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Sunday, January 15, 2017

NDD weekly indicators


New Deal Demoncrat - weekly indicators all look great. I'll take issue with this:

Over the last several weeks the "Trump election effect" in interest rates and the US$ have abated, apparently because traders are beginning to doubt that a significant stimulus will actually be enacted.

No, that's not how it works.

Rather, the "Trump effect" was an overlay of new volume that all sent markets in one direction. Once that new volume is worked through, markets will go back to trending toward the equilibrium.

Doubt over policy may figure in, but more along the lines of "I doubt that the outlook for X has changed so much just because there's a different guy in the White House than we had 2 months ago."


New Deal Demoncrat puts the boots to Obama


One reason I haven't been posting my regular economic data newsbits is that it seems my RSS reader has broken down. I might reinstall it later today.

Meanwhile, here's NDD putting the boots to Obama:


New Deal Demoncrat - Barack Obama, a noble failure. Ouch! Here's just one sample, but it sums up everything:

Great presidents do not see their signature legislation repealed within 30 days of their departure from office.






Thursday, January 12, 2017

Hey, whatever happened to Brexit?



der Spargel - hey, whatever happened to Brexit?

Answer: nothing.

Longer answer: none of them have any clue what to do, and as a matter of fact they haven't even moved to hire the entirely new civil service that they'll need to negotiate the exit, so it's all a huge clusterfuck.


Here's how you trade the GDX: an example


Step 1: a technical analyst (who really does know what he's doing when it comes to TA, so it's not like I'm knocking him) identifies a strong resistance region for GDX which he thinks it could turn back down from.

Step 2: but you realize that markets have been overskewed since the election. Whatever happened in November (or even October, as I noted) has to be worked completely out of the market before it can move for a real reason.

Step 3: you also realize that whatever Jojo says is the technical picture for gold, there's thousands of other market participants out there who've also studied TA and are thinking the same thing. His thesis is therefore big enough to make a market. Thus it's big enough for you to make money by taking the other side, if it turns out wrong.

Step 4: you notice $USD and USTs were grossly overbought and should turn around soon, and you know some people trade gold based on $USD and USTs.

Step 5: you also know that gold getting back to $1200 changes its sentiment environment completely, because it might mean people start thinking that the higher low has been printed.

Step 6: so you don't be a pussy, you wait to see if that resistance region holds, and you wait to see if $USD and USTs break down. Cos that means the boat is tipping back.

Step 7: then it happens, the TAs who lightened up on gold and GDX have their "oh shit it's still going up" moment, people short cos of $USD and UST strength have their "oh shit" moment too, people who see a higher low go "oh shit" and buy in, and then you start making money.

That's what I'm trying to do with a gold miners ETF (HGU) right now.

If GDX breaks thru $23.30 things get fun.

more Trump jokes


Aide: They've uncovered your darkest secret

Trump: Not the corpse orgy!

Aide: No, the golden showe... wait, the corpse what?

Trump: Nothing



Monday, January 9, 2017

China news, and so on


Nice to see Sinocism has gotten back to work.


Bloomberg - China planning a relaxed approach to growth. Read this, just in case you've listened too much to the MSM idiots like Ray Dalio and Jeff Gundlach blathering their fucking nonsense about Chinese leadership being dumber than them. Because Chinese leadership are not dumber than some cunt with a hedge fund. But at least it gives me a reason to start a "China Doom 2017?" tag to go with my China Doom 2012-2016 inclusive tags. I'm sure we'll be hearing a lot more about the coming China doom from these clowns soon.


Globe & Mail - those Chinese "ghost towns"? Yeah, about that.... They're not ghost towns anymore. They're full of people. China, you see, was smart enough to build ahead of growth, probably because they didn't want their cities to be ringed by tin-roof slums the way every other developing country's cities are ringed by tin-roof slums. And they were smart enough to build all this capital before the demand was there.


FT Alphaville - the great rotation. Mostly bullshit theory from a paid nobody, except for this:
$1.5 trillion inflows to bond funds in past 10 years vs $0 to equity funds
It's not that they're wrong, it's just that it means equities are overvalued and there's too much savings in the world relative to investment.

Jojo identifies resistance levels for GDX


I'm a bit disappointed, because he should analyze GDX in context of selling and buying volume, yet he didn't. I think the absence of volume at the December low, and the strong buying volume of the past week, tell a slightly different story than what he's reading, especially in the context of year-end tax-loss selling.

I also think the October breakdown was the Trump selloff - some funds who were paying for superior election prediction analysis (i.e. the stuff with a much higher price tag than what a CNN poll costs) realized well ahead of time that Trump was going to win the battleground states, so they sold off before the election even happened.

And we know the election also created a huge skew across market sectors that still needs to be worked off. Frankly I don't see how a retest of even the December low can happen this year.

Nevertheless, Jojo does TA well, and whether or not the above market analysis means anything, still the fact remains that the market trades at least partially on TA. So here's his warning, and it's worth considering:

Daily Gold - gold stocks leading but approaching resistance levels.


Sunday, January 8, 2017

Some nobody on gold's $15 billion unwind


Some Barron's blog or something - gold's $15B unwind.

I would agree that everything's moved too fast too far, and just because a bunch of hedgies spent the last 9 weeks taking new positions doesn't mean they can stay at those prices.

RBC is quoted in the article as saying this:

“The post-Trump-win unwind of gold has continued but appears to be shallowing out as indicated by gold-backed ETPs [exchange-traded products]. As prices have stabilized, the bleed of gold exchange-traded products (ETPs) has shallowed as well. In fact, while total ETP holdings fell by 228 tons since election day, 97% of that fall occurred in the first 45 days, with the rest occurring over the two weeks since. The fall was not simply a price story, as underlying and price driven flows contributed almost equally to the decrease. Overall, this represents more than a $15 billion drawdown in gold-backed ETP AUM – a pretty staggering number for a commodity which had rallied for much of the year.

So make of that what you will.

Let's piss off ISIS, what's the worst they can do?


British humour:



Some news



Bespoke - jobless claims back down near cycle lows. Thanks Obama!

Calculated Risk - record year for US light vehicle sales. Thanks Obama!

Bonddad - on Obamacare and Republitard ignorance. Thanks Obama!