Friday, April 29, 2016
$VIX pops, SPY drops, and there's some sort of yellow metal making waves
I uninstalled Chrome in an attempt to reduce the bloatware and mothership chatter on my computer, so I'll be unable to post charts for you til I can find a new browser that works in Google's bullshit Blogger platform.
But if you go look up some charts, you'll see $VIX popped to 16.35 as of this post, and SPY is continuing last afternoon's bot-driven drop through its Bollinger mean. So I guess markets will go down for a while. It was all going to end anyway, as we got closer to the UK's guaranteed vote to leave the Eurozone.
Meanwhile, embarrassing Jeffy Currie at GS to no end, gold is breaking through $1280. Wut happen?
I guess people all of a sudden want to buy gold, eh?
The story is that the whole commodity pop is the result of new crackhead blood, as Chinese traders discover there's a thing called a commodity exchange. That's supposed to frighten you right there, because the Chinese are maniacal gamblers who flood into a market by the billions, blow out prices, then watch the whole thing fall apart leaving them broke.
Which is fine, except that also describes Wall Street Whitey, and frankly I think it's nice to see a billion new crackheads join the commodity futures world. That's futures demand, whatever else you call it. And I doubt it's psychologically possible for someone from China to go short gold. Frankly, this alone should scare the entire cracker world into going long gold.
I mean, hell! What if you decided to dump 50 tons notional into thin bids, only to get it all gobbled up in China, and that's the last you see of that price? I really don't think it's a good idea to short the Chinese. They have a radically different culture that's the product of 5000 years of very different history. They are not to be counted on to act like some wanker from NYC.
Besides, if we are approaching the second half of a secular DM bull market, commodities are supposed to inflate back up anyway. That's what they do, right?
Of course, that may not happen this time, since all the DM world leaders are pursuing aggressive deflationary policies. Maybe in the next few months they finally succeed in destroying world demand forever?
Of course all the skinflint German grannies will bitch about getting 0.01% interest on their savings accounts, but quite frankly, Hilda, nobody needs your fucking savings because your Nazi finmin has successfully destroyed all loan demand in Europe, you ugly bitch. Good luck loaning funds to Iran.
As for $SPX, I see no reason for it to crash down to 1900 again, except out of force of habit, at least til England votes to move its island 500 miles west and the rest of the EZ goes back to destroying Greece some more. And maybe Pooty-Poot can do something to kill the markets too - keep reading Zerohedge for clues as to who he's going to invade next. I'm sure the presidents of the Baltic countries are scanning that website every day making sure Pooty isn't saying anything about them.
Anyway, if the $SPX does look like it's going to tank, that should inspire the range traders to puke it even harder, because with no earnings growth and world aggregate demand down the shitter the only way you can make money is on the range trade. Shorting volatility with XIV could have made you 50% over the past 3 months, I'm sure people want another at-bat.
Which is another reason people will go long gold and long gold miners - because they're jealous at how much money's already been made since the bottom. Hell, I'm jealous. And that demand will be enough to turn the tide on gold.
Maybe I guess.