Comment by phil

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phil
February 15th, 2016 at 5:01 am

Good morning!  

What a day already.  The Nikkei is, officially, up 7% and /NKD hit 16,125 while I slept but back to 15,830 now, which is where I got out.  Not sure I want to rush back in below 16,000 but that should be a good bull line with tight stops below now.  15,500 would be a nice re-entry if we test it.  



Shanghai was stubbornly negative but actually was up all session after a poor open (making up for all the down action they missed last week and then shaking it off to hold our 2,700 line) and Hang Seng said fuggedaboutit and just went up 3.27%.  Europe is up 2.5-3% at the open as EVERYTHING IS AWESOME once again! 



News out of Asia is not particularly good (see above) with Japan's GDP down 1.4% and China's Jan exports down 6.6% from last year and imports were down 14.4% but that RAISES expectation that the BOJ and PBOC will stimulate again but, interestingly, the PBOC held the Yuan UP today, saying they did not see a need for more devaluation.  

With China, I'm not sure imports and exports are down at all but possibly these are just the real numbers now that they are cracking down on fake invoices, etc. It's the same premise I have with China's "slowdown" – it's not so much a slowdown as a (finally) realistic assessment of the actual Chinese economy without all the puffed up numbers but that's a GOOD thing because it means China's slowdown is a bookeeping entry and not a harbinger of a Global Recession that will affect other countries as much as thought.  

Don't Blame China For Market Insanity… Says China

Certainly other countries are confirming slowing trade with China but a lot of that is because they aren't playing inventory games internally (as much) and ordering things they don't need to boost consumption numbers.  Also, there's been no measurable spillover affect where trade between other Asian countries has slowed considerably – another indication that China's issues are somewhat contained (for now).  

The Dollar is back over 96, which is keeping Japan happy and knocking commodities back a bit but oil $29.24 is a victory after last week's scare and gold $1,211 is nothing to complain about!  





Gasoline is done screwing people for holiday driving so we're done too at $1.04.  



/NGK6 is the fresh horse ($2.074 with /NG at $1.934, so an 0.14 spread).  







Copper longs stopped out too but a great run on those! 



Oil Speculators Shrug Off Huge Stockpiles to Bet on Price Climb. Oil stockpiles at an 86-year high and warnings of a persistent glut weren’t enough to keep money managers from betting that prices are ready for a rebound. Speculators’ long positions in West Texas Intermediate crude climbed to the highest since June as oil sank toward a 12-year low, according to U.S. Commodity Futures Trading Commission data. Despite a 12 percent rally Friday, prices finished last week down 4.7 percent at $29.44 a barrel. Speculators’ long position in WTI rose by 1,152 contracts to 302,384 futures and options in the week ended Feb. 9, CFTC data show. Shorts, or bets that prices will decline, slipped 2.1 percent. Net-longs increased 5 percent to a three-month high.

Saudi Arabia might not be ready to fold just yet. "Possible ongoing talks on coordinated OPEC and non-OPEC crude oil production cuts are unlikely to be successful in the near-term, in our view," argued BAML's MENA economist, Jean-Michel Saliba, in a recent note to clients. "Saudi Arabia appears to be continuing in the meantime to position its energy and fiscal policies for a lower for longer oil price environment, if need be, as suggested by the possible flotation of Saudi Aramco or parts thereof."

Just a fraction of the world's oil supply isn't profitable at $35 a barrel

IEA: Don't buy oil

Iran to ship 4 mln barrels of crude to Europe in coming 24 hours

 

What Energy Bankers Are Really Saying: "We Are Looking To Save Ourselves Now"

Market turmoil causes sharp losses at US hedge funds. Some of the largest and well known US hedge funds have suffered further sharp losses from this year’s rout in equities and commodities, raising the prospect that investors pull more money from the industry. Popular bets in equities, currencies and commodities have backfired on a number of hedge funds this year, confounding some of the industry’s highest profile investors such as Bill Ackman’s Pershing Square, Glenview Capital run by Larry Robbins, while Carl Icahn has been hit hard by the slumping energy sector. ?

The 4 Key Themes From Q4 Conference Calls

Hillary Clinton: Obama on the Supreme Court would be a ‘great idea’