Saturday, July 18, 2015
Friday, July 17, 2015
That's one mighty pop!
Now, with Google being a $400B market cap company, I think it would have be a big percentage of the Nasdaq index, and so it (and NFLX, who also have popped) has driven the Nasdaq to a new high.
So here's some Friday news:
Calculated Risk - Fed's Beige Book says quit piddling your panties Whitey. Though it seems Whitey has quit piddling and is frantically buying his way back into the market, what with the QQQ now at alltime highs.
ETF Trends - it's getting pricey to bet against QQQ. Aw damn this is so sexy:
Bolstered by an ongoing biotechnology rally and surges by Amazon (AMZN) and Facebook (FB), the PowerShares QQQ (QQQ) , the Nasdaq-100 (NDQ) tracking ETF, is up more than 7% year-to-date and hit another all-time Thursday.Let that boat tip, then! Personally, I don't get how you could bet against a US tech & bio index, which is what QQQ essentially is, when the US is the one and only country in the world that can lead in tech and bio. Why the hell would you invest in Europe when there's a Nasdaq?
Even with those bullish data points in its favor, QQQ’s bearish options, or puts, are far pricier than bullish call options.
“Options protecting against a 10 percent decline in the tech ETF’s shares cost 9.8 points more than those betting on a similar climb, according to data compiled by Bloomberg. The relationship between the implied volatilities known as skew reached 10.4 on July 9, the highest since June 2012,” report Callie Bost and Annelise Alexander for Bloomberg.
Jared Bernstein - the Fed and African-American unemployment. BTW, we don't study racism and discrimination in first-year economics. Probably because economists don't bother modelling that sort of thing, but also because it shows how much of a lie basic economic theory is. It'll be an exciting day when someone decides to port critical sociology into economics.
Mining.com - gold falls to within sight of 5-year low. And this part is still tantalizing:
Last week large gold futures investors such as hedge funds slashed overall bullish positions by a whopping 64%. The week before speculators cut long positions by more than half.And that combined with USD-gold correlation of -0.95 means all we need to do is wait for the boat to finally tip over. You'd think, anyway.
Bets that prices will rise only amounted to just 7,574 lots or 757,400 ounces in the week to July 7 according to the Commodity Futures Trading Commission's weekly Commitment of Traders data.
The net long positioning is now the lowest since at least 2006 when gold was worth less than $600 an ounce.
Speculators' short positions – bets that gold could be bought cheaper in the future – jumped to more than 10.8 million ounces (306 tonnes).
That's a new record high for bearish bets placed on the New York gold futures market.
Bron Suchecki - you can't draw horizontal lines on a GLD chart. Because GLD's NAV in ounces goes down over time. Similarly, I'd add you can't draw horizontal lines on GDX because it's full of companies that dilute.
Because they didn't know how to make really fatal earworms til the 90s:
I mean sure, it's hooky and has a beat, but it doesn't really crawl right into your earhole and wrap itself around your brainstem the way that "Steal My Sunshine" does, for example.
Apparently the guitarist or the bassist was from the Soft Boys? Kimberley Rew? They were fun.
Thursday, July 16, 2015
My god, I just found an online derivative calculator.
Try it out if you're interested.
Online Derivative Calculator
I searched for it cos I was tired of spending literally hours finding fxx, fxy and fyy partial derivatives for one stupid homework question.
If stuff like this had existed in the 80s, I'd never have dropped out of science. Which is a good thing.
at 3:14 PM
Jojo - more downside potential in PM complex. Dayum, as of July 10th:
The HUI is in full blown breakdown mode and does not have strong support until the low 100s.
Ouch, eh? So, another 30% or so to drop.
Turning to Gold, it appears ripe for a breakdown below $1150/oz in the days ahead. If that comes to pass, then the focus should be on its next strong support around $1000/oz to $1040/oz.
I'll take the other side of that $1040 wager, Jojo.
Here's some gold chart perspective for you.
Wednesday, July 15, 2015
World Complex - something something gold, something something phase-space. Wherein we are presented with an update to a gold price phase-space squiggle:
Um... me neither. I think I used to understand this stuff once, but maybe I recently purged that section of memory to make space for fantasies about Naomi Watts.
But at least it gives me the opportunity to print an update of this chart:
Wherein we see that, despite the present wailing and gnashing of teeth, and despite the futures market being 90% short gold, it still hasn't broken down in Euros.
Krebs on Security - Adobe, MS, Oracle push critical security fixes. The mindboggling size of the worldwide patching project going on right now, just because one single suite of government-funded backdoors was publicly outed, might give you some idea of how many government-funded holes still exist in your OS and software.
Well, K-dog, this is what you get when you criticize people for being doctrinaire, ignorant, imperialistic and... well... typically German:
Krugginator - I get German hatemail. Quote:
Basically, the incoming missives take two forms:
1. Obscenities, in both English and German
2. Bitter accusations of persecution, along the lines of “As a Jew you should know the dangers of demonizing a people.” Because criticizing a nation’s economic ideology is just like declaring its people subhuman.
The latter is hilarious. German politicians, press, and apparently even the masses in general conversation have spent the past several years demonizing their Mediterranean fellow Eurozone nations for being corrupt, and lazy, and selfish, and untrustworthy.*
It's even more hilarious because in living memory the Germans were actually demons, who murdered 20 million people and left all of Europe a smoking ruin, and who got onboard the Euro project early as an attempt to petition to rejoin the human race.
Again, these are letter-writers, and hardly representative. But Germany’s sense of victimization does seem real, and is a big problem for its neighbors.
Yes, because the last time the Germans felt all victimized they murdered 20 million people and left all of Europe a smoking ruin.
* - But not in the German way of being corrupt (taking payoffs for arms deals, working with murderous third-world dictators, bailing out banks with taxpayer money), lazy (not lifting a fucking finger to help the poor), selfish (thinking the entire Eurozone is German property and not willing to share power with anyone but a French puppet state), or untrustworthy (being unable to be left in a position of power without fucking everything up).
Each of these is a universal human sin, but yet the Germans consider themselves so damn saintly. That's the essence of their national malignant narcissism.
Here's some stuff:
Bespoke - the never-ending range. The market could still go up 5-10% this year, don't worry.
Calculated Risk - California's budget surplus. Yet conservative libertarian small-government states like Kansas, Louisiana and Wisconsin, led by Presidential contenders, are all still flat broke. It's enough to make a neocon blow his top, if only the Republican echo chamber bothered to talk about facts instead of psychotic fantasies.
New Statesman - Yanis Varoufakis interview. One teaser:
HL: You’ve said creditors objected to you because “I try and talk economics in the Eurogroup, which nobody does.” What happened when you did?It'd be nice to say the whole facade collapses once people bring the idiocy to light, but Stiglitz's writings on the IMF proved that to be a false hope.
YV: It’s not that it didn’t go down well – it’s that there was point blank refusal to engage in economic arguments. Point blank. … You put forward an argument that you’ve really worked on – to make sure it’s logically coherent – and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply. And that’s startling, for somebody who’s used to academic debate. … The other side always engages. Well there was no engagement at all. It was not even annoyance, it was as if one had not spoken.
Econospeak - slush-fund Schauble. As noted, Germans are just as corrupt as everyone else in Europe: it's just that German corruption concentrates on selling weapons of mass destruction to murderous dictators.
FT Alphaville - China's decreasing margin debt. It's back down to where it was in April, yet the A-shares are about 10% lower than they were in April. That sounds like a positive for the market.
Mining.com - hedge funds slash bullish gold bets. Wow, it's like an over 90% short market. The bottom's gotta be close, no? Has anyone told these guys it's bad to be part of a 300 ton short position when total monthly physical gold demand is about the same number?
Mining.com - nine companies Brent Cook likes. Too bad Pilot Gold is choking right now.
Tuesday, July 14, 2015
If all it takes is 30 seconds of googling and a two-year-old Wiesenthal article to prove you clueless, then you're really a fucking idiot.
BI - America is not drowning in debt. Here's the one chart that proves the debt-freaks are morons:
But if a guy is crowing on about US household debt and how it's horrible, while simultaneously crying about low interest rates, then he's already demonstrated that he has no clue about how a lack of household debt would drive interest rates even lower in the market for loanable funds, in which case I wouldn't expect him to understand anything about comparing assets and liabilities either.
Now if you'll excuse me I'm going to go to school to learn more economics.
Here's a lesson in
BI - retail sales flop. Quote:
It was a big miss for retail sales in June.OMG we all gonna die! Iz horbl!
Retail sales fell 0.3%, and excluding autos, sales fell 0.1%, according to the Census Bureau's advance estimate.
Calculated Risk - retail sales decline 0.3% in June. Quote:
Retail and Food service sales ex-gasoline increased by 3.5% on a YoY basis (1.4% for all retail sales).Wait... up 3.5% yoy? That's... um... not so bad, is it?
Monday, July 13, 2015
I've spent enough time following 1990s tech charts to know that tech stocks don't obey TA. But even still, if you ignore the ticker and concentrate on the squiggles, this isn't half bad:
On the daily chart, BBRY is bouncing back from a sub-20 RSI(14). MACD might just cross over positive.
All that crap really only means momentum might change soon. And simply a breakout in the QQQ might drag this along with it.
And here's the weekly:
Ignore the ticker and look at the price near Spring 2014 support. Then look at weekly RSI(14) bouncing back from the low 30s.
Usually these low RSIs indicate a stellar buy point. We'll see what happens in
Here's Sam Ro, putting that journalism diploma to good work:
BI - OMG corporations have to roll over $5.8 trillion in debt!
In case this becomes the next big boogeyman making stupid Americans run away from the market leaving a trail of girl-piddle behind them, here's some facts:
(1) Interest rates won't rise until worldwide saving decreases or new borrowing explodes. Sorry, but the market for loanable funds works that way.
(2) He hides in a link a chart that points out that US corporate debt-to-equity has dropped to a level last seen in 1988:
(3) Which is actually bad, because corporations are supposed to borrow in order to fund capital expansion that grows earnings and productivity. That's how capitalism works. The big spike upward that you see in the above chart in 1989? That fueled the 1990s boom.
(4) But that doesn't matter anyway because debt servicing in relation to book equity is a hell of a lot healthier than this chart shows, since rates are so low.
(5) Oh but wait, interest rates are going to go up? No they're not, see (1) above.
10:15 AM market comment for you. Let's see how this works out today, eh?
So $VIX has dropped, but only back to 14.50 so far:
So the question is, given $VIX is just an intraday measure of demand for downside protection, are traders done buying their downside protection? Were they buying it to protect from Greece or China, or because they're just scared of poor earnings reports caving the US market?
And the problem is, $VIX has only dropped to the daily short EMA and Bollinger, and the weekly SMA(50):
Which makes me fear that this might be all the $VIX pullback we see, and that a bounce back up could be in the cards. Y'know, like when Americans realize the Greeks have to actually vote on this German "bailout" plan. I'll feel better if $VIX breaks through all those squiggly lines.
Meanwhile, despite FXI doing fine today, ASHR is continuing a selloff, which suggests Americans are using this weekend's bounce to sell and GTFO.
I'd assume American capital is just one tiny part of the Shanghai market. But maybe Whitey decides to buy downside anyway, as he sees ASHR's NAV go negative again.
I have a feeling it'll be a few weeks before Americans realize that they have their own stock market, whose value is completely independent of China. In the meantime, expect panty-piddling.
So anyway, seeing some big wins that I wanted to protect, I dumped 1/3 of my HVI.to this morning for a quick $900 book. Which would have felt better if I'd hadn't booked a $1600 loss last week getting the fuck out of MUX before it goes to $0.
No need to sell all my $VIX short: HVI.to and XIV seem to make their real money by shorting the time premium in the front month $VIX futures, which is usually a slam-dunk win, so there's still a lot of money to be made long-term. But it's nice to take a profit, and holding a sizeable chunk of one's portfolio in a $VIX short seems a little bit insane, as in rabid, as in seriously you should be institutionalized.
So let's see if $VIX continues to drop today, and if the QQQ continues to recover. In any case, I felt very happy this weekend with most of my money in HVI.to and HQU.to.
Yeah apparently there's a debt deal re Greece as of this morning. Or at least we all will think there is til it gets voted down by the Greek parliament, because no European drama ever bloody ends.
Thank god it's earnings season again: maybe the Americans will start paying attention to the economy and quit trading based on Europe being as must a disaster as it always was.
Anyway, here's some more of the weekend's reading for you:
New Deal Demoncrat - weekly indicators for July 6-10. Still nothing to worry about really.
John Quiggin - balancing the books. Forgotten by most debt-scolds is that governments also have assets:
Curtis Pitt’s big announcement was a rearrangement of debt and equity in Government Owned Corporations, increasing their borrowing and transferring the resulting equity to the general government balance sheet. The result is a $4 billion reduction in general government debt, part of a program to bring the debt/revenue ratio down to around 70 per cent.But you try splainin' that to your average neocon university economics professor and they'll look at you like you have an alien busrting out of your chest. And that's because many profs tend to be a little dumb and susceptible to kleptocrat propaganda.
A transfer like this doesn’t make any difference to the state’s net financial position. Bu it makes the point that publicly owned assets are assets, not liabilities, and the fact that we own them makes the state’s position stronger.
Simon Wren-Lewis - the non-independent ECB. Oh boy! A thought experiment!:
Imagine that the Scottish National Party (SNP) had won the independence referendum. The SNP starts negotiating with the remaining UK (rUK) government over issues like how to split up national debt. On some issue the negotiations get bogged down. Rumours start circulating that this might mean that rUK will not form a monetary union with Scotland, and that Scotland might have to create its own currency. People in Scotland start withdrawing money from Scottish banks.Which we already knew, but it's not really about government finance or monetary-union economics: it's all about power and control.
Now it is almost the definition of a private bank that if everyone who has an account at the bank wants to withdraw their money, the bank will run out of cash and go bust. That is why bank runs are so dangerous. It is also why one of the key roles of a central bank is to supply an otherwise solvent private bank with all the cash they need, so they will never deny depositors their money. (To be a lender of last resort.) If they did not do this, anyone could start a rumour that a bank was insolvent, and as people withdrew their cash just in case the rumour was true, the bank would run out of money and go bust anyway.
So in my hypothetical story, as people started withdrawing cash from Scottish banks, the Bank of England should supply these banks with all the cash they need. Except suppose it did not. Suppose it put a limit to the amount of cash it would supply. The Scottish banks would protest - you agreed we were solvent before independence, they would say, so why are you rationing our liquidity? The Bank of England replies that although they might have been solvent before independence, if there is no agreement solvency is less clear. The Bank of England says that the limit on cash will remain until the Scottish and rUK government come to an agreement.
This announcement of course leads everyone in Scotland to try and get their money out, and the Scottish Banks have to close. The Scottish economy begins to grind to a halt. The English media report that Scotland is running out of money because the Bank of England will not ‘lend’ any more to the Scottish banks. The Scottish government is forced to agree to the rUK’s terms. The English media say look what happens when you elect a radical government. In Scotland they call it blackmail. What would you call it?
If it sounds to you like the Bank of England is taking sides and putting impossible pressure on Scotland, then you will know what it feels like in Greece right now.
Mining.com - silver to hitch ride on solar growth. Yes, that's why it's collapsed down to $15. It's all because of high demand.
Sunday, July 12, 2015
Haven't even checked my RSS in 2 days. I have studying to do. This is just the stuff that I came across earlier this week:
New Deal Demoncrat - corporate profits as a long leading indicator. Why care, says the clownish TA blogger? This is why:
The relationship is straightforward: if corporate profits are a long leading indicator for the economy, and stock prices are a short leading indicator, then logically corporate profits should lead stock prices at least in terms of direction, if not necessarily in terms of volatility.And so how are corporate profits doing? This is how:
So quit piddling your frilly pink panties and buy the S&P 500.
Or if you'd rather chuck all of fundamental valuation theory and trade based on dice rolls like most TAs and bloggers, there's this:
BI - Tom Lee sees a buy signal that works 93% of the time. Quote:
"This past week, we saw several measures that point to extreme risk-aversion and hence, a reliable contrarian 'buy' signal is generated (with lows established either already or in the next few days). We do not expect any material damage to US fundamentals, and hence, see these contrarian signals as supporting our bullish call for a 2H rally."Blah blah etc etc. Or you could just say "in a secular bull market you win whenever you buy a 5% pullback that's accompanied by stupid insane fear, simply because in a secular bull market stocks go up". But I'm sure dice-rolling and chart-spewing can make you look just as clever.
After reviewing five measures of the market, he concluded there was a 93% probability of an S&P 500 rally, with gains of 9% by the end of the year.
We summarize the conditions that support his bullish view:
1. The implied volatility term structure has inverted
The VIX term structure just inverted again on Wednesday, which could be a good thing. Excluding recession years, Lee says, this inversion has happened 11 times since 2004 — and in seven of them, the sell-off ended within days. Three of the other inversions saw longer sell-offs during 2010-2011 because of the impeding threat of a US government shutdown.
According to Lee, returns after inversions are impressive, with markets rallying an average of 6% (in three months) and 10% (in six months), with 100% and 90% win ratios, respectively.
2. US investors are so bearish, it's bullish
The American Association of Individual Investors' net percentage of bulls minus bears was at -12% on July 2, the second-lowest level since 2013 (the lowest being -13% on June 11). But, as Lee has pointed out before, extremes in this case usually mean the opposite: "Historically, the AAII survey is a contrarian indicator with a very good track record at the extremes," Lee wrote in a note last month. "For instance, since 1987, whenever the net bulls reading is this low, stocks have seen a subsequent six-month rally 100% of the time, with an average gain of 7%."
Yahoo Finacne - traders pump cash into leveraged A-shares ETFs. Just in case you thought ASHR isn't bad enough and you want to do the trading equivalent of having unprotected sex with radioactive chainsaw-wielding silverback gorillas in a shark tank.
Econospeak - Jens Weidmann on central banks not being lenders of last resort. This is why Europe will always fail:
I don’t think we should let this pass. Jens Weidmann, Germany’s representative on the governing council of the ECB and considered by most Germans (and their media) as a paragon of economic and financial wisdom, is quoted as saying, “Central banks, although they have the means, have no mandate, in my view, to safeguard the solvency of banks and governments.” Note that he refers to central banks in general and not only the ECB.Ha ha! See what he did there?
Frankly, I think Weidmann should sue the reporter who put these words into his mouth—obviously a crude attempt to make him sound like a yahoo who doesn’t know the first thing about his line of work.
Here's Cookie with some perspective on the last great gold mining bust:
Brent Cook - what was it like, dad? And just in case you think the tumbleweeds at Cambridge House conferences this year are indicative of a bottom:
I recall a Hard Assets Investment Conference held in some shabby hotel on the outskirts of Miami in 1999. The headline speaker was some nut job newsletter writer who had somehow gotten on NBC, ranting about the end of Western civilization the very microsecond the computer clocks clicked over to January 1, 2000. That, he claimed, was when all the gold and guns stored in your backyard bunkers would become valuable. The conference was absolutely devoid of investors. In desperation, the conference organizers bussed in a load of folks from some nearby old folks homes. They arrived with bags strapped to their walkers and proceeded to steal anything not tied down to a booth. I think that was the low point.So... um... it can get worse, dad?
Brent Cook - will mining ever come back, dad? He's just great at telling stories:
But boy, that 1950’s uranium boom was spectacular. Charlie Steen kicked it off when he found the Mi Vida mine near Moab, Utah in 1950. Your grandpa was out there roaming the desert with a case of beer, a box of dynamite, and a Geiger counter stuffed into the back of a Cadillac.And my grandpa was a bootlegger, not a geologist. It's just that driving a Cadillac around with a case of beer, a box of dynamite, and a Geiger counter was the fun thing to do back then.