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Friday, March 31, 2023

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TGI Fed – Help Us O-Ben One Bernanke – You’re Our Only Hope!

This is so exciting!

The Futures are up, Europe is up, the Dollar is down – despite the fact that the last Fed Statement, the last Fed Minutes and Bernanke's last speech all said, VERY CLEARLY, that there will NOT be any more QE UNLESS the economy worsens.  We just had the new Beige Book on Wednesday and, thankfully, the economy is not worsening.   Therefore – one may conclude – no easing today.  To do so would make the Fed seem capricious and inconsistent and erode their future ability to steer the markets with rhetoric.  

Of course, this doesn't matter to the robots who are jacking up the Futures after the foolish humans sold all day yesterday – and the day before, and the day before that, and the day before that.  But not last Friday – although last Thursday was terrible too and last Wednesday wasn't so good and last Tuesday was awful – so how about that rally?  

As you can see from our Big Chart, we're getting exactly the sell-off we've expected but, as I've pointed out to Members, things are much weaker than they seem as the Dollar, at 81.50, is down 2.5% from where our levels were drawn (83.50) and that means that each set of lines on the chart – including the 50 and 200 day moving averages, need to be moved up one notch and that means the Dow failed it's 200 dma yesterday (at an adjusted 13,100), the S&P dropped below it's must hold line (adj 1,400) and needs to break back over the 50 dma (adjusted to 1,414) in order to get back momentum.  

The Nasdaq is still above it's adjusted 50 dma at 3,037 but now need to get back over the adjusted Must Hold line at 3,075.  The NYSE has failed all of it's support and has to take back 8,000 for any rally to be taken seriously and, finally, the Russell is right on the adjusted 200 dma at 804 and failing to hold 800 would be a huge sell signal.  

For now (8 am), none of that is an issue as the Dollar has fallen another full percentage point (81.18) as the Euro climbs back to $1.26 because ECB Executive Board Member, Benoit Coeure said: "ECB bond purchases in the sovereign debt market must be subject to strict conditionality."  What?  What do you mean that doesn't sound bullish to you?  The man said BOND PURCHASES!  Don't you see?  It's a code – the code means the ECB is planning to buy bonds – if someone asks for them (which Merkel is actively discouraging) and if they meet "strict conditionality."  See – IT'S IN THE BAG!  

Fortunately, as we learned yesterday, reality is only what you say it is and Mitt did a much better job than his VP in wowing the crowd yesterday with his Reaganesque vision of America and I was particularly impressed by this documentary on his life:  

With all this love in the air and the great news out of Europe, we decided to go long on the Nasdaq Futures (/NQ) in early morning Member Chat to lock in yesterday's gains on our bearish positions.  Most likely, we'll be back on the short side before the market opens as we're still just a tad skeptical of all the rhetoric but nothing that happens at the open really matters until we get Bernanke's speech from Jackson Hole at 10am.  '

We have our long hedges that we discussed Tuesday, and the Tuesday before that and the Tuesday before that (in case you missed it), but our short-term $25,000 Portfolios are skewed 70% bearish and we added more downside protection to our Income Portfolio, in anticipation of some disappointment from Bernanke this morning.  

As I said earlier this morning to Members, I don't think they can get the Dollar below 81 and it's already (8:50) at 81.05 so we're going to be cashing out our Futures longs already and shorting the Dow (/YM) at 13,100 and the S&P at 1,410 as these are both lines that should be easy to bail out of if they break but this is simply stupid at this point – erasing all of yesterday's losses in the Futures based on an optimistic interpretation of a statement made by a guy we never heard of.  You can mess around with the Futures all day long but once you begin to try to push Forex past resistance – you'd better have something more substantial than an out-of-context statement by a minor official.  

Jens Weidmann is not a minor official – he is the President of the Bundesbank and he has threatened to resign if the above-mentioned bond-buying program is put into effect by the ECB.  Sounds like strong opposition to me…  In Berlin, a government spokesman said Chancellor Angela Merkel supports Weidmann but declined to comment on the report, which lays bare a deep rift within the ECB over the bond scheme that is increasingly being played out in public.

Stepping up the pressure to attach conditions to the plan, fellow German ECB policymaker Joerg Asmussen said late on Thursday the ECB should only buy sovereign bonds if the International Monetary Fund is involved in setting the economic reform programmes that should be demanded in return.  "Opposition from Weidmann and reservations from some other Council members will mean that ECB bond purchases would be highly conditional, be focused on the short end and would not aim to bring yields down quite as much as Italy and Spain might like to see," said Berenberg Bank economist Holger Schmieding. 

Ah well, enough talk – let's see what Uncle Ben has to say….

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Phil–next fed meeting on thurday, sep 13th? why the change to wed-thurs?

Vegas — What time do you plan to start the card game?  Looking at air fare…

Phil FOREX
Very sad situation if only central banks can do this.
IWM held 81.13 about an hour but trouble @81.30 /TF, RUT, and IWM aligned today very unusual.

My vision of the future:
 
I envision that one day the United States will sell individual states to corporations.  This way there will be full transparency unlike now where politicians are just puppets for them.  It might be nice though, like I used to live in North IBM, but moved to Apple because of 10% discount on products off your taxes.  Chick Fil A would definitely be a southern state.  They can probably get Mississippi or Arkansas pretty cheap.

 rustle:  I agree.  This whole "public sector" nonsense is way past it's due date.  Around 28% of the 2.27 Billion acres of land in the U.S. is owned by the Federal Government.  What's up with that?  This country is supposed to be about private enterprise, not some kind of Communist nanny state!  China would gladly trade their U.S. Treasuries for a few hundred million acres of prime farm or forest land, since it's tough to grow food for 1.5 Billion people in the Gobi Desert.  We could throw in the Hoover Dam and lease a Great Lake or two to Arab countries, they seem to have a water problem. Then China could slice it up formultinationals, and Wall Street would pick up massive syndication fees putting the deals together.  Capitalism can definitely solve the problems that capitalism creates!

GLD ūüôĀ this is just  sickening. fastest money I ever lost on one trade

Gandhjo – If it makes you feel better, I've got you beat, on multiple occasions.  Several of them on GLD, actually…
Phil – thoughts on when to take profit on the DIA todays?


 
You know I was being sarcastic and don't actually hope that happens, right?

Rustle:  Uh, was I too subtle?  

On GLD- I know it hurts but you have to put your stops in- the rules. Still might reverse for u. Good Luck

Wow, just picked up 175% on today's SPXW $1410s, half off, stop set, now up a mere 150% on the other half, jeez!


 
For a second, I got really scared.

GLD –  i rolled up to 161s. i'm net long goldish things so this is an ok hedge for me. tought to bet against gold though. i may never do GLL again for a hedge. that sucker just evaporates on me every time and even when gold goes down a bit, it only ever gives a nickel.

 Rustle: I used to put together syndications on Wall Street, so I got carried away with the realism, I should have used fake blood!

Zero
Great backup, hope we don't need it.

I wrote of Catalunya, the most prosperous region of Spain that has contributed fully 25% of central government revenues that Madrid collects from its 17 provinces.  A Spanish colonel was quoted as saying today that Catalunya would only become an independent nation "over his dead body."  This comes in response to a Catalan city announcing that it would declare itself to be "independent Catalan territory."  This is all about revenue sharing, in which Catalunya has had to subsidize poorer regions.  European "Federalism" is not going to be as easy as the financial press mignt suggest.  http://www.lavanguardia.com/politica/20120831/54344065618/coronel-ejercito-independencia-catalunya-cadaver.html

Phil, wanted to thank you for the heads up on the ES short this morning. Made a few shekels and after setting some aside for that Government guy- you know, the one who actually builds my business (funny how he is able to do that though since he never seems to be around when it's time to hit the bricks at 4:30 AM) – I will be making a contribution in your honor to the Romney campaign.
Mitt and I thank you.

gandhjo 
GLD well here again I did my own home work and did not play. Looks like the FAS play will work out better. Going to lose only 20$ on XLF

Forming a triangle thingy now….

BTW, did anyone else who watched the RNC think Clint Eastwood was going to shoot an empty chair Dirty Harry style?

Phil Paul
I am for him all the way, to bad the republicants said can't! A real chance to change to winner, only chance.

Phil / Vegas — No Nobu for me thanks.  No problem getting up on Monday since it's my timezone (modulo the wife keeping me out late Sunday). 

All
thanks for the posts on GLD. Actually it is my own fault – that I went trigger happy on that trade without using my brains. I have to always remind myself not to simply copy trades and go in without a plan  – need to put a note on my laptop. I used my brains on SPY puts trade and actually made some money – not enough to cover GLD loss but what the hell – I learned the lesson here.
gandhjo

Stjean
Not forming flag is up in the wind!

Rustle:  That "talk to the hand" thing was kinda scary.  You weren't sure if was acting or hallucinating.  And the crowd wasn't quite sure whether Obama was really sitting there and only Clint could see him.  

BOTS playing todays fib lines that line up with 20 day that line up very long list and rising up with the flag. this doesn't look like a winner but the point isn't here yet.

Trying to get gas (/rb ) over 3.00 for the long weekend

3 day weekend follows  through. Don't bet the farm on anything until you check IWM, up.1%.

And no one can say Obama doesn't have a sense of humor:  From FT: "Mr Obama’s campaign did not have a comment, but instead a spokesman directed Politico, the political website, to refer “all questions on this to Salvador Dali”."


 
I love Clint Eastwood movies, but he should really save that imagination for the movies.  If he wasn't an actor, he would've been committed last night.

gandhjo
Day trading is strictly for gamblers it is like going to the casino you put 20§ in your pocket and be prepared to lose it.
Invest your money in longer term plays given in the aproperate list Phil has set up for investing. I mainly set up CC plays with sometimes püts. Many on this board have there own style of trading but you have to work out for yourself if any of these plays are good for you.
Good luck role '# 1 do not lose money

"Home to Barcelona, the region has a per capita GDP similar to the U.K., but just the 4th largest in Spain."  I'm not sure what this means, but Catalunya has the largest GDP in Spain, not the 4th largest . http://en.wikipedia.org/wiki/List_of_Spanish_Autonomous_communities_and_Autonomous_cities_by_GDP

All this sturm and drang, and here we are with IWM exactly where it was Monday am at 10

Phil's "sell into intial excitement" rule certainly worked out today!

Krugman/Phil
 
I would disagree strongly with Krugman's 4th point.

I have held FB worth under 10 since before speculation, do the P?E math
http://finance.yahoo.com/blogs/daily-ticker/becoming-clear-no-one-actually-read-facebook-ipo-160120121.html

Yodi
thx for the advice – well said. I need to resist the urge to make a quick buck – no such thing unless one can make it work. I am learning that it is definitely not for me.

Another opinion on Australia potential problems:

http://www.macrobusiness.com.au/2012/08/australia-at-a-tipping-point/

 

What happened to Australia’s counter-cyclicality? What happened to Australia’s competitive advantage? Are Australia’s banks really worth that much when you can get a Credit Suisse and a Standard Chartered for the price of a CBA?  Are Australia’s houses good value when a shack in Byron costs more than a flat in Paris? Are Australian wages reasonable when a truckie in Kalgoorlie earns more than a team in Jo’burg? Is Australia’s dollar fairly priced when it buys you an ice-cream in Brisbane for a dinner in Singapore?

Some are seeing this sudden crescendo of negative overseas sentiment towards Australia as a crowded trade, but once the herd starts moving, those in the way better get out.

And just like that fabled moment in time, when the grounds of the Imperial Palace in Tokyo were worth more than the entire real estate market of California, we wonder if a tipping point has been reached.

Sad part of college now is that even the professors have no idea what they are talking about, not once does Professor James Hamilton, Economics Department at the University of California, San Diego, say oil is high because it's being manipulated by traders and just take all the facts that Phil lays out from time to time.
 
http://www.cnbc.com/id/48831784

ZeroXzero
Bored I checked NTE. What happened in 2003 to go way up and why did they loose most of that before the crash?

John Paulson must have a chubby right now!

Phil,
On the GLD put, are we going to DD today as per your earlier "waiting for .45 to average .65", or waiting to roll out to buy more time?

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