Tuesday, September 16, 2014
Myles Udland lays on the sarcasm:
BI - hey, remember when rare earths were supposed to be the can't-lose investment of the decade?
Do you know anyone who was tooting the rare earths horn a few years ago? You might want to remind them about how much their idea sucked:
Here's 4 risk-on charts to ponder as risk-on rallies:
HYG is printing a bullish multi-outside candle today, after having spent several days at -2SD and RSI dropping to 30.
So you'd think at the very least it's gotta be good for a few-day bounce to the short EMA or the Bollinger mean.
$VIX is printing an outside day after having gone +3SD - with the previously-noted period-dependency caveat, of course.
It is still in its upward trend, don't forget that! I guess you should really wait til it breaks below its short EMA before you bring out the beer.
Nevertheless, the bigger the red candle, the more I suspect the $VIX rise is done.
I guess we'll get to see tomorrow how much of the downside protection buying of the past month was just being done in anticipation of this week's Fed meeting. Cos damn, $VIX sure has been trending upward for a month now and frankly that just looks silly.
Well, silver's chart is still frickin' atrocious. Today's pop doesn't change the downtrend at all. Though maybe, with silver having trended down for 2 straight months already, "down" might have become far too much of a sure thing and it might be about time for Mistress Market to discipline the shorts with some vigourous anal lovemaking.
I dunno, it might still take a couple days before we really know what's going on with silver.
But if we don't know what's going on with silver, why should GDXJ be looking positive?
I like this chart. There's been a massive blob of selling all through September: look at the selling volume in that chart. Far too much volume. Looks funny.
What did all that selling accomplish, price-wise?
I guess it's still adviseable to sit and wait for GDXJ to crawl back above the EMA, and silver to end its downtrend. After all, the trade that you should want to make is a multi-month 30% advance in your favourite junior miner. You should not want to make a 3% stupid daytrade. But the multi-month 30% advance will give you a few days' warning, so there should be no rush, no?
Everything went risk-on at 11:30 today, and as far as I can tell it's a kneejerk to the announcement of extra liquidity from the Bank of China. Though some people are attributing it to commentary from Hilsenrath, as if that could really affect FXI and SLV.
Even still, just in case we still care about precious metals, let's check up on that monsoon:
Economic Times - monsoon withdrawal delayed. Seems there's going to be a late harvest. Quote:
"We expect arrivals to begin at the earliest with the crop looking to be good," said HS Rosha of rice trading company Sohan Singh Rosha & Sons at Punjab's Khanna mandi.
Last year, the monsoon started withdrawing from Rajasthan on September 9 and from Himachal Pradesh, Punjab, Haryana and Gujarat on September 19. Over the past several years, the monsoon has lingered on in northern India until the last week of September.
Heavy showers over the past few weeks have eased concerns over a drought this year as the rain deficit has now narrowed closer to the 10% considered by meteorologists to declare drought. This season's rainfall was 11% less than the 50-year average considered as normal at the end of last week, but much better compared with the 21% shortfall at the end of July.
Meanwhile, private weather forecaster Skymet Weather Services said it expects monsoon's withdrawal to commence by the weekend.
Heh heh heh. I love writing Business Insider style headlines.
Anyway, I was over at Zerohedge reading the headlines. I like doing this when the US market goes risk-off, just to remind myself what stupid things American investors will be blaming the flows on.
Zerohedge noted that Chinese equities have been getting killed the past few days.
So hey, let's look at some charts!
Yup, the China 25 ETF, which owns a bunch of state-owned industries and which American hedge funds buy because it's the only one with liquidity, has dropped hard this past week.
And yup, YAO, the China All-Cap ETF that nobody buys, has dropped in tandem.
My gawd, China is really getting hamm oh wait
Um, why is the Shanghai exchange still moving up? There's no failed breakout after all.
In fact, FXI as of close yesterday was trading at a slight (<-1%) discount to NAVPS.
So basically, Americans are the ones who are selling China.
Monday, September 15, 2014
News.com.au - Venezuela suffering chronic shortage of breast implants. That's what happens when you drive out the junior miners, guys!
Just a couple weeks ago you were crowing about that exciting breakout in the emerging markets.
How's that working out for you? Is it still a breakout?
It looks rather more like a rush for the exits to me. A failed breakout, with strong selling volume, a horizontal SMA about to be crossed to the downside by a descending short EMA, price running away from the SMA and -3SD below the mean, an imminent lower low in the daily candles....
But what do I know, eh?
Here's some stuff and junk to read and stuff:
Calculated Risk - Fed preview. Yup, it's Fed week, so we can expect markets to not do anything until the Fed speaks whereupon there'll me a knee-jerk move in some direction or other that'll temporarily swamp out the slower-frequency flows, after which things will go back to normal. God this is annoying.
New Deal Demoncrat - weekly indicators. Everything's fine.
Reformed Borker (Bork Bork Bork!) - My investment thesis for the remainder of 2014 involves hiding in a closet clutching my teddy bear and piddling my little pink frilly panties. For as long as chickenshits like Josh continue to advocate jumping in and out of the market because reasons, the market will continue to provide profitable opportunities for people who aren't panty-piddling little girly-boys.
FT beyond brics - India shouldn't expect $100b in investment from China. Hey, don't be so skeptical! For $100b, China could simply supply and install 200 million portable toilets. That would go a long way to dragging India out of the bloody stone age.
Forbes - Bitcoin will probably drop to $10 in 2014. A good article examining how the thin market in buttcoins has affected its price volatility and distorted the process of price discovery. Not that libertopians actually care about price discovery, right? Because buttcoins are real money! Ron Paul says so!
Jerusalem Post - Egyptian "academic" demands Jews give back the gold they stole. Um, the gold they stole in the Exodus. Yes, the Moses one. With, um, interest. No really, with interest. Which is hilarious on so many levels:
1. Fixated on ancient history much, guys?
2. Ooh wow, an Arab who hates the Jews. How edgy, how original. I really can't remember the last time I heard of an Arab who hates all Jewry.
3. Can the Jews in return ask to be compensated for their decades of slavery in Egypt too?
4. I thought demanding interest was haram? You sure you're a muslim, dude?
5. The people in Egypt right now are not the descendants of the Pharaonic subjects anyway: they're Arabs.
6. What's next? Should Egypt bring a case before the international court of human rights, seeking damages for the plagues sent by the evil Jew-god?
Sunday, September 14, 2014
This doesn't even require explanation. Or if it does I can't be arsed.
OK, this one is funny. A 60s girl-group version of Ellie Goulding's "Burn". They even have a bass sax that shoots fire.
And no, the smoke alarm never goes off.
Saturday, September 13, 2014
Friday, September 12, 2014
Vix is >+2SD, which is a good time to not be in the market:
Except it's not >+2SD:
It's only >2 standard deviations above norm if you use a period of 20. That's because of that little $VIX spike we had more than 20 days ago: if you select a period of 20, it falls out of the equation, and thus the Bollinger bands for a 20 period tightened a few days ago.
The Bollingers for a 30 day period (second chart) are still big because the spike hasn't fallen out of the dataset yet.
Thus today's $VIX is only a statistical outlier if you cherry-pick your statistical set to make it so.
That's an important thing to remember about all statistical TA indicators: they depend on the dataset. If your local TA doesn't quality-check the dataset for sources of error, then he's an idiot and you should ignore him from now on.
So, because the Bollinger function is telling me two different things depending on the dataset, I'm going to ignore the Bollinger indications for this present situation, and concentrate on $VIX's relation to the short-term EMA (which shows it still in an uptrend) and also keep an eye on the VIX futures curve (not remotely inverted yet at all, still boring) and HYG (which has been doing nothing for 2 days, but still has a chart that hints there might be a change taking hold in the character of the high-yield market's performance).
Some reading for you:
Bespoke - gasoline prices lowest since February. If this trend continues, just imagine what a boost it'll provide to consumer spending!
Ritholtz - buying stocks based on how other people feel. How sentiment is bullshit. I'd point out that retail has proven itself not to be the "dumb money": over the past 6 years, the dumb money has been the hedge funds.
FT beyond brics - China's problem is not property, but too few modern homes. Still lots of room for capital investment in China. And given they're a command economy, they can accelerate development instead of letting the drunken invisible hand do its job - the way it's done so well elsewhere in the world, where the poor still live in tin-roofed shacks.
FT beyond brics - EM companies face end to easy growth. That's a secular change, buddy.
Reuters - India's love affair with gold may be over. Wait a sec, is there an upcoming OpEx that I don't know about? Usually these stories are only paid for when there's an upcoming option expiry.
Mining.com - iron ore bears come out in force. I think the whole Jim Rogers "EM bear/commodity bear/DM bull" thesis has now gone mainstream. Is anyone of any consequence or intelligence still arguing against it? If not, why aren't you investing based on it?
WTF? Now even Slowdive have reformed?
WTF? They even played the Treffen Festival? WTF?!? In the Agra in front of 3000 goths?
WTF? They're even on tour?
And they're playing Toronto on October 28th?
I saw them with Catherine Wheel in Toronto, maybe around August or so 1993. Someone fell in love with me that night. So while I couldn't be arsed to go to a MBV reunion gig, I might just go to see Slowdive.