Trading the Trend

[ducati916]

You mentioned some kind of macro indicator - a 2nd coronavirus wave would be a massive macro indicator no?

No.

jog on
duc

 

[ducati916]

All things $VIX:

If you look at the earlier chart, you will see that horizontal resistance held and we are now moving back to trend.

What you wouldn't want to see is still an elevated VIX with a rising market or some other weird divergence. ATM everything looks 'normal'.

jog on
duc

 

[ducati916]

Historically:

If you notice, all the red spreading across the page are days/weeks/etc from 2008. This was a true bear market. The rest are green.

The question is: does the virus = derivative based losses? The answer is crystal clear to me.

jog on
duc

 

[qldfrog]

FWIW, was surprised yesterday night to see a bullish buy for the market based on asx end of day data, before US open.i liked that and last night is agreeing
I am really going to refine these indicators
They are telling me, all good stay in

I nevertheless had my worst day on asx yesterday: paper loss

 

[over9k]

I bought all the travel/airlines/airports at about 11am yesterday - timed it perfectly almost to the minute. I was up 4% within a couple of hours after the national cabinet meeting and talk of reopening the borders in july. I'm expecting more news like that to result in strong rallies for the travel/airline related stuff. Combine that with the U.S rally I sold off at last night and it's been a really good couple of days for me.

I'm now sitting on mining, energy, and travel equities in aus that I've bought at 20% off the recent peak. Boeing rallied about 10% yesterday so sold that at way above what I expected to as well.

Now need to time a buy back in with boeing before the 737 max certification flight and what will be fairly solid jobs data on the 3rd of july. Will probably sell the following week. Time to buy is probably when the next batch of bad coronavirus data is released. Might trim my long zoom position a bit to do it.

 

[over9k]

Forget the media. If you traded to the media you would go broke very quickly. One example:

View attachment 104698

There are hundreds of examples.

People love a narrative. They want to know causation, even if causation is impossible to discern. The media provide that narrative. It has little if anything to do with what moves markets.

jog on
duc

Sure but it wasn't the media that torched things, it was the data itself - the media was reporting on virus data, not a response to what the market did. Your examples show media reporting on the stock market, not virus data. Different thing.

 

[qldfrog]

Sure but it wasn't the media that torched things, it was the data itself - the media was reporting on virus data, not a response to what the market did. Your examples show media reporting on the stock market, not virus data. Different thing.

Do not give the virus too much economic weight now that is is less of an unknown, the damages are done by the reactions, not the virus

 

[ducati916]

1. Sure but it wasn't the media that torched things, it was the data itself -

2. the media was reporting on virus data, not a response to what the market did. Your examples show media reporting on the stock market, not virus data. Different thing.

1. If the market cared about the virus, do you think the market would have moved in a V to that data? The market could care less.

2. It was you who raised media as a causation:

If you wish to assign causation, be my guest. As far as I am concerned, the virus is a non-issue as far as the market is concerned.

jog on
duc

 

[over9k]

Even if everyone ignore it (which they're not going to do in perpetuity), there's still going to be huge economic costs associated with the actual virus itself - people off work for weeks while they recover for example, and that's just junior staff members with a high likelihood of survival. Think about if someone more senior like an executive or board member gets KO'd by it, or even worse, seeing as the death rate increases exponentially with age, killed.

These are both HUGE costs for business even if we assume the general public are going to just go about their daily lives and continue getting themselves sick - which they aren't going to continue doing.

I just don't see how you can say that the market doesn't care about the virus when one spike in cases torched it 4% literally overnight. No changes in lockdowns or change in restrictions, JUST a spike in cases and the market nosedived.

 

[ducati916]

I just don't see how you can say that the market doesn't care about the virus when one spike in cases torched it 4% literally overnight. No changes in lockdowns or change in restrictions, JUST a spike in cases and the market nosedived.

The pullback, correction was flagged on this thread days before it actually took place, based on objective measures. To assign causation to a 'spike' in infections is simply naive.

However you are entitled to your opinion.

jog on
duc

 

[ducati916]

Even if everyone ignore it (which they're not going to do in perpetuity), there's still going to be huge economic costs associated with the actual virus itself - people off work for weeks while they recover for example, and that's just junior staff members with a high likelihood of survival. Think about if someone more senior like an executive or board member gets KO'd by it, or even worse, seeing as the death rate increases exponentially with age, killed.

So let us assume the above is correct.

That is some pretty hefty stimulus already added to the economy.

The Fed. as always, has the Market's back.

Re. Virus v Derivatives: what do you estimate the value of the lost consumers will total? Then compare the value of Derivatives and the impact when they blow-up as they did in 2008.

Now tell me why the market 'cares' about the virus in the same way as it cared about derivatives in 2008.

And just why I hold DFEN

jog on
duc

 

[gartley]

The market holds at the 20EMA/200EMA/300 level.

View attachment 104697

It's the weekend. The Bears could gain no traction on the follow through. By Monday they will be paranoid. Monday the market could well gap higher and continue running to close the gap. Even if it doesn't and we churn sideways for a couple more days, the Bear's chance is gone.

jog on
duc[/QUOIt wa

Was a huge move down on Thursday on big vol. Bears expect much follow through in the short term, just completed tail end of an impulse,
I doubt correction is over yet but as you say market may try to test gap or just meander for a few sessions

 

[gartley]

Some EW ideas here in the short term. The first one suggesting we have completed an impulse down and the second suggesting we are still in a 4th wave of an impulse OR a larger B wave . I note that the last 2 legs on the hr chart have unfolded as 3 wave moves so it could be the latter. There are at least 2 other wave count variants but they don't suggest much else different at this stage especially as 20 day cycle has lower projections that have not been invalidated yet

 

[over9k]

The pullback, correction was flagged on this thread days before it actually took place, based on objective measures. To assign causation to a 'spike' in infections is simply naive.

However you are entitled to your opinion.

jog on
duc

Nobody said it's going to tank at the time and speed that it did. I'm not disputing that there was always going to be a correction - I said as much in a previous post that it would have been a slow(er) melt as cases (relatively) slowly increased but the case spread of memorial weekend plus the george floyd riots caused several weeks' of virus spread in a couple of days and thus we saw several weeks' of case increases reported within just a couple of days.

We then saw several weeks' of market gains wiped out in just a couple of days, and you're trying to argue that this is a coincidence.

The market tanked in response to coronavirus data, not unemployment rates or mortgage defaults or in fact ANYTHING else, and it did so commensurate to the spike in the data. Big spike = big tank.

Again, are we really going to sit here and say "nope, coincidence"?

So let us assume the above is correct.

View attachment 104715

That is some pretty hefty stimulus already added to the economy.

View attachment 104710

The Fed. as always, has the Market's back.

View attachment 104713

Re. Virus v Derivatives: what do you estimate the value of the lost consumers will total? Then compare the value of Derivatives and the impact when they blow-up as they did in 2008.

View attachment 104711
View attachment 104712

Now tell me why the market 'cares' about the virus in the same way as it cared about derivatives in 2008.

And just why I hold DFEN

View attachment 104714

jog on
duc

I've never said there won't be more stimulus/intervention. One of my first posts was mentioning the parallels between the GFC and now RE: saying XYZ should happen but then some intervention flips the table. Same goes as to a nice bump we'll see on the 3rd of july release of the june employment data in the same way we did with the release on the 5th of june for may's data.

If your positions are entirely long then I'm not actually in disagreeance with you - what I'm saying is that there's going to be another hell of an organic drop in response to the spike in infections spreading, before the next quarter. THAT'S when you should be getting into your proper long positions.

On the ASX, I did exactly that just yesterday morning around 11am - all of my travel/aviation related trades were bought almost 20% off their recent peak and were up 4% just by yesterday afternoon, and I won't be selling them. If we get any more carryon about more infections spreading from the protests or whatever then that'll just be another dip to buy into.

 

[over9k]

Just FYI - I'm loving this perspective from you guys. I came to trading from a macro analysis & geopolitics background whereas you have clearly come from a mathematics/actuarial one.

I ALWAYS want to hear what the numbers guys have to say as both perspectives can always tell something the other can't.

 

[ducati916]

Was a huge move down on Thursday on big vol. Bears expect much follow through in the short term, just completed tail end of an impulse,
I doubt correction is over yet but as you say market may try to test gap or just meander for a few sessions

If the Bears were going to get follow through, they needed it Friday. Over the w/e they will lose that impetus.

jog on
duc

 

[over9k]

Don't know if you've been watching the news but several U.S state governors have called their reopenings off in response to the spike in cases during the week, exactly as was expected. We'll see if there's any more to come over the next couple of days. IIRC it takes about 2-3 weeks for the data to reflect the actual physical virus spread, so we can expect chaos 2-3 weeks after the riots started. The last one only a couple of days ago was the memorial day spread.


It might also prove useful if we state what time horizon we're talking about before we say whatever we're going to, too.

 

[ducati916]

Nobody said it's going to tank at the time and speed that it did. I'm not disputing that there was always going to be a correction - I said as much in a previous post that it would have been a slow(er) melt as cases (relatively) slowly increased but the case spread of memorial weekend plus the george floyd riots caused several weeks' of virus spread in a couple of days and thus we saw several weeks' of case increases reported within just a couple of days.

So with regard to the above:

We then saw several weeks' of market gains wiped out in just a couple of days, and you're trying to argue that this is a coincidence.

Far from coincidence, quite the opposite, this was totally transparent.

The market tanked in response to coronavirus data, not unemployment rates or mortgage defaults or in fact ANYTHING else, and it did so commensurate to the spike in the data. Big spike = big tank.

Virus, irrelevant.

Again, are we really going to sit here and say "nope, coincidence"?

See above.


I've never said there won't be more stimulus/intervention. One of my first posts was mentioning the parallels between the GFC and now RE: saying XYZ should happen but then some intervention flips the table. Same goes as to a nice bump we'll see on the 3rd of july release of the june employment data in the same way we did with the release on the 5th of june for may's data.

Employment data will only be relevant if it is good news.

If your positions are entirely long then I'm not actually in disagreeance with you - what I'm saying is that there's going to be another hell of an organic drop in response to the spike in infections spreading, before the next quarter. THAT'S when you should be getting into your proper long positions.

Maybe yes, maybe no. It will however have little to nothing to do with infection rates or death rates. The election however will increasingly be an issue.

On the ASX, I did exactly that just yesterday morning around 11am - all of my travel/aviation related trades were bought almost 20% off their recent peak and were up 4% just by yesterday afternoon, and I won't be selling them. If we get any more carryon about more infections spreading from the protests or whatever then that'll just be another dip to buy into.

I don't really follow the ASX.

jog on
duc

 

[ducati916]

Just FYI - I'm loving this perspective from you guys. I came to trading from a macro analysis & geopolitics background whereas you have clearly come from a mathematics/actuarial one.

I ALWAYS want to hear what the numbers guys have to say as both perspectives can always tell something the other can't.

Why are you arguing a medical perspective then?

jog on
duc

 

[ducati916]

Don't know if you've been watching the news but several U.S state governors have called their reopenings off in response to the spike in cases during the week, exactly as was expected. We'll see if there's any more to come over the next couple of days.

And what if there are? What will happen re. the market?

jog on
duc