Trading the Trend

[ducati916]

Noted bonds were falling too.
In a day like that, not many places to hide
Probably a different thread but would be interesting to know your feelings about diversification Mr Duc
After GFC and quite a few day crashes observations, my initial textbook feelings about diversification for risk management between asset classes has been shaken.
On a day like today, for a us investor, everything but cash..real cash, not bonds was a nearly 1% loss....
Not that small in the scale of things

Diversification:

(i) Job/Career;
(ii) Business (commonly known as a side hustle, usually internet based);
(iii) Financial instruments (Bonds/Stocks/Commodities);
(iv) Land (Rentals & Farmland)
(v) Physical Gold/Silver;
(vi) Collectibles (Art/Cars/Wine/whatever).

That is my allocation, not in any particular order.

jog on
duc

 

[qldfrog]

But let's not derail, i see today's results as actually quite positive trend wise
will be interesting to see what my own crystal ball systems tell me.

 

[ducati916]

But let's not derail, i see today's results as actually quite positive trend wise
will be interesting to see what my own crystal ball systems tell me.

Today is a zero event. As JP Morgan said: stocks fluctuate. Risk is this:

jog on
duc

 

[ducati916]

Market as an overview:

XLU nicely stabilised. I added. Now this is simply for a growing dividend over time. No expectations of astronomical growth or capital appreciation. Purely cash-flow.

jog on
duc

 

[over9k]

So I ended up mixed!

Net it was negative, but ebay actually gained. It's actually been the one that's kept me in the green on all the other days that I saw red everywhere else too.

I'm actually thinking about pivoting more into it for this reason. Not a net change of skin in the game, just a reallocation. But plenty of other work to do today.


unrelated - duc, what platform do you use?

 

[ducati916]

I'll get to your other response later

While I'm not holding my breath, the reserve currency issue is actually an important one and I'm waiting to see what you have.

W/E is fine.

jog on
duc

 

[over9k]

Well I can give you a quick & simple response here: Why is the USD used and not something else? Why hasn't the euro or yuan or in fact anything else replaced it?

There are certain things a currency *needs* to be in order to be what the USD is at the moment and no other currency can do it or is even on the way to looking like it could do it.

 

[over9k]

TSLA and ZM. Bubble or sustainable? There is a fierce debate raging in 'Electric Cars' re. TSLA. ZM I just consider a passing fad, too easily replicated. Their best bet would to be bought up by one of the giants if they had something worthwhile. When I say worthwhile something that held a patent and had value.

Another quick one: Zoom's a networked good like facebook. Everyone use it, because everyone use it. A bit like back in the myspace vs facebook days, the war's now well & truly underway. Its only real competitor is MS teams, and that's obviously unusable on a mac, hence zoom's cross-platform advantage.

I do own microsoft as well for precisely that reason though but MS have been very late to the party - zoom now has incumbent advantage and MS need to dislodge it. Even then, the cross-platform advantage of zoom is significant. Think about the ability to even use it on your phone's camera at the airport or something if need be and you start to understand its ubiquity.

Tesla will correct, but as to what to is another question. Could be anything. The rally lately was insane so logic is well & truly out the window with that one.

 

[over9k]

Also, it's not often I agree with the loons on CNBC but I think this little snippet's actually accurate:

Everyone's bailing because there's no announcement of anything to keep the market propped up between the job support payments etc ending and the next batch of stimulus, so they're just getting out until there's some certainty.

But as if there's not going to be another massive stimulus package though, especially with the election coming up.

 

[Lucky777]

My own opinion disclaimer(short sighted).

Teams & Slack to be main usage for B2B moving forward. Zoom will lose value soon.

I’ve moved from tech and looking into discretionary & communications atm, will let you know my positions.

I’ve read the whole thread, pretty interesting perspectives. Imo, macro perspective is huge now, individuals stocks there is to be made short term, but long run I would start value investing.

 

[over9k]

Interesting, slack's the one I have the least confidence in/had so little confidence I never bought it.

I was eyeballing it in may and it missed earnings estimates by 25% at the start of june, fell off a cliff as a result, and hasn't recovered. One of those ones I'm glad I never bought.


Unrelated: Futures up today, tech-heavy nasdaq the highest. My portfolio usually moves about twice what the nasdaq does (in either direction).

If that happens, this week has been hilarious.

Also, duc, RE: nvidia:

https://techreport.com/news/3470476/nvidia-tsmc-5nm-7nm-ampere-hopper/

https://www.tweaktown.com/news/7203...city-at-tsmc-for-next-gen-gpu-cpus/index.html

https://www.techpowerup.com/266656/tsmc-secures-orders-from-nvidia-for-7nm-and-5nm-chips

TSMC is miles ahead of much of its competition and thus does the manufacturing for many of the chip designers like nvidia. As you can see, between them & AMD, all of TSMC's manufacturing capacity has been bought up in anticipation of a bonkers Q4 when their next gen stuff hits the shelves in time for the already bonkers xmas season.

Therefore little surprise that TSMC's earnings have skyrocketed.

 

[qldfrog]

For anyone interested, i personnally use google meet.no need for ms account, and while i can not fake a sea background as in zoom, much simpler better videoconferencing..and free of course
Slack is crap imho but probably generational

 

[ducati916]

So what does tomorrow bring?

So the $VIX has actually passed under our support line and it (potentially) will act as resistance. The trend line continues inexorably lower. I believe that vol. will remain contracted tomorrow.

QQQ massively oversold. I would expect a bounce tomorrow.

Both % of 20EMA and 50EMA are high. They can (and have) go higher for short periods. The question is will they tomorrow?

The 'tie-breaker'. Given low vol, given the o/s nature of QQQ, and given the above, my best guess is that we trade higher through the resistance line of 20/50EMAs.

We have had a number of w/e where the Bears have held the whip-hand, time for the Bulls to hold the whip-hand going into the w/e.

Financials and RE are sitting on their 50s. I think they move higher. The fundamentals are positive and improving, nothing really to hold them back currently. The credit issues are resolved (for the moment) and will probably fluctuate a little going forward, but nothing major atm. I think we move into next week ready to challenge the all-time-highs in SPY.

jog on
duc

 

[ducati916]

Well I can give you a quick & simple response here: Why is the USD used and not something else? Why hasn't the euro or yuan or in fact anything else replaced it?

There are certain things a currency *needs* to be in order to be what the USD is at the moment and no other currency can do it or is even on the way to looking like it could do it.

Well I know, I'm really just wondering whether you do since you semi-raised the issue.

jog on
duc

 

[ducati916]

My own opinion disclaimer(short sighted).

Teams & Slack to be main usage for B2B moving forward. Zoom will lose value soon.

I’ve moved from tech and looking into discretionary & communications atm, will let you know my positions.

I’ve read the whole thread, pretty interesting perspectives. Imo, macro perspective is huge now, individuals stocks there is to be made short term, but long run I would start value investing.

Welcome to the thread. Look forward to your contributions.

jog on
duc

 

[ducati916]

Credit issuance:

The worst is over for corporate credit? Evidence of healing continues apace in the bond market, as investment grade and high-yield spreads have retraced most of their March widening. Primary markets remain wide open as issuance continues to blow past that of a year ago, with the $1.2 trillion in fresh investment grade supply year-to-date already topping 2019’s full-year figure while junk issuance is up 42% from this time last year, according to CreditSights.

More than a few investors are looking askance at that issuance spree, as 62% of respondents in the July BAML fund manager survey indicated they want CEOs to prioritize balance sheet improvements, while 27% preferred increased capital expenditures and only 9% asked for shareholder-centric maneuvers like increased dividends and stock buybacks. Even prior to the pandemic, there was plenty of room for improvement. According to data from CreditSights, corporate liabilities stood near a record-high 135% of GDP as the calendar turned to 2020, compared to 105% in 2007.

Edward Altman, professor emeritus of finance at the NYU Stern School of Business expressed confusion to Bloomberg yesterday over the issuance deluge: “I thought the market would gain some much needed deleveraging with the Covid-19 crisis. [Instead], it seems like companies again are exploiting what seems to be a crazy rebound.” Altman predicts that more than 60 U.S. companies with liabilities above $1 billion will file for bankruptcy by year-end.

Recent fundamental developments suggest that those concerns are well founded. In a report today, Moody’s Investors Service relays that its so-called B3N list (meaning those rated single-B-minus with a negative outlook and below) rose to 414 companies at the end of June, double that of a year ago. That means that 27.5% of the high-yield universe is now concentrated within that vulnerable ratings category, topping the financial crisis-era peak of 26.1%. The rating agency’s default forecast for that B3N cohort now stands at 34%, down from a recent peak of 43% but up from 22% last year.

Credit issuance (no doubt backed by the Fed programmes to buy) is once again, far higher than it should be. There will be another crisis at some point almost certainly. Just not today.

The Fed meanwhile, show a fifth straight decline left Reserve Bank credit (the sum total of interest-bearing assets) at $6.88 trillion, down $34 billion from last week and the lowest reading since May 13. The three-month annualized growth rate has now slowed to 124% from 217% last week and 684% on June 18.

Speculation is (clearly) rife:

Trading platform Charles Schwab reports today that new retail brokerage accounts skyrocketed to 1.65 million in the second quarter, far above the consensus 1.08 million and more than four times last year’s 386,000 figure. CEO Walt Bettinger noted that overall daily trading activity in the second quarter rose a cool 126% from a year ago.

In addition, Matthew Klein of Barron’s posted the following screenshot from the Schwab website on Twitter this afternoon:

jog on
duc

 

[ducati916]

For the Banks:

NPLs could (drop) and surprise to the upside. Financials were pretty strong today. All the fundamental data coming through atm is indicating that the Financials are ready to move.

jog on
duc

 

[over9k]

Well I know, I'm really just wondering whether you do since you semi-raised the issue.

jog on
duc

Well I was basically saying that whilst I agree that in theory, any fiat currency could do it, there are more conditions (significant ones) which must be met other than being a fiat currency, and no other currency even comes close, hence why the USD isn't going anywhere.

Related to thread: U.S jobs improvement now at its slowest in 3 months, suggesting a peak soon.

 

[ducati916]

First week of earnings culminating:

78% of companies that reported this week beat consensus analyst EPS estimates, while 72% topped consensus sales estimates. Those are both strong numbers. In terms of future projections, 16% of companies raised guidance, and not one company lowered guidance. That's rare even with the very low number of reports so far.

The important takeaway is that not 1 lowered guidance. I don't (obviously) know whether that will play out going forward (very small sample) but if it does, that is bullish information. Certainly the economic data coming through atm is indicative of that being the case for most. There will obviously be sectors where forward guidance could be very bad.

jog on
duc

 

[ducati916]

TSLA involved in dodgy accounting? Pretty long read.

https://insideevs.com/news/433383/tesla-warranty-repairs-goodwill-lemon-laundering/

jog on
duc