Friday, July 17, 2015

Some Friday news

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.

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.
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?

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. - 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.

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.
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.

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.

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