The New Bull Market

[Chronos-Plutus]

While I avoid saying 'never', I would be pretty surprised if we return to March lows (Indices).

jog on
duc

Although I think Trump will win the next election; the market doesn't seem convinced. Then we have Jay who now looks like will just sit on his hands until the US election is over.

So I see the market drifting lower at least until the US election is over. Of course I could be wrong but this is how I am going to play it.

After the US election; more certainty and opportunity with less risk, more positive fiscal policy rhetoric, and more positive monetary policy rhetoric.

I have learnt to trade/invest on what I think the rest of the market will think; not what I just think. In saying this, I could be way off base on this call; maybe not March lows, but the trajectory will be clear in my opinion.

 

[over9k]

Corrections Officers
Police Officers
Firebrigade
Aircrew
Nurses
Doctors
Construction workers
Electricians
Plumbers
Carpenters
Road workers
Drivers
Chefs
Military
Etc, etc, etc.

None of these can work remotely. So while you can find the odd Tech. Co. that can work remotely, the majority of the population cannot.

jog on
duc

I never said that it was the majority of the population...

You seem to have lost confidence in your bull market thesis?

 

[ducati916]

1. I never said that it was the majority of the population...

2. You seem to have lost confidence in your bull market thesis?

The problem that I have with your posts is that they are poorly articulated, contradictory and usually in hindsight. You also try when you can, to hedge your opinion, to later claim a 'victory'. Then, when the issues are highlighted, there is some excuse as to that's not what you were saying etc. None of which I find particularly useful.

The latest example of this:

1. Majority of the population:

Which is simply a continuation of other posts on the subject. The inference being that 'remote' working is here to stay and that the US economy is fundamentally changing: ergo, Tech. companies remain attractive investments because of that.

Tech. has always been a good investment. The difficulty is separating the wheat from the chaff early enough in their genesis to profit. How to pick the MSFT, GOOG, AMZN from the myriad numbers that crash and burn. Hence, hold ETFs that hold Tech.

The US is now predominantly a service economy. A service economy cannot as a whole move to remote working. There are a number of Tech. companies with employees who could if they chose to. I (my opinion) doubt they will. When you read the quote from AAPL CEO, he does not actually state categorically anything. It is a prediction. The statement is heavily hedged.

You like ZM. For ZM to justify its lofty valuation a certain % will need to embrace remote working going forward into the recovery Does this happen?. Maybe yes, maybe no. ZM is a one trick pony. It is a trick that I believe has a limited shelf life. Which is not to say it cannot be traded profitably. Clearly it can. Clearly to date it would have been very profitable to do so. That doesn't (in my book) transform it from a POS into a stock that I would (or could) hold for a long period of time.


2. Re. Bull Market

There would seem to be no ambiguity in those statements.

jog on
duc

 

[ducati916]

So the intra-day VIX

Would suggest we are finding a bottom.

jog on
duc

 

[ducati916]

Fallout from the negative oil price:

The Mysterious London Traders Accused of Manipulating Oil Markets — and the Anonymous Hedge Fund, Rare-Coin Expert, and Day Traders Who Are Fighting Back

Tracking the culprits behind April 20.

www.institutionalinvestor.com

Too long an article to C&P. But well worth the read. Interactive Brokers implicated in the fiasco. Well worth reading if you are an IB client.

Oil Patch News:

Market Movers

- GE (NYSE: GE) announced that it was exiting the coal business. A day later, GE said its wind turbines would be used in the world’s largest offshore wind project.

- Oasis Petroleum (NASDAQ: OAS) missed a debt payment and has entered a 30-day grace period. The company said it would continue talks with lenders.

- Sempra Energy’s (NYSE: SRE) Cameron LNG project could remain offline through October, due to challenges in restoring power after Hurricane Laura hit the Gulf Coast.

Tuesday, September 22, 2020

Oil prices fell on Monday on renewed concerns of coronavirus-related lockdowns. Oil edged up slightly on Tuesday. “As any new restrictions will likely be more localized, the oil demand recovery should still continue, although at a slower pace with the easiest demand gains behind us,” UBS oil analyst Giovanni Staunovo told Reuters.

Vitol sees tough 2H2020 on weak demand and low volatility. Oil trading firm Vitol sees tepid demand growth and low trading activity in the short run, making the second half of 2020 rather bleak for traders. “Obviously, with crude trading, it’s difficult to maintain business volumes because there is less crude to market and trade; there’s less being produced,” Vitol CEO Russell Hardy told Reuters.

Oil-producing countries squeezed by prices. Middle Eastern oil producers are increasingly relying on debt markets to bridge the gap in government finances. Abu Dhabi just completed a $5 billion, 50-year bond. For now, Gulf States are still in good standing with debt markets, but with oil prices showing no signs of returning to pre-pandemic levels, how long can it last?

Libya restarts oil production. Libya’s National Oil Corporation will restart production from certain fields and some exports of crude oil, the company said. The force majeure will be lifted from fields and ports that are free of the presence of paramilitary groups and mercenaries, but remain in effect for those where there are still such groups, which hamper the work of NOC. Libya’s National Oil Corporation (NOC) sees oil production rising to around 260,000 barrels per day (bpd) next week, up from some 100,000 bpd before the blockade.

Shell preparing major cost-cutting. Royal Dutch Shell (NYSE: RDS.A) is preparing a plan to cut 40 percent from the cost of producing oil. As Shell undergoes its clean energy overhaul, it will focus its oil and gas operations on a few core areas: Gulf of Mexico, Nigeria and the North Sea. Shell will make deep cuts to its retail fuel division, its LNG division, according to Reuters. The overhaul will be Shell’s most extensive in modern history and is expected to be completed by the end of the year.

Commodities and currencies hurt if dollar strengthens. The dollar has strengthened a bit over the past month, putting pressure on a variety of commodities and currencies. A new study says that the dollar is still undervalued.

Permian has too many pipelines. It wasn’t long ago that oil in Midland traded at a steep discount due to pipeline bottlenecks and surging production. Now, the Permian is producing 4 mb/d, but has 3 mb/d of excess pipeline capacity, according to the Wall Street Journal. Overcapacity was a brewing problem even before the pandemic, but with production flat-lining, the gap is growing even larger.

EV tipping point by 2024. Analysts have estimated that battery pack prices should drop to US$100/kWh so that electric vehicles have a chance to compete with cost with the internal combustion engine. Automakers and industry experts believe that the US$100/kWh milestone could be reached as early as in 2024. Others say that threshold will arrive much sooner.

Tesla’s “Battery Day.” Tesla (NASDAQ: TSLA) is holding its Battery Day on Tuesday, and Elon Musk has hinted that he would announce major advancements in battery technology. The event starts at 4:30 p.m. ET.

East Med states establish gas forum. Egypt, Israel, Greece, Cyprus, Italy and Jordan established the East Mediterranean Gas Forum (EMGF) as an intergovernmental organization headquartered in Cairo. The forum will present a united front to gas development at a time when Turkey has disputed development near its borders.

Brazil’s offshore oil boom still alive. The COVID-19 pandemic and March 2020 oil price collapse did little to slow the oil boom underway in Latin America’s largest economy. Petrobras’s second-quarter 2020 commercial oil output grew 4.1% year over year to almost 2.5 million barrels daily.

Stranded asset risk at $40 oil. High-cost oil projects are unprofitable at $40 per barrel, and if oil remains stuck at that price level, reserves will be left as “stranded assets.” If the world manages to comply with climate targets limiting warming to 1.5C, more than 80 percent of oil, gas, and coal assets would be worthless.

Mayors of 12 major cities to divest from fossil fuels. 12 cities representing over 36 million residents pledged to divest from fossil fuels. The cities include: Berlin, Bristol, Cape Town, Durban, London, Los Angeles, Milan, New Orleans, New York City, Oslo, Pittsburgh and Vancouver.

China plans new storage. China is planning new storage hubs in Zhejiang province for energy and agricultural products.

Refining margins remain weak. Refiners are trimming their production as margins remain low amid weak demand for fuels. China’s refineries are expected to cut processing in September, Reuters reports.

China aims for net-zero by 2060. China will aim to reach a peak in emissions by 2030 before winding down emissions to reach carbon neutrality by 2060, President Xi Jinping said on Tuesday.

jog on
duc

 

[over9k]

The problem that I have with your posts is that they are poorly articulated, contradictory and usually in hindsight. You also try when you can, to hedge your opinion, to later claim a 'victory'. Then, when the issues are highlighted, there is some excuse as to that's not what you were saying etc. None of which I find particularly useful.

The latest example of this:

1. Majority of the population:

View attachment 112135

Absolute bullsh!t. Not once have I ever even INFERRED that we're talking about the majority of the population.

The charitable way to say that what goes on is that you constantly misinterpret what I'm saying, strawman it, defeat the strawman, start masturbating over your own "intellect", and then crack the sh!ts when I point out how wrong you were claiming that it wasn't your inability to understand the most basic of statements, oh no, it was my articulation.

The less charitable way to interpret things is that you deliberately misrepresent and misconstrue what I say to give yourself something to "defeat" and therefore humiliate me (or so you think) in revenge because I've embarrassed you a few times now and your ego's been bruised, which it CLEARLY has. Your posts absolutely drip with conceit constantly.



I'll pay $1000 to any charity you care to mention if you can find anywhere where I even inferred that there's some kind of fundamental shift going on in the entire economy/the majority of the population are going to be working from home after the pandemic.

You are so unbelievably full of ****.

Which is simply a continuation of other posts on the subject. The inference being that 'remote' working is here to stay and that the US economy is fundamentally changing: ergo, Tech. companies remain attractive investments because of that.

No, the inference is that SOME remote working is here to stay. Stop putting words in my mouth.



Zoom's last earnings report was 400% of estimates. You love your technical data but can't see the forest for the trees. You want me to get ultra-technical and ultra-complicated about things which just aren't.

I originally bought zoom at $198 and it's now knocking on the door of 500. How do your returns compare?

The fact that you won't even mention your own returns should really tell everyone just how much of a fraud you really are.

 

[ducati916]

Absolute bullsh!t. Not once have I ever even INFERRED that we're talking about the majority of the population.

I'll pay $1000 to any charity you care to mention if you can find anywhere where I even inferred that there's some kind of fundamental shift going on in the entire economy/the majority of the population are going to be working from home after the pandemic.

You are so unbelievably full of ****.


No, the inference is that SOME remote working is here to stay. Stop putting words in my mouth.

So below is the evidence from just the last couple of days. I could probably go back further in time and find additional evidence, but really who cares.

So what say ye?


jog on
duc

 

[over9k]

Sorry, is there a part there where I say that this encompasses the majority of the population? And/or that the entire economy is fundamentally changing for good? Because I can't see it.

I have said that after coronavirus is done, we won't return to the way things were. And I'll say it again:

A significant amount of work will continue to be done remotely. There is no way to put an exact figure on this, though some companies have flatly stated that they expect to keep X% remaining in a remote-working arrangement. That's the closest you'll ever get to a numerical figure, and it'll only ever be for one company each time you get a number. Those companies will also obviously be reviewing these arrangements constantly.

If you think you can fool me into trying to put an exact figure on something that you know there cannot be an exact figure for, you are mistaken. This is not my first rodeo


The fact that you completely ignore every single time I ask you what your returns have been is telling.

 

[over9k]

Honestly man, I don't want to argue with you. I hate arguing. I'd much rather actually talk to each other, discuss things, and have you recognise what I can: That everyone in the world knows something that you (or, I) don't.

But you seem determined to be as prickly and belligerent and argumentative as possible every single time I even so much as post something you aren't aware of (let alone contradict you) so what other option is there?

I'd much rather we just talked about stuff and learned from each other, but your ego doesn't seem to be able to handle this.


Here, I'll state something:

There are some things that you can/have determined or figured out that I haven't.



Are you capable of admitting the same about me?

 

[ducati916]

Sorry, is there a part there where I say that this encompasses the majority of the population? And/or that the entire economy is fundamentally changing for good? Because I can't see it.

I have said that after coronavirus is done, we won't return to the way things were. And I'll say it again:

A significant amount of work will continue to be done remotely. There is no way to put an exact figure on this, though some companies have flatly stated that they expect to keep X% remaining in a remote-working arrangement. That's the closest you'll ever get to a numerical figure, and it'll only ever be for one company each time you get a number. Those companies will also obviously be reviewing these arrangements constantly.

Given that the US is predominantly a service based economy, a significant amount of work cannot be completed 'remotely'.

Your previous reference:

You can pay the $1000 to the SPCA.

jog on
duc

 

[over9k]

There is no part of any of that where significant is stated to be synonymous with majority.

Are you being stupid on purpose?

 

[qldfrog]

@over9k, get some sleep and have a walk.This is not discussion anymore

 

[over9k]

No kidding. I'm done with him.

 

[ducati916]

Just an update:

In summary: the breadth is narrow, suggesting that there could still be some downside. We are in the process of finding a bottom however.

We are 'near' support levels, but not on them and far from having them confirmed. The next couple of days will be probably unpleasant if you are long.

The macro fundamentals are however unaltered, which means that this is simply a correction, not a return to the lows.

jog on
duc

 

[Smurf1976]

A significant amount of work will continue to be done remotely. There is no way to put an exact figure on this, though some companies have flatly stated that they expect to keep X% remaining in a remote-working arrangement.

It works for some as a full time thing, it works for others as a part time thing, then there's others for whom it doesn't work at all.

Impossible to put a figure on it as you say but it's a safe assumption that the answer isn't zero. There's both money and time to be saved by business and employees alike so at least some will stick with remote working.

 

[ducati916]

Updated VIX

Says it all really.

I'll update the market close charts later. For the moment, not really a good day for any sector.

The master chart: one VIX to rule them

If (whatever) has rattled the Bond market settles, then the Stock market will settle. From the above, it looks as if tomorrow will either (a) calm the farm or (b) really let the chickens loose.

An update of market close charts will help make a probabilistic best guess.

Although, if flippe-floppe-flye is short:

jog on
duc

 

[qldfrog]

It works for some as a full time thing, it works for others as a part time thing, then there's others for whom it doesn't work at all.

Impossible to put a figure on it as you say but it's a safe assumption that the answer isn't zero. There's both money and time to be saved by business and employees alike so at least some will stick with remote working.

As long as everyone remember that if you can do your job remotely,any Indian Vietnamese or African can do it for much cheaper...
This is a move to the last stage of globalism.. everyone paid $2 an hour.
Where do you actually stand in that context?
What is so unique in your job that no team can do it from overseas?
And what about your customer's job, if they are paid $2, how much will you charge them?
And going back from there to economy
if this is the trend, think about outsourcing software: we have been having call centers for decades,can you name a call center software company which could have made a westerner rich?
If people are paid $2 an hour, the tools they use are free..aka pirated or priced accordingly so do not expect a bonanza of zoom profits...
My opinion only but one of my first job after moving here was developing call center software outsourced from the US in the 1990s.
The IT was then outsourced to India until the US owners gave up....no profit for the West

 

[cutz]

As long as everyone remember that if you can do your job remotely,any Indian Vietnamese or African can do it for much cheaper...
This is a move to the last stage of globalism.. everyone paid $2 an hour.
Where do you actually stand in that context?
What is so unique in your job that no team can do it from overseas?
And what about your customer's job, if they are paid $2, how much will you charge them?
And going back from there to economy
if this is the trend, think about outsourcing software: we have been having call centers for decades,can you name a call center software company which could have made a westerner rich?
If people are paid $2 an hour, the tools they use are free..aka pirated or priced accordingly so do not expect a bonanza of zoom profits...
My opinion only but one of my first job after moving here was developing call center software outsourced from the US in the 1990s.
The IT was then outsourced to India until the US owners gave up....no profit for the West

Yep so much for globalization, even legal/accounting/admin/medical/journalism/ect/ect aren't safe from offshoring, GDP growth coming from immigration which has now been shelved, too much short termism from our governments.

Good thing is trades have become highly valued these days, although level of skill required downgraded.

Also the resurgence in the fixing/ upcycling is good to see, demand has been building at auction houses and second hand stores. Handy folk are realizing it makes much more sense buying quality second hand and fixing rather than buying new junk that's sold at the big hardware stores.

 

[qldfrog]

the issue I see is that does not produce much growth even mid term into our economies
US will do OK unless democrats win, and US is the focus of this thread, but I find it hard to extrapolate to our own situation.
Few onsite miners and farmers are needed...The rest can/is already done remotely.A whole mine processing center was shipped in with filipinos workers/ engineering next to us in New Caledonia, we are seeing the same with chinese workers flying in for some mining works.
What's is left, and how much can you sell a coffee, or pay for a haircut if the only money stream in Oz is corruption prone royalties..
Tradies are uber expensive here and only because people can afford/absence of competition..yet the last influx of migrants might change that quickly, even if COVID (political reaction) has been a saviour in that regard.
Anyway, let's not sidetrack the US focus of this thread.My apologies @ducati916

 

[ducati916]

Things still looking ugly:

The stock VIX is in new territory and of no use currently. The Bond VIX (which is actually more important) still has not hit the falling resistance line. That could happen tomorrow, we'll see.

Meanwhile:

Looking ugly.

We have hit support here. This is a major, multi-year support level. I would expect this to hold.

Not much help.

The next 2 are 'sentiment' based on a long running newsletter. I include them just out of interest.

Confirm (if nothing else) that we are at an extreme reading. Extremes (usually) mean revert.


jog on
duc