Trading the Trend

[ducati916]

Why would I want to buy the Banks? (Which I opened today via DPST).

Credit Spreads.

We had the same issues in 2008/09. Well if you look at the chart, the spreads blew out even more. As they came back into alignment, so the stockmarket started its inexorable rise.

The COVID crisis had not really impacted actual NPLs to progress to blow-ups on the scale that occurred in 2008. This is because the Fed. jumped in from Day 1.

One area or sector of the market where credit issues are extremely important are the Banks. Not so much the big chaps, they have always been recipients of bailouts, but the little chaps. No bull market will proceed without an intact and functioning financial system, which means the banking system.

Now banking is the most opaque set of financials you will ever have the misfortune to read through, if you bother reading the financials. Even then, 9/10 you still won't have the true picture. Trying to read your way through hundreds of banking financials is simply not possible for anyone other than an analyst working full time on nothing but the banking sector. Even then, hardly worth the effort as there are no superstars like TSLA in there. Banking is a low margin business.

As a group however, they can offer solid returns + dividends. If you have ever read 'One up on Wall St.' by Peter Lynch and his second book, you'll know he loved the banking sector. He bought them wholesale. So the ETF KRE holds:

Notice the tiny %. The largest is 4%+/-. Nothing in this is in a blowup going to hurt you. You get hurt if the whole sector blowsup. Now that the Fed. is backstopping them also, we know that that is not going to happen.

As stated, banks are not a TSLA. They are not going to excite you overmuch. So we have DPST. The x3 ETF of KRE. Now a second advantage of DPST is that we also have the inverse which is WDRW. Now, if we so choose, when we rebalance into a drawdown, we can choose to add some juice and go short.

So last week we ended with a plunge in the market. We had a few doom and gloomers make prognostications that COVID was back, blah, blah. The week opened and we moved higher and have had some red days, some wobbles and the market would seem to the casual observer to be uncertain. There is lots of news: AAPL closing (re-closing) stores, take your pick, there are negative news stories everywhere.

We had yesterday news around 'Witching day Options Expiry'. If you are looking for bad news to confirm your belief that the market is going to crash, you will find it. You can argue that what I post is also 'news': which of course it is. The test is: what news is noise, what news is signal for markets.

Looking at the internals:

The market is solid. There are some rotations. There are sectors that are red hot (Tech) and are just taking a breather and there are sectors that are lagging behind, but are now potentially ready to make a move in support of the overall market. This is not news. This is fact. Can it change? In a heartbeat. When it changes is when we bail out.

There are going to be a couple of technical hurdles: (a) the previous high and (b) the all time high (for SPY, the QQQ are already through just their new all time high). To break through is a function of all sectors contributing to the move. Most are ready to move. Energy is a notable exception, but they will likely join later in the year as the issues work themselves out.

jog on
duc

 

[qldfrog]

Just a note about equaling long term decline and share trading even investing:
In recent years American tobacco companies make a killing..pun intended...well above general index growths..yet not exactly a booming sector is it?
So we just need to be careful, if negative interest rates and yield search are so important, between a solid profit making industry or a Zoom like pie in the sky but increasing losses company.. not always that obvious a choice.
And then there is Tesla

 

[ducati916]

Just a note about equaling long term decline and share trading even investing:
In recent years American tobacco companies make a killing..pun intended...well above general index growths..yet not exactly a booming sector is it?
So we just need to be careful, if negative interest rates and yield search are so important, between a solid profit making industry or a Zoom like pie in the sky but increasing losses company.. not always that obvious a choice.
And then there is Tesla

Mr Frog,

An excellent point.

Negative nominal rates are an exit signal for Banks. Negative nominal rates kill the already thin margins.

jog on
duc

 

[ducati916]

Europe moving to shore up their banking system.

A total of 742 banks across the Old Continent borrowed €1.31 trillion ($1.46 trillion) from the European Central Bank at interest rates as low as minus 1%, the ECB announced yesterday. The debt sale marks the debut of the so-called dual-rate system, in which banks enjoy favorable borrowing costs compared to the administered overnight repo rate, currently set at minus 50 basis points.

Lenders eagerly availed themselves of the ECB’s generosity. Total loan size from the refinancing facility was more than double the prior high-water mark of €530 billion, set in March 2012 as the eurozone sovereign-debt crisis raged.

The banks will use those funds to repay maturing loans, as well as to increase their holdings of government debt. “Increased sovereign exposure by banks has typically been seen as a negative in recent years,” analysts at Jefferies wrote in a recent report. “However, the policy stance is shifting and with government debt levels set to rise, it may make sense for banks to channel excess liquidity in this direction.”

One thing is for sure: There will be plenty of new supply to soak up that extra cash. In its biannual financial stability review issued May 26, the ECB estimates that government borrowings across the eurozone will jump above 100% of GDP in 2020 from last year’s 86%, as budget deficits will average a projected 8% of GDP, with output declines ranging from 5% to 12%. At the same time, some European banks are heavily exposed to their own country’s fiscal fortunes, with Italian financial institutions holding some €425 billion in Italian debt, more than 10% of the outstanding total.

Then, too, E.U. member states face some imminent heavy lifting in terms of rolling over existing obligations, with more than 10% of total debt of France, Spain, Belgium, Finland and Portugal each coming due in the next year, while upwards of 15% of Italy’s borrowings will need to be refinanced by mid-2021.

If the current slump persists, the ECB warns, “overvalued asset prices, low bank profitability, high sovereign indebtedness and increased liquidity and credit risks in the non-bank sector . . . [risk creating] negative feedback loops arising from sovereign or bank rating downgrades.”

Good news for the banking sector generally and specifically for Europe.

jog on
duc

 

[ducati916]

So a bit of a weekly summary and a look ahead to next week:

The market did:

Commercials are still supportive of the market

Also Bonds

No inflation in sight. Deflation still the issue. Underlined further by Gold.

Given that we are in an election year, any relevance?

Unemployment numbers broken down:

What is their contribution to the economy and/or earnings of S&P 500 companies?

So the 'news' was essentially some good, some bad. So far, nothing material enough to derail the trend. Will stocks fluctuate? Of course. Are there any indications yet of a major reversal? No. Could it present in the future? Of course. Are we paying attention to try and catch it if/when it appears? Yes.

jog on
duc

 

[ducati916]

Now on the thread 'Economic Implications', I haven't seen an awful lot on what to buy as a consequence of COVID. Tech has outperformed and the usual names never really got that cheap and when they bounced, simply ran away. Now I am not really a tech chap so my vision is pretty limited in this space.

Ecommerce would seem (in America/Europe/China) to be a solid choice going forward:

For years, investors bid up tech stocks on the idea that digital transformation was inevitable. The Covid-19 crisis has proved them right. “We have seen two years’ worth of digital transformation in two months,” Microsoft CEO Satya Nadella recently told investors.

“I’ve been following tech for 41 years, and this is the second most expensive tech market I’ve ever seen”—second only to the internet bubble 20 years ago, says Fred Hickey, editor of the High Tech Strategist, a monthly newsletter. Hickey has long been skeptical of tech valuations, but this time the fundamentals are on his side. The Nasdaq Composite currently trades at 3.4 times forward sales, well above a 10-year average of 2.3, according to FactSet.

Ted Mortonson, technology strategist at Baird, the Milwaukee-based investment firm, says there are good reasons for elevated valuations. He says that we’re in “the most powerful integrated technology growth cycle since the late 1990s,” pointing to the acceleration of cloud computing, e-commerce, and telehealth, and the arrival of fifth-generation, or 5G, wireless and new chips. It all adds up to big growth potential at a time when there’s limited growth in other industries. Growth investors have bought tech stocks, he says, because they’ve had few other choices.

The following were identified as 'Cheap Tech':

Doesn't really appeal to me, basically because I don't want to buy 10 names and monitor them all and second, they are not (to me anyway) seemingly direct Ecommerce based stocks like AMZN, BABA, etc.

Here however is an interesting ETF.

Which holds:

Now most of those names are a complete mystery. They are located all over the world. So certainly diversified.

Unfortunately I missed this at the really opportune time, mostly because there are so many ETFs now that actually keeping track of them all is almost a job in itself.

Currently I am undecided whether just to buy and close my eyes (working out well for tech/a and TSLA) or wait for some sort of pullback.

This is clearly one one of those psychological issues that are being discussed on the 'Dump It' thread. The internal dialogue would go something like this:

If I buy it now, it will drop 50% because s*** like that always happens to me. If I don't buy it now, it won't pullback and it will run 300% and I'll have to pay or stay out.

Now I hate, HATE chasing stocks. I refused to chase AMZN, GOOG, and I liked those stocks at IPO because I use them all of the time. I never did buy them. Look where they are now.

So clearly that strategy failed. I need a strategy that will allow the purchase. Therefore if I buy today (Monday) I need to prepare for a pullback to whatever. On that pullback, I increase my position. I can average down with the best of them, red ink just doesn't bother me in the short term. I won't do it with individual stocks, because they may go down and never return. With an ETF that is still possible, but less likely. Therefore I can live with it (the risk).

The general thesis is (in case you missed it) that Ecommerce (post COVID, but not because of COVID) this space will grow worldwide, catching up the leaders (AMZN) in their own markets.

So I will add on Monday.

jog on
duc

 

[qldfrog]

Now on the thread 'Economic Implications', I haven't seen an awful lot on what to buy as a consequence of COVID. Tech has outperformed and the usual names never really got that cheap and when they bounced, simply ran away. Now I am not really a tech chap so my vision is pretty limited in this space.

Ecommerce would seem (in America/Europe/China) to be a solid choice going forward:

For years, investors bid up tech stocks on the idea that digital transformation was inevitable. The Covid-19 crisis has proved them right. “We have seen two years’ worth of digital transformation in two months,” Microsoft CEO Satya Nadella recently told investors.

“I’ve been following tech for 41 years, and this is the second most expensive tech market I’ve ever seen”—second only to the internet bubble 20 years ago, says Fred Hickey, editor of the High Tech Strategist, a monthly newsletter. Hickey has long been skeptical of tech valuations, but this time the fundamentals are on his side. The Nasdaq Composite currently trades at 3.4 times forward sales, well above a 10-year average of 2.3, according to FactSet.

Ted Mortonson, technology strategist at Baird, the Milwaukee-based investment firm, says there are good reasons for elevated valuations. He says that we’re in “the most powerful integrated technology growth cycle since the late 1990s,” pointing to the acceleration of cloud computing, e-commerce, and telehealth, and the arrival of fifth-generation, or 5G, wireless and new chips. It all adds up to big growth potential at a time when there’s limited growth in other industries. Growth investors have bought tech stocks, he says, because they’ve had few other choices.

The following were identified as 'Cheap Tech':

View attachment 105065

Doesn't really appeal to me, basically because I don't want to buy 10 names and monitor them all and second, they are not (to me anyway) seemingly direct Ecommerce based stocks like AMZN, BABA, etc.

Here however is an interesting ETF.

View attachment 105067

Which holds:

View attachment 105066

Now most of those names are a complete mystery. They are located all over the world. So certainly diversified.

Unfortunately I missed this at the really opportune time, mostly because there are so many ETFs now that actually keeping track of them all is almost a job in itself.

Currently I am undecided whether just to buy and close my eyes (working out well for tech/a and TSLA) or wait for some sort of pullback.

This is clearly one one of those psychological issues that are being discussed on the 'Dump It' thread. The internal dialogue would go something like this:

If I buy it now, it will drop 50% because s*** like that always happens to me. If I don't buy it now, it won't pullback and it will run 300% and I'll have to pay or stay out.

Now I hate, HATE chasing stocks. I refused to chase AMZN, GOOG, and I liked those stocks at IPO because I use them all of the time. I never did buy them. Look where they are now.

So clearly that strategy failed. I need a strategy that will allow the purchase. Therefore if I buy today (Monday) I need to prepare for a pullback to whatever. On that pullback, I increase my position. I can average down with the best of them, red ink just doesn't bother me in the short term. I won't do it with individual stocks, because they may go down and never return. With an ETF that is still possible, but less likely. Therefore I can live with it (the risk).

The general thesis is (in case you missed it) that Ecommerce (post COVID, but not because of COVID) this space will grow worldwide, catching up the leaders (AMZN) in their own markets.

So I will add on Monday.

jog on
duc

If this helps on EMQQ stocks, i recognised most of these from China.try to get a geographical breakdown but i suspect it is heavily China weighted..
Do not mean it is a good or bad thing, just many names i recognise from there but not common in the west...yet

 

[ducati916]

If this helps on EMQQ stocks, i recognised most of these from China.try to get a geographical breakdown but i suspect it is heavily China weighted..
Do not mean it is a good or bad thing, just many names i recognise from there but not common in the west...yet

I would tend to agree. The list:

Nasper: South Africa;
3690: Hong Kong;
PDD: China/India;
MELI: Argentina;
PRX: Netherlands;
035420: S. Korea;
JD: China/India;
SE: ?;
YNDX: Russia;
DHER: Germany.

The rest BABA, obviously China.

The thing with Ecommerce is that it transcends borders. You still get that globalisation meme which in the current environment (medically, politically) is absent/reducing. It is also (pretty clearly) a growth industry. You can argue that China will censor their markets etc. True. But the internal Chinese market is significant in any case. BABA already deals directly with AMZN and this will only continue to expand.

On this ETF, I'm willing to pay up. Of course I wish I had seen it at $25. Life.

jog on
duc

 

[ducati916]

So it trades in lockstep with the QQQ. Hardly a surprise.

jog on
duc

 

[ducati916]

This chap is obviously frustrated with the market. In the following post he raises all the reasons why he believes that this market is simply a castle in the sky. We have listed as reasons:

(a) Unemployment;
(b) Bankruptcies;
(c) Falling Fed. Balance Sheet;
(d) Daytraders;
(e) Extended rally;
(f) Credit markets moving from frozen to red hot.

None of these variables are new. They have been on the news desk for weeks. The market has already ignored them all.

I hate shorting. The risk-reward relationship is out of whack. It feels crappy. I lost a ton of money shorting the worst highfliers a little too early in late 1999. It’s just nuts to short this market that is even crazier than in late 1999. But Friday morning, I shared in a comment in our illustrious comment section that I’d just shorted the SPDR S&P 500 ETF (NYSEARCA:SPY). My time frame is several months.

I’m sharing this trade so that everyone gets to ridicule me and hail me as a moron and have fun at my expense in the comments for weeks and months every time the market goes up. And I do not recommend shorting this market; it’s nuts. But here’s why I did.

The stock market had just gone through what was termed the “greatest 50-day rally in history.” The S&P 500 index had skyrocketed 47% from the intraday low on March 23 (2,192) to the close on June 8 (3,232). It was a blistering phenomenal rally. Since June 8, the market has gotten off track but not by much. It’s still a phenomenal rally. And it came during the worst economy in my lifetime.

There are now 29.2 million people on state and federal unemployment insurance. There are many more who’ve lost their work who are either ineligible for unemployment insurance or whose state hasn’t processed the claim yet, and when they’re all added up, they amount to over 20% of the labor force. This is horrible.

But stocks just kept surging even as millions of people lost their jobs each week. The more gut-wrenching the unemployment-insurance data, the more stocks soared.


Then there is the desperate plight many companies find themselves in, and not just the airlines – Delta (NYSE:DAL) warned of a host of existential issues including that revenues collapsed by 90% in the second quarter – or cruise lines – Carnival (NYSE:CCL) just reported a revenue collapse of 85% in Q2, generating a $4.4 billion loss, and it is selling some of its ships to shed the expense of keeping them.

These companies are in sheer survival mode, and they’re raising enormous amounts of money by selling junk bonds and shares so that they have enough cash to burn to get through this crisis.

This crisis hit manufacturers whose plants were shut down. It hit retailers and sent a number of them into bankruptcy court. It crushed clinics and hospitals that specialize in elective procedures. It shut down dental offices. It sent two rental car companies into bankruptcy court – Hertz (NYSE:HTZ) and Advantage. It has wreaked untold havoc among hotels and restaurants, from large chains to small operations. And yet, stocks kept surging.

The situation has gotten so silly in the stock market that the shares of bankrupt Hertz – which will likely become worthless in the restructuring as creditors will end up getting the company – were skyrocketing from something like $0.40 a share on May 26 to $6.28 intraday on June 8, which may well go down in history as the craziest moment of the crazy rally.

There were stories of a new generation of stuck-at-home day-traders driving up the shares looking for their instant get-rich-quick scheme. And those that could get out at the top made a bundle (but HTZ closed at $1.73 Friday).

The smart folks at Hertz and their underwriters, Jefferies LLC, saw all these sitting ducks ripe for the taking, and they came up with a heroic plan to sell up to $1 billion in new shares into this crazy market, while informing investors that those new shares would likely become worthless in the bankruptcy proceedings.

The bankruptcy judge – likely shaking head in despair – approved it. As HTZ began plunging, the size of the offering was reduced to $500 million. This would have been like a donation to the company’s creditors, who now run the show.


Hertz would have likely been able to pull off this stunt in this crazy market, but then someone at the SEC woke up and asked some questions, which put the whole escapade on hold. But you can’t blame Hertz. They need money badly, and they’re just going where the easy money is.

Even during the crazy dotcom bubble in late 1999 and early 2000, the day-trader frenzy hadn’t reached these levels. But back in 1999, the economy was strong. Now this is the worst economy of my lifetime.

This kind of frenzy has been everywhere in recent weeks. They bid up nearly everything unless it filed for bankruptcy – and even then, they bid it up, as Hertz has shown. This would have been an inexplicable rally in normal times. But these are not normal times.

These are the times of record Federal Reserve money printing. Between March 11 and June 17, the Fed printed $2.8 trillion and threw them at the markets – frontloading the whole thing by printing $2.3 trillion in the first month.

And in this manner, the otherwise inexplicable frenzy became explicable: The Fed did it. And everyone was going along for the ride. Don’t fight the Fed. Spreading $2.3 trillion around in one month and $2.8 trillion in three months – in addition to whatever other central banks globally were spreading around – was an unprecedented event. And the fireworks probably surprised even the Fed.

Credit markets that had been freezing up for junk-rated companies suddenly turned red-hot, and speculators started chasing everything, including junk bonds sold by cruise lines and airlines though their revenues had plunged 80% or 90% and though they were burning cash at a stunning rate. The Fed’s newly created money went to work, driving up stock prices.

But over the past six weeks something new was developing: While the Fed was talking about all the asset purchase programs it would establish via its new alphabet-soup of SPVs, it actually curtailed the overall level of its purchases.

Then in the week ended June 10, the Fed’s total assets of $7.1 trillion increased by less than $4 billion. And in the week ended June 17, its total assets actually fell by $74 billion (you can read my analysis of the Fed’s balance sheet here). This chart of the week-over-week change in total assets shows how the Fed frontloaded its QE in March and April, and how it then systematically backed off:

And there is another big shift in how the Fed is now approaching the crisis. It’s shifting its lending and asset purchases away from propping up financial markets toward propping up consumption by states and businesses, and ultimately spending by workers/consumers via its municipal lending facility, its PPP loan facility, and its main-street lending facility. These funds are finally flowing into consumption and not asset prices.

So the superpower that created $2.8 trillion and threw it at this market, and that everyone was riding along with, has stopped propping up asset prices.

And now the market, immensely bloated and overweight after its greatest 50-day rally ever, has to stand on its own feet, during the worst economy in my lifetime, amid some of the worst corporate earnings approaching the light of the day, while over 30 million people lost their jobs. It’s a terrible gut-wrenching scenario all around.

And so I stuck my neck out, and I’m sharing this trade for your future entertainment when it goes awry, and you get to have fun at my expense and hail me as the obliterating moron that infamously shorted the greatest stock market rally of all times as it was floating weightlessly ever higher above the worst economic and corporate crisis imaginable.

Why, when the market has clearly ignored all of the above, does he think that a second collapse is imminent? This is an example of psychology gone awry. You hate the market. You are not going to buy it. Emotional. Irrational. But understandable. What is not understandable is that there is a material difference in refusing to be sucked into what you hate and shorting the market out of spite because you hate it. That is emotional trading of the 1'st order. There doesn't even seem to be an exit plan contemplated: in a couple of months is the plan. Possibly that works, but, not a great starting point if it doesn't. Last, this chap doesn't short very often. He doesn't like it. Shorting is very different to being long. It feels very different (never mind your losses are potentially uncapped). I doubt he'll last a couple of months if the trade doesn't go his way almost immediately.

We'll just have to wait and see how it works out.

jog on
duc

 

[frugal.rock]

G'day Duc,
Was wondering about this chart.

Can you, or someone else, please explain it to me in simpletons form?
It's all way out of my league.
If the dark blue is swaps USD with AUD, what's the big drop about on the last bar?
What relevance, if any, does this have for AU markets?
Not sure what the BOE represents either.
Cheers.

F.Rock
Edit, is BOE the Bank of England ?

 

[Chronos-Plutus]

So you missed the bottom. You missed the bounce. You are not happy. All is not lost. The 'small' banks have not really joined the main show. They will at some point. I'll be opening a position in the AM.

View attachment 105001

View attachment 105000

DPST is the x3 leverage of the small banking sector (KRE). It pays an 8% dividend (hence my interest in bank dividends) which may or may not be 'safe'.

View attachment 105003

The train has not left the station. Last whistle sounding.

jog on
duc

I appreciate your effort on the market analysis; however I am sitting this out. Not buying into this rally.

 

[ducati916]

G'day Duc,
Was wondering about this chart.

Can you, or someone else, please explain it to me in simpletons form?
It's all way out of my league.
If the dark blue is swaps USD with AUD, what's the big drop about on the last bar?
What relevance, if any, does this have for AU markets?
Not sure what the BOE represents either.
Cheers.

F.Rock
Edit, is BOE the Bank of England ?

1. A liquidity swap is a swap of US dollars for Aus$ or whatever. It is to provide liquidity in US dollars to that (Australia's CB) bank. Usually because there are US dollar denominated loans and payment is difficult impossible because of dollar shortage. This is what happened in 1997 with the Asian crisis: lack of US dollars but dollar denominated loans.

2. The drop simply means that US dollar swaps have reduced. The important question is why have they reduced? Off the top of my head I don't know why.

3. BOE = Bank of England located in Threadneedle St.

jog on
duc

 

[ducati916]

I appreciate your effort on the market analysis; however I am sitting this out. Not buying into this rally.

Which of course is totally rational if it does not gell with your trading style.

jog on
duc

 

[ducati916]

So we had the usual w/e dramas.

Futures reflected the news. Remember these chaps are largely retail and foreign traders.

Currently:

We've had a nice pullback from the lows. Nothing really suggestive that the market will not trade higher come Monday morning. I'll keep an eye on them through the day.

jog on
duc

 

[dyna]

Why would I want to buy the Banks? (Which I opened today via DPST).

Credit Spreads.

View attachment 105010

We had the same issues in 2008/09. Well if you look at the chart, the spreads blew out even more. As they came back into alignment, so the stockmarket started its inexorable rise.

The COVID crisis had not really impacted actual NPLs to progress to blow-ups on the scale that occurred in 2008. This is because the Fed. jumped in from Day 1.

One area or sector of the market where credit issues are extremely important are the Banks. Not so much the big chaps, they have always been recipients of bailouts, but the little chaps. No bull market will proceed without an intact and functioning financial system, which means the banking system.

Now banking is the most opaque set of financials you will ever have the misfortune to read through, if you bother reading the financials. Even then, 9/10 you still won't have the true picture. Trying to read your way through hundreds of banking financials is simply not possible for anyone other than an analyst working full time on nothing but the banking sector. Even then, hardly worth the effort as there are no superstars like TSLA in there. Banking is a low margin business.

As a group however, they can offer solid returns + dividends. If you have ever read 'One up on Wall St.' by Peter Lynch and his second book, you'll know he loved the banking sector. He bought them wholesale. So the ETF KRE holds:

View attachment 105012

Notice the tiny %. The largest is 4%+/-. Nothing in this is in a blowup going to hurt you. You get hurt if the whole sector blowsup. Now that the Fed. is backstopping them also, we know that that is not going to happen.

As stated, banks are not a TSLA. They are not going to excite you overmuch. So we have DPST. The x3 ETF of KRE. Now a second advantage of DPST is that we also have the inverse which is WDRW. Now, if we so choose, when we rebalance into a drawdown, we can choose to add some juice and go short.

So last week we ended with a plunge in the market. We had a few doom and gloomers make prognostications that COVID was back, blah, blah. The week opened and we moved higher and have had some red days, some wobbles and the market would seem to the casual observer to be uncertain. There is lots of news: AAPL closing (re-closing) stores, take your pick, there are negative news stories everywhere.

We had yesterday news around 'Witching day Options Expiry'. If you are looking for bad news to confirm your belief that the market is going to crash, you will find it. You can argue that what I post is also 'news': which of course it is. The test is: what news is noise, what news is signal for markets.

Looking at the internals:

View attachment 105011

The market is solid. There are some rotations. There are sectors that are red hot (Tech) and are just taking a breather and there are sectors that are lagging behind, but are now potentially ready to make a move in support of the overall market. This is not news. This is fact. Can it change? In a heartbeat. When it changes is when we bail out.

There are going to be a couple of technical hurdles: (a) the previous high and (b) the all time high (for SPY, the QQQ are already through just their new all time high). To break through is a function of all sectors contributing to the move. Most are ready to move. Energy is a notable exception, but they will likely join later in the year as the issues work themselves out.

jog on
duc

Bit off-topic,here.That Peter Lynch book was first sold in Oz,way back in the Bank Card era.He had a lot to say about the way banks ripped off their clients with credit cards and I remember thinking,well that'll never catch on here.We aussies are way too smart to fall for that bank rip-off.How time change.....

 

[ducati916]

Still moving higher.

Wall St. not watching what you think they might be watching:

jog on
duc

 

[over9k]

Huge jump in my stay-at-home positions today, and mortgage delinquencies just hit their highest level since 2011.

If anything's going to spook the fed into more QE, mortgage defaults would surely be it.

When do your models say we're going to see another bounce duc?

 

[over9k]

I ask because we haven't seen the bounce that you predicted today and we've seen a flat nasdaq and declining djia & sp500 for just over a fortnight now, exactly as I predicted:

I'm going to see if I can find some data tracking virus numbers to mortgage delinquencies. If I can't then I'll throw it together myself then post it in here.

 

[Chronos-Plutus]

I ask because we haven't seen the bounce that you predicted today and we've seen a flat nasdaq and declining djia & sp500 for just over a fortnight now, exactly as I predicted:

I'm going to see if I can find some data tracking virus numbers to mortgage delinquencies. If I can't then I'll throw it together myself then post it in here.

Bad home sale data just released from the USA:

Then we got heaps of data being released today from USA, UK and EU: