June DDD

[peter2]

Major metals thumped by the surging USD.



Hoping we'll see some demand appear Mon before our next open after the King's B'day holiday.

 

[ducati916]

So for next week:

First from the firm:





Wednesday has CPI in the morning and the Fed after lunch. Could be a volatile day. LOL.



So now I will go through each sector and my take:



Bear: looking for a pullback to support.
Trade: Weekly Option: Buy PUT @ $70 Sell PUT @ $68



Bear: Pullback to PP
Trade: Weekly Option Buy PUT @ $146 Sell PUT @ $142



Neutral
Trade: Weekly Option: CALL Butterfly $170/$175/$180



Bear
Trade: Weekly Option: Buy PUT @ $122 Sell PUT @ $120



Bear
Trade: Weekly Option Buy PUT @ $215 Sell PUT @ $205



Bear
Trade: Weekly Option Buy PUT @ $41 Sell PUT @ $40



Neutral
Trade Weekly Option CALL Butterfly: $36/$38/$40



Bear
Trade Weekly Option Buy PUT @ $77.50 Sell PUT @ $76

pg. 2

 

[ducati916]

Bear
Trade Weekly Option Buy PUT @ $90 Sell PUT @ $88



Very cautiously bullish
Trade Weekly Option Buy CALL @ $85 Sell CALL @ $88



Bear
Trade Weekly Option Buy PUT @ $90 Sell PUT @ $88


So the SPY:





Being held up/driven higher by the mega caps. NVDA when it blows up, will take the market down. So you have a lot of soggy stocks in their various sectors, but overwhelmed in the SPY by these 6

jog on
duc

 

[ducati916]

Macro factors:



Bear
Trade Weekly Options: No trade strikes are too wide.



Bull
Trade Weekly Option Buy CALL @ $91 Sell Call @ $95



Bear
No trade



Bear
No trade (trade via XLE)

jog on
duc

 

[divs4ever]

German politician flees to Russia​

German politician flees to Russia

Former AfD member Olga Petersen has claimed that the authorities in Hamburg were planning to seize her children

www.rt.com

obviously convinced elections are fairer in Russia and the state less prone to child-trafficking

interesting times

 

[divs4ever]

Troops hid inside aid truck for deadly US-Israel operation in Nuseirat​

Troops hid inside aid truck for deadly US-Israel operation in Nuseirat

The Palestinian resistance called the operation a 'complex war crime' and reported that the Israeli army killed a number of their remaining captives during a massacre that left over 200 dead

thecradle.co

wowee

a whole different angle from some other media outlets

 

[ducati916]

Odds and ends:




I think that there is an important caveat now. If you are long SPY you are actually long MSFT, NVDA, AMZN, and a couple of others. Individual stocks, outside of these are increasingly bearish. Entire sector ETFs are weak other than if they hold one of those mega caps.

https://www.reuters.com/world/us-treasury-no-2-warns-china-over-support-russia-2024-05-31/

Which makes the shipping container chart that much more important.

In a follow up post, there is increasing evidence that the new Cold War II is ramping up even further with increasing risks of a hot war in the South China Sea.

So back in the Covid era, Covid was blamed for jack-knifing inflation higher as supply chains collapsed. Container prices went ballistic. Well the increasing evidence demonstrates that supply chains are again broken and that inflation will be ramping higher. Higher container rates are just part of that evidence.



jog on
duc

 

[qldfrog]

We in Australia, often consider ourselves as a big mining country, and it is true domestically in the absence of much else but I find this perspective in miners sizes interesting
We are even with Canada, Indonesia but below many other, just a bit more than half of Brazil and 15 times smaller than China .

 

[divs4ever]

We in Australia, often consider ourselves as a big mining country, and it is true domestically in the absence of much else but I find this perspective in miners sizes interesting
We are even with Canada, Indonesia but below many other, just a bit more than half of Brazil and 15 times smaller than China .

i guess we no longer have to worry about digging a hole to China , China is more likely to dig a hole to Australia , rendering our navy and submarines useless against invasion

 

[ducati916]

Which is really noticeable.



Referring to the upcoming NVDA split. Let's smaller retail traders play in a lower priced stock.






See first chart.



Raising the hope of rate cuts moving forward.



European elections notable for number of hard right elected.



USD higher, Bonds lower (price) Yields (higher) but nothing from the UST market vis-a-vis volatility. Is it coming though?

I sold a little PG and bought a little SLV. Other than that, I sat on my hands.

Alzheimer’s Takes a Financial Toll Long Before Diagnosis, Study Finds

New research shows that people who develop dementia often begin falling behind on bills years earlier.

www.nytimes.com

jog on
duc

 

[ducati916]

Today:



Watching.

jog on
duc

 

[ducati916]

Oil News:

Supply disruptions have ratcheted up pressure on gas prices globally, with prices across Europe, Asia, and the United States simultaneously edging higher to their highest in 2024 so far.

- European TTF gas futures soared 13% in one day after cracks were found in Equinor’s Sleipner platform and even though the repairs concluded already, the regional benchmark continues to hover around €35 per MWh ($11 per mmBtu).

- A string of Australian force majeure events, the latest of them coming from Chevron’s Wheatstone facility which was forced to halt production after an outage this Monday, has pushed the regional LNG prices to $12 per mmBtu already.

- Sentiment arpund natural gas in the US has improved markedly, too, with Henry Hub closing above $3 per mmBtu for the first time since early January 2024 and hedge funds’ positioning turning sustainably net long after two years of suffering.

Market Movers

- Global trading major Glencore (LON:GLEN) has won a crude supply tender to Prax’s 113,000 b/d Lindsay refinery in the UK, dealing a painful blow to trading competitor Trafigura which used to be Prax’s main supplier.

- Warren Buffett’s Berkshire Hathaway (NYSE:BRK) bought some 2.57 million shares of common stock in Occidental Petroleum (NYSE:OXY), further increasing its ownership of the oil majors from the 28% stake it had up until now.

- French major TotalEnergies (NYSE:TTE) agreed to purchase the UK power generator West Burton Energy from EIG for a total of $576 million, boosting its gas capacity by 1.3 GW and renewables by 1.1 GW.

Tuesday, June 11, 2024

Following weeks of lukewarm demand statistics, we might finally be on the brink of seeing summer demand kicking in. A reported jet fuel shortage in Japan, Goldman Sachs’ relatively bullish view on transportation fuel demand over the summer, and the prospect of a US SPR replenishment boost have lifted Brent futures above the $81 per barrel mark.

Return of OPEC+ Barrels Triggers Huge Sell-Off. Portfolio investors exited a record amount of long positions in the week ending June 4 as the prospect of OPEC+ bringing back production into 2025 soured the bullish sentiment, selling a total of 194 million barrels in the six leading futures contracts.

Iraq Eyes Restart of Idled Kurdish Pipeline. Iraq’s oil minister Hayan Abdel-Ghani noted progress in negotiations with Kurdistan regional officials on a potential deal to resume oil exports via the idled 450,000 b/d capacity Kirkuk-Ceyhan oil pipeline, halted since March 2023.

Saudi Aramco SPO Exceeds Expectations. The shares of Saudi national oil company Saudi Aramco (TADAWUL:2222) gained this week after the company raised $11.2 billion in its secondary share offering, with at least half of sales reportedly going towards international investors.

New Zealand Makes U-Turn on Oil Exploration. The government of New Zealand vowed to introduce legislation that would remove a disputed ban on offshore oil exploration, in place since 2018, by the end of this year, reversing the oil policy of the previous center-left Labour government.

Niger-Benin Spat Turns Ugly Again. Having just loaded the first-ever Meleck cargo last month, exports could halt again as the Benin-Niger geopolitical spat took another turn this week, with the former arresting 5 people it believes to be Nigerien soldiers working undercover at the port of Seme.

Japan to Fund New Nuclear Plants with Bonds. Japan’s Kansai Electric Power is planning to issue transition bonds to finance future nuclear power projects, aiming for some ¥30 billion ($190 million), the second Japanese firm in two months to turn to bonds as a nuclear financing tool.

Russia Seeks Iran Corridor to India. Russia has announced it plans to export coal to India via Iran’s railway network system as Moscow seeks to ramp up supplies to the world’s second-largest coal consumer, to be ultimately shipped from the Iranian port of Bandar Abbas.

Houthis Strike Two Western-Owned Container Ships. Houthi militias have targeted two container ships this week, the Swiss-owned Tavvish and the German-owned Norderney, damaging both with anti-ship ballistic missiles some 70 nautical miles southwest of Aden.

Suncor Triggers the Ire of Environmentalists. Environmentalist groups sued Canada’s leading oil firm Suncor Energy (TSO:SU) for alleged air pollution violations at its 98,000 b/d Commerce City refinery in Colorado, claiming they’ve recorded more than 1,000 emission violations in 2019-2023.

IEA Sees Upstream Investment Growth Slowing Down. The International Energy Agency forecasts that global upstream spending would increase by 7% this year to $570 billion, slightly lower than the 9% year-on-year pace of 2023, insisting that it’s much more than is needed.

Chinese Demand for Saudi Crude Weakens. Saudi crude exports to China are expected to bottom out in July as Chinese refiners nominated only 36 million barrels for next month, opting for other sources of crude as Middle Eastern barrels get more expensive as margins flatten out.

Port of Baltimore Fully Reopens After Tanker Crash. Less than three months after the Dali tanker crashed into the Francis Scott Key Bridge the port of Baltimore has fully reopened as the operating dimensions of the navigation channel were lifted to 700 feet wide and 50 feet deep.

Oil Sands Producers Riot Against Emissions Cap. Canada’s leading oil producers have objected to the government’s plan to cap emissions, saying that a carbon tax would be the preferred way of climate impact mitigation, as limiting emissions would also impact future production growth.



MOVE not yet signalling panic, but with USD moving higher...just a matter of time.

Tomorrow is the double whammy of CPI data and Fed.

US hegemony is over:



Saudi's no longer buying UST:



BRICS definitely (if you still had doubts) are moving far, far away from USD. Gold will be the Reserve Asset held to settle net-net trade imbalances.

jog on
duc

 

[peter2]

Oh, @ducati916 I hope you were awake for this. A decimal place is such a beautiful thing.



USD down, commodities, AUD, EUR, GBP all up!
I placed a few pending bracket orders trading both ways. Everything up and all hit +2R targets.



The US is yet to open and all my US positions look like opening gap up. I won't be sleeping tonight.

 

[ducati916]

Oh, @ducati916 I hope you were awake for this. A decimal place is such a beautiful thing.

View attachment 178590

USD down, commodities, AUD, EUR, GBP all up!
I placed a few pending bracket orders trading both ways. Everything up and all hit +2R targets.

View attachment 178591

The US is yet to open and all my US positions look like opening gap up. I won't be sleeping tonight.

Indeed the 'low' CPI number ignited a rally.



Now we just have to navigate the Mr Powell:



Potential for chop and a reversal, but who knows.

Lots of cash that could run to stocks if rates are cut or are back on the table:



Mr fff:



So I'll be back after Mr Powell.

Meanwhile:



Consumer defensive...down, energy, down. The big boys: up biggsly. Market is ready, on a dove Fed to explode higher.

jog on
duc

 

[ducati916]

Fed still Hawks:



Let's watch.

jog on
duc

 

[ducati916]

Nothing showing up currently.

However I have written on the Repo market and its risks before.



Where the number came from yesterday.



jog on
duc

 

[ducati916]

So (near as dammit) the market sectors this week:



So last week I provided my opinions and trades:

XLU Put $70-$68: current $69.93 profit
XLV Put $146-$142 current $145.83 profit
XLY Butterfly $170/$175/$180 current $178.13 profit
XLI Put $122-$120 current $121.01 profit
XLK Put $215-$205 current $227 loss
XLF Put $41-$40 current $40.65 profit
XLRE Butterfly $36/$38/$40 current $38.43 profit
XLP Put $77.50-$76 current $77.19 profit
XLE Put $90-$88 current $87.94 profit
XLC Call $85-$88 current $84.06 loss
XLB Put $90-$88 current $89 profit
GLD Bear, no trade
TLT Call $91-$95 current $94.62 profit
USD No trade

10 winning trades
2 losing trades
2 no trades

I'll run through the same exercise this w/e.






Oil:





Friday, June 14, 2024

After several weeks of unpredictable see-sawing, oil markets are back to their usual self. The IEA and OPEC are publicly arguing about the future of oil demand, U.S. interest rate cuts are still not happening, and questions remain about the strength of summer gasoline demand. That said, a positive outlook in U.S. inflation data might have helped to tilt the balances slightly in favor of oil bulls, with Brent closing the week around $83 per barrel.

IEA Paints Bleak Picture for Oil Demand. The International Energy Agency predicts a 2029 peak in global oil demand at 105.6 million b/d, predicting a price slump as it believes global supply capacity will hit almost 114 million b/d by the end of this decade.

OPEC Defies Oil Pessimists, Says Demand Grows for Decades. Calling the IEA’s report ‘dangerous commentary’, the OPEC secretary general Haitham al-Ghais stated he doesn’t see a peak in oil demand until at least 2045, saying consumption will grow to a hefty 116 million b/d.

US Crude Imports Rise to 6-Year High. According to the EIA, US crude imports rose to their highest since 2018 last week at 8.304 million b/d, boosted by the first cargoes from Canada’s TMX pipeline reaching PADD 5 refiners and Mexican crude exports rebounding to almost 1 million b/d.

Ukraine Signs US LNG Supply Deal. Ukraine’s largest private energy company DTEK agreed to buy LNG from US energy firm Venture Global, receiving cargoes from Plaquemines LNG starting later this year until end-2026 and also purchasing 2 tmpa from Calcasieu Pass 2 once it starts in 2026.

EU Eyes Russian Gas via Azerbaijan. According to Azerbaijani top officials, the European Union has asked Azerbaijan to facilitate a gas transit deal with Russia as the Ukraine transit agreement for Russian piped gas is set to run out this December, still seeing supplies of around 15 bcm per year.

TMX Running at 80% Pipeline Capacity. Canada’s Trans Mountain Pipeline is alleged to run at approximately 80% capacity with a little bit of spot activity being used, according to the operator’s CEO Mark Maki, adding that 22 tankers are expected to load at Westridge this month.

Saudi Aramco Expands into US LNG. Boosting its gas presence, Saudi Arabia’s national oil company Saudi Aramco (TADAWUL:2222) has signed a 20-year LNG supply deal with US firm NextDecade (NASDAQ:NEXT) for 1.2 mtpa of liquefied gas from the Rio Grande LNG facility.

Senegal Joins Club of Oil Producers. The African Republic of Senegal has officially become an oil and gas producer after Australian oil major Woodside Energy (ASX:WDS) announced first oil at the 100,000 b/d offshore Sangomar project, eyeing exports of medium sour barrels.

Europe Slaps Tariffs on Chinese EVs. The European Commission has proposed increasing import duties on Chinese electric vehicles up to 38.1%, up from the 10% tariff already imposed on external carmakers, potentially triggering a trade war between Brussels and Beijing.

Louisiana Air More Toxic Than Ever. According to a Johns Hopkins study, the toxic gas ethylene oxide is detectable in southeastern Louisiana at levels thousand times higher than what’s considered safe, mostly along the ’Cancer Alley’ between Baton Rouge and New Orleans, home to 25% of US petrochemical production.

Copper Smelters Are Shutting Down Globally. According to copper analysts, roughly a fifth of global copper smelting capacity was suspended in May, mostly for seasonal plant maintenance, up from 17.4% in the same month last year, helping to halt the free-fall in copper futures.

API Takes Action Against Biden Emission Mandates. The largest oil trade group in the US, the American Petroleum Institute, filed a federal lawsuit against the Biden administration’s new tailpipe emission rules that force carmakers to scale EV output up to 56% of all car sales by 2030.

Trump Promises Reversal of Arctic Drilling Ban. According to media reports, US presidential candidate Donald Trump vowed to reverse a drilling ban on public lands in Alaska, a year after the Biden administration banned upstream activities in the Arctic National Wildlife Refuge.

So the issue with oil is that the POO must, like the 3 bears, be just right. Too high, we get UST market chaos, too low and US Shale oil shuts down. US Shale oil is critical for supply at the margin.

Clearly there is an oil war occurring right under our noses.

I definitely want to be long oil, but, will 'try' to time that long position.

Liquidity:

Yesterday I posted an article on the leverage in the Repo market. Today data on liquidity:



Now the Treasury TGA account can increase liquidity and has been used in exactly this way by Yellen.

There is a critical mass of 'Reserves' at $1.5 Trillion. Market chaos ensued last time this level was hit. There is a pernicious assumption that it is still the same level. Is it? No-one actually knows. If it's not, the market is horribly over-priced.

Mr fff:



I have to agree, currently we are in a tricky market. Choppy. Wednesday, on the back of the CPI number, everything surged higher. The Fed was benign as far as volatility...follow through? No chance, weak ever since.

Part of the issue is demonstrated in the market carpet chart. A highly imbalanced market dominated by 5 stocks and everything else weak. The sector returns are and have been weak, yet the index flirts with ATH. That is not an easy trading market.



jog on
duc

 

[ducati916]

For next week:



My positioning:

XLB Put $89-$87
XLC Put $84-$81
XLE Call $87.50-$90
XLRE No trade
XLK No trade
XLI Put $121-$117
XLP Put $77-$75.50
XLV Put $145-$143
XLU Put $70.50-$68

jog on
duc

 

[peter2]

Nice work with your option trades last week. Who knew that XLK would spike as high as it did?
NVDA and the Apple AI news pulling the US index higher. Market breadth is dreadfully thin. Bear market thin but it's going up.

WTI oil back into it's neutral trading range. I'll buy again when it dips down to $73.

Good to see the 20% copper smelters closing for seasonal maintenance. May stop price drifting lower next week.

Possible "peak gold" production eh? They'll be looking at the recent lava flows then for gold once they cool down.

 

[ducati916]

Nice work with your option trades last week. Who knew that XLK would spike as high as it did?
NVDA and the Apple AI news pulling the US index higher. Market breadth is dreadfully thin. Bear market thin but it's going up.

WTI oil back into it's neutral trading range. I'll buy again when it dips down to $73.

Good to see the 20% copper smelters closing for seasonal maintenance. May stop price drifting lower next week.

Possible "peak gold" production eh? They'll be looking at the recent lava flows then for gold once they cool down.

Having read your thread, will you continue to trade the US? The instruments available make it far more attractive than the ASX, specifically Options.



Starting to look a little ominous.



The Dow is particularly interesting. These are not small companies. Why, in a 'strong' economy are they starting to show signs of topping?



USD up = everything else down. USD still looks bullish. Now the Treasury and Yellen are definitely trying to force the USD lower as a strong USD creates havoc in the UST market. Yellen cannot allow that massive carry trade to unwind.



Just when you thought it was safe to go back into the water.



I like energy for a trade higher. Now I use XLE which is not a direct equivalent in the ETF space. USO is a direct equivalent, however, that also can break free from the Futures and Cash markets.

In any case I'll play XLE this week.

pg. 2

jog on
duc