Trading the Trend

[qldfrog]

I will just add from memory that silver is used in solar panels for the connections to the silicon slices and so labelled as a green energy metal
So in short green economy stimulus in Europe means more panels means more silver and so silver price jumps
Gold is not a green metal..

 

[qldfrog]

I will just add from memory that silver is used in solar panels for the connections to the silicon slices and so labelled as a green energy metal
So in short green economy stimulus in Europe means more panels means more silver and so silver price jumps
Gold is not a green metal..

The above to explain silver price recent jump

 

[Chronos-Plutus]

I will just add from memory that silver is used in solar panels for the connections to the silicon slices and so labelled as a green energy metal
So in short green economy stimulus in Europe means more panels means more silver and so silver price jumps
Gold is not a green metal..

Well EVs will also impact silver demand according to this chart:

http://www.lbma.org.uk/assets/Alchemist/Alchemist_90/Alch90OConnell.pdf
Anyway; I will move my discussions to the silver thread.

 

[Chronos-Plutus]

The above to explain silver price recent jump

I think people are starting to wake up to the fact that silver will be in massive demand for the green revolution.

 

[Chronos-Plutus]

Yeah I was going to ask why I'd seen gold connectors for stuff and not silver. Corrosion. Makes sense.

So technically the tarnishing is a form of corrosion, however the underlying metal isn't compromised and doesn't corrode. Copper, in my limited chemical engineering knowledge, has a much more aggressive form of surface corrosion, and copper will corrode when placed next to noble and precious class of metals.

Silver is considered a noble and precious metal. To see why; this galvanic chart is a great visual for you:

Anyway; this is derailing Duc's thread; so we have moved the silver discussion to the silver thread.

 

[ducati916]

I'm lost. What are duc and C-P arguing about?

gg

I suspect a sarcastic question, however, the question is actually relevant.

The argument is about whether there is currently or more importantly, inflation coming. The reason that it is important is that inflation past a certain point, will be (very) bad for the stock market. Essentially it will end the trend. It will create a Bear market that could look something like the 1970s market.

So I wasted 30 mins of my life listening to that interview.

Summary:

(a) The current situation COVID, is an income shock;
(b) COVID caused forced selling in the markets;
(c) QE causes markets to diverge from real economy;
(d) Fiscal deficits aid real economy more than does QE;
(e) How long can fiscal expansion/QE continue for? Until inflationary pressures force cessation;
(f) The trade off occurs between inflation and unemployment;
(g) Globalisation (forces) are contracting, therefore increasing inflationary pressures;
(h) Election could have important ramifications;
(i) GFC was a deleveraging crisis;
(j) What do you do to protect yourself? Diversification. Gold was mentioned, positive nominal Bonds, Commodities, global financial assets.

You can read that in 30 seconds and save 29mins+ of your life.

Considering that it was from Bridgewater, very disappointing. A number of inaccuracies, some very superficial analysis and either they have no idea, or are not telling, solutions to the issues.

Read the Charles Napier link. Far superior.

jog on
duc

 

[Chronos-Plutus]

I suspect a sarcastic question, however, the question is actually relevant.

The argument is about whether there is currently or more importantly, inflation coming. The reason that it is important is that inflation past a certain point, will be (very) bad for the stock market. Essentially it will end the trend. It will create a Bear market that could look something like the 1970s market.

So I wasted 30 mins of my life listening to that interview.

Summary:

(a) The current situation COVID, is an income shock;
(b) COVID caused forced selling in the markets;
(c) QE causes markets to diverge from real economy;
(d) Fiscal deficits aid real economy more than does QE;
(e) How long can fiscal expansion/QE continue for? Until inflationary pressures force cessation;
(f) The trade off occurs between inflation and unemployment;
(g) Globalisation (forces) are contracting, therefore increasing inflationary pressures;
(h) Election could have important ramifications;
(i) GFC was a deleveraging crisis;
(j) What do you do to protect yourself? Diversification. Gold was mentioned, positive nominal Bonds, Commodities, global financial assets.

You can read that in 30 seconds and save 29mins+ of your life.

Considering that it was from Bridgewater, very disappointing. A number of inaccuracies, some very superficial analysis and either they have no idea, or are not telling, solutions to the issues.

Read the Charles Napier link. Far superior.

jog on
duc

Come on; it wasn't that bad.

The key points that I took away was that:

1. This virus crisis is clearly different from the last global financial crisis. Juxtaposition being that this crisis is an income shock whereas the last GFC was a credit shock. This crisis presents very real inflationary risks as income is being replaced with massive fiscal welfare which is inflationary from the aspect that demand is maintained while supply is disrupted, creating a cost-push inflation in a recession environment.

2. Over the last few decades we have had deflationary pressures due to globalisation and technology.

3. The Fed will not be able to just raise interest rates to address the cost-push inflation and monetary inflation debasement; because that would create a credit crisis leading to another GFC. The Fed knows that this inflation coming will not be from an overheated economy; as such, increasing rates would just cause more problems.

 

[ducati916]

So many of the issues have already been discussed on this thread already. But I'll go through the summary:

Starting with (a):

Was COVID simply an 'income' shock? This is incorrect. It was initially a credit shock, similar (just faster occurring) to the GFC. Simply look at the chart:

Markets recovered so quickly because the Fed. stepped in immediately, in a massive way, and prevented the effects from taking to deep a hold. There was at the time some $14T in BBB rated corporate debt (essentially junk) which is the top chart. Look at the spread blow-out. That is exactly what happened in 2008.

The second issue was the spike in unemployment, both in 2008 and due to COVID. Last time, there was no real fiscal policy aimed at the unemployed. This time is different, which probably accounts for the retail numbers.

QE as previously evidenced does not cause PPI inflation. Fiscal will not either, because it cannot. Both can cause CPI inflation and have done and will continue to do so. CPI inflation creates growth in nominal GDP. Growth in nominal GDP helps offset debt burdens (slow form of defaulting on debt).

Both interviewer and interviewee incorrectly differentiated between deflation and disinflation. More annoying than substantive, as they really had no idea anyway.

So in the above scenario, the Fed. prevented wholesale DEFLATION (credit destruction) which is what occurred in the 1930s and turned a financial credit panic into the Great Depression.

Disinflation v Inflation is the discussion that needed to occur, but didn't, which is why this was such a waste of time.

jog on
duc

 

[Garpal Gumnut]

@ducati916 and @Chronos-Plutus .

Duc and C-P. Thank you both.

Please carry on.

gg

 

[over9k]

Asian tech's done really well lately too. Might be nice to find an NYSE listed ETF that tracks it.

 

[ducati916]

How it looks for Monday:

$VIX is ambiguous, could move higher, could move lower.

%50 is also ambiguous. Could go either way.

%20 same as above.

TRIN, probably indicating greater weakness than strength on daily.

Same again on weekly.

So on a charting basis, very news dependent. Good news, and we'll likely move higher. Bad news and it will be lower. On occasion we do get these blah days where there is a technical no-mans land. Tomorrow is shaping up to one of them.

We also get those types of days when a rotation is underway. The leaders fall a little and the laggards gain a little. Overall the market doesn't do a great deal, but it does start to rebalance which is the trigger for the next leg higher. Both financials and RE have had positive fundamentals in the last couple of weeks. Tech has been a bit of a disappointment through earnings so far. Could change.

My expectation is for a bit of a choppy day where the indices don't do a great deal, but the various sectors continue their rebalancing.

I haven't included Gold/Silver as they are on a different analysis altogether.

jog on
duc

 

[qldfrog]

Asian tech's done really well lately too. Might be nice to find an NYSE listed ETF that tracks it.

If you followed that thread, you will find one answer Mr Le Duc gave .i let you do a bit of search before giving the code
I initially was invested but as you may aware US might ban some Chinese companies from US stock exchanges, which could have disastrous effects on these Chinese giants listing.
I played it safe and sold

 

[over9k]

All the indices futures are green but nasdaq futures overwhelmingly highest so looks like tech should have a good day.

 

[Chronos-Plutus]

 

[over9k]

Silver on a tear today. What's your favourite silver etf chronos? My gold is aaau.

 

[Chronos-Plutus]

Silver on a tear today. What's your favourite silver etf chronos? My gold is aaau.

I was just looking at VanEck GDXJ for junior gold miner ETF.

For physical gold ETF; PMGOLD is the best because the ETF is backed by the WA government and you can take delivery, if you wish, unless its changed.

For silver; I prefer actual physical purchase from Perth Mint over the ETFs. However I have been trading ETPMAG over the years and will buy more in the coming weeks.

 

[over9k]

I own a couple of gold miners here in aus - DEG & MGV. I'm pretty sure AAAU can be delivered too just FYI.

I'm just tempted to throw a few bucks at a silver etf & see if it skyrockets. Kind of like a penny stock of precious metal.

 

[Chronos-Plutus]

I own a couple of gold miners here in aus - DEG & MGV. I'm pretty sure AAAU can be delivered too just FYI.

I'm just tempted to throw a few bucks at a silver etf & see if it skyrockets. Kind of like a penny stock of precious metal.

But is AAAU backed by a sovereign/state government?

I was looking at a Helium stock today. I have to do a bit more research though.

 

[over9k]

Yeah WA gov.

 

[ducati916]

The earnings slate continues to ramp up next week with 712 total companies scheduled to report. In the table below, we show the largest stocks by market cap that are set to report quarterly results.

On Monday, there will be no company with a market cap above $100 billion reporting with the largest companies being Alexandria Real Estate (ARE) and multiple banks.

On Tuesday, payment processor Visa (V) will be out with earnings in addition to Pfizer (PFE), Amgen (AMGN), McDonald's (MCD), and Raytheon (RTX). Visa has historically averaged the strongest stock price reaction to earnings of these names but it has gapped down for six straight quarters.

That will be followed by another payment processor, Paypal (PYPL) on Wednesday. In addition to Paypal, Facebook (FB) is also scheduled to report that same day. While both stocks have averaged over 2% gains on earnings days historically, ServiceNow (NOW) has seen an even stronger performance with an average gain of 3.64%.

Another major earnings report that will be widely watched is Boeing (BA) to get a gauge on how demolished travel demand has affected the company.

On Thursday, three of the world's largest stocks will also be out with earnings: Apple (AAPL), Amazon (AMZN), and Alphabet (GOOG). Each one has averaged a 1%+ gain on earnings days. Apple (AAPL) has seen some of the strongest results in recent history with last quarter snapping a streak of four consecutive triple plays.

On Friday, two of the largest energy stocks, Chevron (CVX) and Exxon Mobil (XOM), will round out the week and July's earning calendar. Both stocks have historically averaged declines on earnings days.

jog on
duc