,” Ulf Larsson, chief executive of Swedish pulp and timber company SCA, told the FT. “We are in some kind some of perfect storm.”

Interior approves massive solar project. The Department of Interior approved a massive 350-megawatt solar plus battery storage project for the California desert. The $550 million Crimson Solar Project will be developed by a subsidiary of Canadian Solar (NASDAQ: CSIQ).

Investors stake out bullish bets on manufacturing pickup. Hedge funds and other money managers boosted their positions in oil futures as manufacturing data shows a continued rebound.

Biden admin declines to shut down DAPL again. A federal court gave the Army Corps one more chance to shut down the Dakota Access pipeline, but the Biden administration stated its support on Monday to keep it online while an environmental review proceeds.

Oil majors hike dividends. With impressive bottom-line growth, many top energy names are rewarding investors with fatter dividends with no energy company announcing a dividend cut so far. Here's a rundown of Big Oil's dividend trends after the latest earnings report.

BMW and Ford bet $130 million on battery tech. BMW (ETR: BMW) and Ford (NYSE: F) invested $130 million in a solid-state battery startup, a vote of confidence in next-generation battery technology.

EnergyX raises $20 million for lithium mining. EnergyX has raised $20 million in Series A funding to advance its direct lithium extraction technology, which would provide a technological boost to lithium production.

Talen Energy announces 1 GW of battery storage. Talen Energy Corporation announced the development of 1 GW of energy storage across three states.

ESG debt surges. Since last summer, companies have issued nearly $240 billion in debt tied with ESG promises, nearly double the cumulative figure for the previous three years.

Investors skeptical of oil majors’ green plans. Only a minority of institutional investors in oil and gas seem to believe that Big Oil will be able to pull off a green transition.

Mountain Valley Pipeline delayed again. Mountain Valley Pipeline said on Tuesday that its in-service date has been pushed off until at least the summer of 2022, with costs ballooning to $6.2 billion. The pipeline is a key outlet for Marcellus shale gas to the U.S. southeast. The original price tag was pegged at $3.7 billion.

Saudi Aramco posts big profits. Saudi Aramco (TADAWUL: 2222) reported $21 billion in first-quarter profit, up 24% from a year earlier. However, it was not large enough to cover its dividend.

Cheniere ships carbon-neutral LNG. Cheniere Energy (NYSE: LNG) shipped what it says is a carbon-neutral LNG cargo. Carbon was offset by nature-based offsets.

Could oil shoot up to $80? Some investment banks have predicted that crude oil prices could hit $80-$85 in the second half of this year, as Europe, and many other regions, emerge out of lockdowns and as intercontinental aviation starts to pick up gain.

Baker Hughes upgraded. Barclays upgraded Baker Hughes (NYSE: BKR) to Overweight and said it is “time to own.”

Europe’s first big hydrogen hub? The Port of Rotterdam in the Netherlands, emboldened by the European Union’s new Hydrogen Strategy, is taking significant fist steps to becoming Europe’s ‘hydrogen hub’ and one of the most advanced centers of green hydrogen production in the world.

Some earnings:

ETF inflows:

The high returning ETFs are the leveraged ETFs.

Returning to the 'Sell in May' an alternative viewpoint.

Mr flippe-floppe-flye:

Buffett and Munger past it?

Tech. not feeling the love atm.

Or the NASDAQ.

Which likely means they are due a bounce in the near future.

Daily VIX is looking bullish, as opposed to yesterday's weekly, which looks bearish.

Value still outperforming growth.

Which is kinda confirmed here.

It still remains a coin toss whether we move higher or lower. As I type, we have a bit of a sell-off. Buyers may return again to BTD or not. As I said: coin toss.

The defensive end of the market, the value end, is still outperforming growth. Energy, THE commodity is still moving in XLE. Yields are lower. Now whether this signifies a run to safety or just trading, difficult to say. I would say, just trading. It doesn't have the feel of a run to safety atm.

If pushed, I would say that this is pretty much it for the Bear raid. They have not instilled enough fear. The BTD brigade if they can get a bounce off of the lows in the next 30mins. will carry the day and tomorrow will be a big green day.


jog on
duc

 

[ducati916]

As we approach the end of the week, SPY/DIA has pretty much held the line. QQQ and Tech. seem to be the focus of a short selling raid:

That may be about to end. Mid caps and Small caps, while not exactly strong are holding the line.

Meanwhile sectors across the board are flat, meh.

All which suggests that the Bears have lost the advantage.

The all-important yields. The 10yr is lower and below its 50EMA. Just a short term blip? My model still says 1.67%. Currently we sit lower. Therefore I would expect yields to resume higher over the next week or so.

Gold/Silver are moving higher on the falling yields. It may simply go nowhere and churn further if yields resume their march higher, albeit that it is not nominal yields but real yields that matter. And real yields are negative.

Mr flippe-floppe-flye:

Summary:

It remains a coin toss. Maybe higher, maybe lower.

I am starting to lean long. The reason being that the shorts had their best opportunity this first week of May. The narrative was everywhere, stocks weakened into the end of April, leading to a good set-up for a follow through lower. Stocks held on with the BTD buyers undeterred and out in force in aggregate for the broad market.

Individual sectors rotate through pretty fast: short term move higher, pullback, move higher. Trends are truncated and choppy. Tech. has been a tough area as Wall St Hedge Funds seem to be targeting Cathy Wood and Ark, possibly envy at her fast growing AUM. Anything commodity related, XLE, XLB are on fire. Financials, XLF, on fire. Healthcare XLV, setting up. XLRE, setting up.

jog on
duc

 

[ducati916]

So not only ARK, but Hedge Funds across the board:

They will bounce, no doubt. The question rather is when.

jog on
duc

 

[peter2]

Good to see some common sense appear in the market. Although this means lower prices for the market "darlings" (growth stocks). Great to see APT - Afterpay below $100. Software companies are being sold off. There's a lot of hot air that needs to dissipate. It's going to take time but not all the froth disappears.

Banks and commodities are in demand. Real things. This feels normal.

Only one sector left to blow up, cryptos. When it does, it'll be capable of causing a 10% dip in the equity market. A great BTD opportunity.

 

[ducati916]

Oil news:

Friday, May 7th, 2021

Brent tested $70 per barrel on Wednesday but fell back on Thursday. Oil “had a great run, but it got a little bit ahead of itself,” Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago, told Bloomberg. “We’ve hit resistance and prices pulled back,” but it’s hard to see a summer demand boost “being derailed,” he said. Oil is still set to close out the week with another gain.

Sempra to delay Port Arthur LNG. Sempra Energy (NYSE: SRE) said on Wednesday that it would delay its proposed Port Arthur LNG project until 2022 instead of this year, citing global energy markets and a focus on greenhouse gas reductions.

Exxon to take $200 million charge related to job cuts. ExxonMobil (NYSE: XOM) expects a $200 million charge related to severance costs for laid-off workers.

Copper hits record high. Copper price hit a record high on Thursday as Chinese investors unleashed fresh demand following a five-day holiday.

Pioneer says consolidation needed. Pioneer Natural Resources (NYSE: PXD) CEO Scott Sheffield said that the shale industry needs even more consolidation. “I hope other privates are taken out that are growing too much,” Sheffield told investors on an earnings call,” Sheffield said.

Wind costs rise due to the commodity boom. The rising cost of steel is forcing Vestas (CHP: VWS) to hike its prices for wind turbines.

Exxon and Chevron cautious in Permian. Neither ExxonMobil (NYSE: XOM) nor Chevron (NYSE: CVX) are rushing to boost production in the biggest American shale play, the Permian, despite the oil price rally this year that has sent WTI prices to above $60 per barrel.

Winners of Texas freeze. Among the biggest winners of the Texas crisis in February were commodity trading major Vitol, pipeline operators including Kinder Morgan, Enterprise Products Partners, and Energy transfer, and lenders including Goldman Sachs, Bank of America, and Macquarie Group.

Energy Transfer made $2.4 billion in Texas crisis. Energy Transfer (NYSE: ETP) took in $2.4 billion from the Texas grid crisis, and the stock jumped nearly 5% on Thursday.

India to import more Saudi oil. After Saudi Aramco cut oil prices for June, Indian state refiners added more orders.

Peak LNG? The viability of LNG import terminals in Europe has dimmed and utilities are looking for alternative uses, according to Bloomberg. Last month, for example, Uniper SE said waning demand for new LNG led it to switch a project to a hydrogen hub. In Ireland, another project has been transformed into an offshore wind project.

LNG market to see deficit. Rystad Energy said that the global LNG market could see a supply deficit in the coming years due to inadequate investment, made worse by the delays in Total’s (NYSE: TOT) massive LNG project in Mozambique.

Commodity boom adds inflation risk. Tight inventories for a long list of commodities are pushing up prices, which is increasing the odds of rising inflation. U.S. Treasury Secretary Janet Yellen rattled markets on Tuesday when she said that interest rates might need to rise.

IEA: metals shortage poses transition risk. The IEA came out with a new report warning that a shortage of critical minerals used in green technologies could slow the pace of energy transition and make it more expensive. The agency urged faster investment in new mining projects.

U.S. shale pre-hedge revenue hits record high. If WTI futures continue their strong run and average at $60 per barrel this year and natural gas and NGL prices remain steady, producers can expect a record-high hydrocarbon revenue of $195 billion before factoring in hedges, a Rystad Energy analysis shows. The previous record of $191 billion was set in 2019.

UN: World needs to cut 40-45% methane. A new report from the UN finds that the global increase in methane emissions since 2010 is “primarily attributable” to the surge in oil and gas drilling – i.e., the U.S. shale boom. The report said cuts to methane emissions are actually inexpensive and achievable.

Marathon Oil returns to Oklahoma drilling. Marathon Oil (NYSE: MRO) is returning to limited operations in Oklahoma and the Permian Basin's western Delaware Basin in New Mexico before ramping up next year.

Michigan’s May 12 deadline for Line 5. Michigan has ordered Enbridge’s (NYSE: ENB) Line 5 pipeline shut down by May 12 – next week – but the company said it would defy the order.

TC Energy takes $1.8 billion impairment on KXL. TC Energy (NYSE: TRP) announced a C$2.2 billion ($1.8 billion) impairment related to the suspension of the Keystone XL project.

Half of Equinor’s profits came from renewables. Equinor (NYSE: EQNR) reported $2.6 billion in first-quarter earnings, and 49% came from renewables.

Mining majors earn more than oil majors. The top five iron ore miners are on track to earn $65 billion this year, or about 13% more than the top five oil majors, according to Bloomberg. A big reason for this is the soaring price of iron ore, which has climbed to around $200 per ton, a record set a decade ago.

EQT to buy Alta Resources for $3 billion. EQT (NYSE: EQT) said it would purchase Appalachian rival Alta Resources for $2.93 billion in cash and stock. EQT is already the nation’s largest natural gas producer, and a giant in Appalachia, but the acquisition expands its footprint.

Germany accelerates climate targets. In the wake of a court decision ordering tougher action, the German government increased its 2030 emissions reduction target from 55% to 65% and moved up its net-zero target by five years to 2045.

Biden admin considers nuclear subsidy. The White House is considering a subsidy to keep existing nuclear power plants online to avoid a setback in its decarbonization goals if nuclear plants were to shut down.

For the week:

Some headlines/stories:

Mr flippe-floppe-flye:

The important development:

That was a very significant break in yields. What gives?

ATM it looks as if the trend to higher yields is broken. Someone, bought the 10yr in a BIG way. Who (if anyone) would want a still negative (possibly just positive) real yield? The answer is actually very important, although the net result is probably the same.

If and it is a pretty big if atm, yields continue lower, we could see a rotation back into growth stocks, which largely means Tech. and a rotation out of value. Commodities would get even more support and continue their bull move higher. Which leaves everything else in the middle as a bit of a toss-up.

So my interest rate model is now calculating a yield of 1.7%. This is a pretty significant spread and from the chart, that spread could widen further.

Has the Fed. already stepped in and started to buy Bond ETFs? I have no idea. Until Fed. data comes out, I guess no-one (or very few) will actually know.

I don't see any outrageous volume, but as I don't follow volume, I'm probably not the best person to assess it.

Either way, whoever has and is buying, it will be interesting to see, as if the chart of $TNX (yield) continues to decline, whether buying pressure remains, sending yields lower. It could simply be short covering, if there have been large short positions.

As a result, my 'Inflation' chart has reversed:

On a daily time frame, inflation is Thunderbirds go. No wonder Gold & Silver are having good moves atm.

So for the moment, commodities will continue to run hot. Industries that are at 1 higher stage than commodities will potentially run hot as long as the consumer demand at the final stage remains. The closer you get to end demand, the greater the volatility of those stocks as those that cannot pass on price inflation will see declining market share. Cost structures, expressed as margins, will, if this inflationary surge continues, come under pressure with stages of production furthest from raw materials feeling the pain first.

jog on
duc

 

[ducati916]

Weekend knick-knacks, part I.

DXY breaking down, which of course combined with falling yields, sends inflationary pressures higher, which we will see.

Crypto. As a trading vehicle, sure why not, look at the returns. If you can get out before 99.9% of them go to zero and bank that coin, then the returns have been eye-watering.

How fast could some of these go from 'X' to zero? Literally over-night. Therefore if you start with a position that is equal to your stop-loss of 100%, fine, no issues.

US vehicle sales. Those stimmies are getting used.

Buy before the prices rise.

So the record P/E levels could correct over time IF earnings continue at this rate. Unlikely. Rising PPI numbers will cut into those margins. Unless you can offset those rising costs to the consumer. Wages are still pretty stagnant, if not actually falling slightly. I would expect (over time) for these to compress again.

Travel slowly returning to previous levels. This if it continues indicates that business travel is also coming back and predictions of zooming were somewhat optimistic. I actually had to take part in a Zoom conference on Wednesday and I have to say, it was not too bad, better than I expected.

Stock returns under a variety of inflationary periods.

Bond returns under various inflationary periods.

ARKK holdings. Many (most) getting crushed.

The PPI pressure. Look at lumber etc.

Economists:

Self-explanatory.

jog on
duc

 

[ducati916]

Part II.

Pressure in the commodity sector looks set to remain for some time. Mining is not exactly green. So all this mining, ostensibly for green products, somewhat contradictory.

Full article: https://www.nytimes.com/2021/05/06/business/lithium-mining-race.html

Mr flippe-floppe-flye:

Barrons is 100yrs old. A quiz:

And an interesting article if you are interested in philosophy: https://www.theguardian.com/news/2021/apr/27/the-clockwork-universe-is-free-will-an-illusion

I had a bit of a debate on this forum a while back on this subject.

So yesterday I posted a shorter term chart of inflation. Here is the longer term chart. Interestingly, since 2019 when clearly inflation was well under way, there wasn't the same obsession with the issue. Today, with inflation lower (albeit increasing) it is a really hot topic.

Gold certainly signalled inflation in 2019 while the CRB index went essentially nowhere. Of course the Gold Bugs were screaming about inflation, as they are now (hyper-inflation) but the market was, meh.

Gold is again signalling (potentially) that inflationary pressures are mounting and the CRB looks to be heading back to 2011 highs or greater currently. With many of the 'just-in-time-inventory' supply chain theory being pulled back from (lithium mine development in the US as an example) globalisation, THE big driver of 'dis-inflation' is on the wane.

The big sectors to watch: XLE, XLB, XLRE and Mining ETFs GDX, GDXJ, SLVP, COPX, REMX, the actual metals, GLD, SLV, CPER, WOOD, all potentially could benefit. Many are already through the roof.

The BIG question is interest rates. My model has 1.7%. The actual current rate is 1.6% (moving higher after that hard sell-off and bounce). Obviously the important number is not so much the nominal number but the real number.

To cap inflationary pressures, the 10yr yield will have to go much higher. I would guess (because who knows what the real inflationary number actually is) at least 2.5%.

What happens to stocks at 2.5% (assuming the Fed does not move to YCC)?

With DXY moving back into its downtrend (and DXY is by far the most important driver) there will be added even more significant inflationary pressure.

Timeline: as previously posited, all variables seem to converge on the late summer, autumn period. Sept/Oct.


jog on
duc

 

[qldfrog]

Part II.

Pressure in the commodity sector looks set to remain for some time. Mining is not exactly green. So all this mining, ostensibly for green products, somewhat contradictory.

View attachment 123960

View attachment 123970

Full article: https://www.nytimes.com/2021/05/06/business/lithium-mining-race.html

Mr flippe-floppe-flye:

View attachment 123961View attachment 123962

Barrons is 100yrs old. A quiz:

View attachment 123964View attachment 123965View attachment 123966View attachment 123967View attachment 123968View attachment 123969



And an interesting article if you are interested in philosophy: https://www.theguardian.com/news/2021/apr/27/the-clockwork-universe-is-free-will-an-illusion

I had a bit of a debate on this forum a while back on this subject.

So yesterday I posted a shorter term chart of inflation. Here is the longer term chart. Interestingly, since 2019 when clearly inflation was well under way, there wasn't the same obsession with the issue. Today, with inflation lower (albeit increasing) it is a really hot topic.



View attachment 123971

Gold certainly signalled inflation in 2019 while the CRB index went essentially nowhere. Of course the Gold Bugs were screaming about inflation, as they are now (hyper-inflation) but the market was, meh.

View attachment 123972

Gold is again signalling (potentially) that inflationary pressures are mounting and the CRB looks to be heading back to 2011 highs or greater currently. With many of the 'just-in-time-inventory' supply chain theory being pulled back from (lithium mine development in the US as an example) globalisation, THE big driver of 'dis-inflation' is on the wane.

The big sectors to watch: XLE, XLB, XLRE and Mining ETFs GDX, GDXJ, SLVP, COPX, REMX, the actual metals, GLD, SLV, CPER, WOOD, all potentially could benefit. Many are already through the roof.

The BIG question is interest rates. My model has 1.7%. The actual current rate is 1.6% (moving higher after that hard sell-off and bounce). Obviously the important number is not so much the nominal number but the real number.

To cap inflationary pressures, the 10yr yield will have to go much higher. I would guess (because who knows what the real inflationary number actually is) at least 2.5%.

What happens to stocks at 2.5% (assuming the Fed does not move to YCC)?

With DXY moving back into its downtrend (and DXY is by far the most important driver) there will be added even more significant inflationary pressure.

Timeline: as previously posited, all variables seem to converge on the late summer, autumn period. Sept/Oct.


jog on
duc

Interesting free will link, but even doubting the free will concept is imho actually destroying the base of civilisation: in justice obviously as you would know , but also relationship: I didn't have an affair, i was made to etc etc.it challenges work, property rights..
Whole societies deni free wil: "inch halla","comme dieu le veut" in the dark ages and that led to extreme fatalism and obscurantism, and falling societies.
The sheer fact we are even raising the question is imho a sign of a suicidal society.interesting interlude.
So crash next September you think?

 

[ducati916]

So 'Dodgy Coin' having a bad day"

From the look of the chart, the BTD traders have tried twice to BTD, both times it has failed. This could now go to zero. More interestingly, if it does, what psychological impact does it have on the rest of the s***e out there?


jog on
duc

 

[ducati916]

Interesting free will link, but even doubting the free will concept is imho actually destroying the base of civilisation: in justice obviously as you would know , but also relationship: I didn't have an affair, i was made to etc etc.it challenges work, property rights..
Whole societies deni free wil: "inch halla","comme dieu le veut" in the dark ages and that led to extreme fatalism and obscurantism, and falling societies.
The sheer fact we are even raising the question is imho a sign of a suicidal society.interesting interlude.
So crash next September you think?

The problem (if there is a problem) is that when Rationalism and logic meet Religion and faith, there is little common ground. There are a number of threads on ASF that address these issues, none of them ever really result in one side persuading the other.

Re. Sept/Oct. From a historical perspective, some of the nastiest falls have occurred in these months. If yields continue to rise with or without (but more likely with) rising commodity prices, so that the real yield is inflationary, the inflation argument will have progressed to an inflection point. A factual inflation added to a spooky season for stocks, could be enough to trigger a major tumble, if we haven't had one earlier.

This market increasingly seems to be driven by memes. This is reminiscent of the 1990's Bull market. With E. Musk appearing on SNL and that episode attached to and effecting serious market movement, is eerily echoing that earlier market. Hence, come the northern hemisphere autumn, there will be untold articles around past market collapses in Sept/Oct. Of course we have to reach that period intact first. No guarantees of that happening.

For the moment (next week) I think we are safe to move higher, but it has really been touch & go. Notice both charts create a triangle with upslopes/downslopes. It looks as if it will resolve to the upside, but, as usual, it just depends on how you look at it.

Moving away from the chart, to more practical terms: if the Bears were going to succeed, they needed to break the market last week when they had the meme, the early break and a big run-up in April with them.

It didn't happen.

By no means are we out of the woods. We will continue to see runs higher (relatively small) with shallow pull-backs. Those pull-backs will be BTD opportunities, conditioning participants that BTD is the way forward.

When (if) the big break comes, BTD will get you killed. Probably starting about know, rather than buying the dip early, it will be wiser to wait for solid confirmation and be late. This will unfortunately have the effect of making a choppy market even choppier as buying later reduces any upside before the next wobble. Either that or recognise the big break when it arrives.


jog on
duc

 

[qldfrog]

And this mood has some consequences.i am heavily cash now with systems, but on a buying spree this morning..i follow my systems..
Yet, i have another weekly system ready.and the cash for it, but reluctant to start it.still reliant on a bull trend. And i feel i have enough exposure as is..still human..and so weak..

 

[ducati916]

So our choppy, frustrating market continues: Tech. selling off currently. The chart below illustrates this far more clearly than just the numbers

On my analysis, this is actually gathering steam and would qualify as a SHORT position.

In any case, this will create real choppiness in the indices because of the market caps. of these stocks, unless they turnaround this week at some point.

The takeaway: don't hang onto stocks too long. Unfortunately, this creates a mentality of take profits off the table sooner rather than later as later there may be nothing left. This then becomes, if the market becomes trendier, a tough habit to break.

I had the 'Dodgy Coin' chart up yesterday. SNL is the marker of the 'TOP'.

Add to that list Dodgy Coin.

VIX is ticking higher:

Hardly surprising with the sell-off in Tech. atm.

Mr flippe-floppe-flye:

With Tech. weak atm, the actual gains in the indices will be more muted. Individual sectors will outperform (or not) while the index just creeps higher in a really boring manner with all manner of small pullbacks. In other words NOISE will dominate. The Tech. trade will come back at some point and is a turn I'd like to catch.

Yields are moving higher:

My model has 1.7% currently. We'll see. If yields do eventually move to that 2%-2.5% area, then potentially we have problems. If they shoot up really fast, we definitely have problems.


jog on
duc

 

[ducati916]

And this mood has some consequences.i am heavily cash now with systems, but on a buying spree this morning..i follow my systems..
Yet, i have another weekly system ready.and the cash for it, but reluctant to start it.still reliant on a bull trend. And i feel i have enough exposure as is..still human..and so weak..

Monsieur Frog,

I'm trying to get a weekly system up and running. I really think from @Skate and 'Dump It' thread there is merit in trading a weekly. The current 'Swing Trades' I'd like to catch a trend potentially a lot longer than the current day or two as it is a profitable way to go. The problem is (a) very choppy market, (b) some already mature trends in sectors which are possibly a bit late to jump on (bias).

So newer (potential) trends that have weekly systems applicability: GDX, GDXJ, GLD, SLV, SLVP.

So I have taken a position in JNUG, which I will run as a weekly trade, but I opened this a few weeks back.

Anyway this is still a project under construction.

jog on
duc