HMB
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Posts posted by HMB
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From BBG (link below): "But particularly in light of the rising resolve to fight inflation among central bankers, many sensed a change in the air after a year of virtually uninterrupted gains. "
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"As rough as it got, bargain hunters remained mostly undaunted. Retail day traders, this bull market’s steadfast ally, are again buying the dip, snapping up shares at a clip that according to JPMorgan Chase & Co. was unprecedented. Dip buyers emerged late Friday, sending the S&P 500 up more than 30 points in the final 10 minutes of trading."
...would be interested in views regarding if dip-buying will prevail this time eventually, or if the shift in central bank policies is fundamental enough to end the bull...
Personally I consider a Monday NDX rebound more likely than a continued sell-off, I think Santa rally bets will still play a role, long bonds have actually been rising the whole week, which could of course mean pricing in of a policy mistake - but the 2 year also rebounded Friday and is pretty close to where it was just eight days ago, so one could also argue that overall bond markets disagree with the extent to which the hawkish narrative is priced into equities... if instead Omicron was indeed the driving factor, then I wonder why stay-at-home trades should continue to under-perform, and would argue that potential further supply chain issues could well be priced in by now - with NDX Friday low a bit more than 7% below the intraday ATH in November.
Again, just my personal weighing - looking forward to responses..!
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if that's not gonna turn into a 200-point min rally into the close, I'll voluntarily buy 0.01 BTC as soon as it becomes eligible for demo accounts...
_20210727_14_05.thumb.png.48b7f83ea96998f44e631f57c03aa139.png)
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38 minutes ago, Kodiak said:
Everybody looking for BTFP🤑
Agree. Last earnings season didn't lift NDX at all, a small correction came shortly after it was out of the way, followed by a rally - part of the narrative was support for growth stocks by lower discount rates..:
that obviously wasn't dominating enough yesterday to keep NDX in the green - but could well explain its out-performance (like last week).
..after several hypothesis about bond market action driven by positioning (short squeeze), other technical factors and pricing in/out of policy mistakes had been flowing around since the last dot plot, more recently the moves are frequently attributed to growth worries in mainstream media...
trying to piece these and other mosaic bits together (highly subjectively): economic growth worries may be priced in sufficiently for now in markets like NKY and Dax (also the SPX drawdown was already larger than the previous one). NDX may have been held up by the longer (secular) trend and the characteristics of its main members as "new defensives" established since the outbreak. This view would imply more likely a rebound (following Dax and NKY today). Earnings season playing out similarly to last time (blowout numbers unable to give much positive impulse) seems unlikely - that would simply be too easy IMHO, plus mentioned yield moves, plus less inflation worries (not least due to recent corrections in commodities like lumber, oil...) give a very different backdrop...
strong rebound in last half hour of trading yesterday points to BTFP having already started - could quickly lead to FOMO kicking in again...
an alternative view would be that it was simply more idiosyncratic moves (NVIDIA, Moderna, Tesla) providing relative support yesterday
(personally, am currently not trading real money, but in demo and pending social trading account currently positioned for the former)
guess relevant wildcards are of course neg. earnings surprises and a crypto crash... amongst others
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presumably, if someone decided after the morning action to get out of some very large positions successively, and buys a few bits back between sales to keep prices within an acceptable range, charts would look very much like this...:
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...engineering a Q2 earnings rally in July would probably be easier for WS from somewhat lower levels...:
_20210625_15_17.png.0e5169066622ec11e9868c031e376eef.png)
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probably missing the point, but I don't get the growth stocks (QQQ) short to hedge against correction in cyclical commodities, sorry. NDX went nowhere since mid Feb, while oil is up 20% or so. That doesn't mean tech is cheap, nor that QQQ would rise (again...) when cyclicals crash. but hasn't the narrative been reflation-rotation for a while...? if that simply unwinds - QQQ obviously will outperform. on the other hand, in case of a general risk-off, with multiple compression in the center, you'll do very well. Personally, I see too much risk of NDX catching up first. next week expiry date - not that I would have much data on these things, but wouldn't be the first time that range breakouts come just in time, almost like ma
nipulationgic...
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with CPI out of the way - finally continuing to price in the blowout Q1 earnings...? ...or simply continuing recent yield rise reversal..? ..was it Minerd who saw the 10 year below 1% in H2? - can't remember right now...
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On 04/06/2021 at 06:13, Kodiak said:
Buy the dip or sell the rip?
Definitely sell the rip. And certainly also sell the dip.
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Okay Taylor Riggs, what is it this time? Obviously not earnings - and neither long-term real yield rate of change.
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Call this is a biased post - but I hated Bitcoin before I went short - so with this disclosure, let me just repeat some "fundamentals" to add to above math...: imagine you missed the opportunity to take part in the unwinding of the greatest spoof in history... how would you explain that to your grand kids..?
In times of drastically increasing climate change concerns, out of lack of trust in their democratic institutions, people of the developed world put their money voluntarily into an unregulated pseudo asset, administered by "miners" who no one knows, which reside mostly in a country run by a totalitarian regime, which already started to shut them down for excessive energy consumption, and with a legal system which is at best obscure to the average Bitcoin "investor", who most likely doesn't even know a single symbol of their language?
You couldn't make that up.
Masses fooled once again by a conflicted interest bunch who (for more than a decade) have been drawing on the US inflation narrative - while 30 year USD real yields stand at a grotesque seven basis points. Fiat currency debasement - my ****!
Congrats to the Coinbase insiders who sold shortly after the IPO.
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2 hours ago, Rintel said:
Math says there is still a lot of downside risk
well, if math says so, let's raise the m**********r...:
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50K might be a too conservative target... any thoughts? 43? 25...?
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The 2020 halving seems priced in IMHO...
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8 hours ago, Courage said:
That would be giving away the secret sauce😂. Jking. I can't give you my math because it's customised to my taste in terms of duration of investments, ( I can however tell you the principles and ideas behind the math. If you put it together you can build your own personalised one ( a major component of my model is actually on my profile page 😁)
Price Observations ;
Price moves in a horizontal range in smaller or larger time frames before moving higher or lower.
The objective is to capture the statistical “best price” of a security by purchasing it at or near the bottom end of the volatility adjusted price range if bullish, and sell at or near the top if bearish. ( time frame is user dependent )
Volatility Observations;
Volatility is an important input because it's the measure of dispersion in returns and is always mean reverting.
Implied volatility is also an important component because it is what the market expects volatility in the future to look like. (Time frame of forward outlook is user dependent ).
Calculating this for the VIX AND THE VXN AND BOND MARKET AND OIL SUPER IMPORTANT.
Liner Interpolation ;
Volatility and price generally have an inverse correlation and the ranges are constantly changing, so I use liner interpolation to give me a rough estimate of what range the price could be statistically.
This is one component of my customised risk management approach. Then there is the macroeconomic conditions to consider as well.
Then comes the rest; execution AND PAITIENCE. ie. Having the confidence in the math to buy when people are afraid and sell/reduce exposure when people are euphoric.
I can't attached the paper I derived this calculation for on the platform. But you can find the paper here
thanks. the ranges you provide are not symmetric around the previous close - so there is a mean return assumption?
(interesting paper - providing some evidence for vol of vol being a return driver - can't see the connection to the risk ranges immediately - except maybe the general insight that the width of the ranges needs to be updated frequently - you "wrote paper I derived this calculation for" - you're one of the authors?
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...or those, for that matter? Looks interesting - would be good to understand where they come from
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On 07/04/2021 at 08:25, Courage said:
Good Afternoon peeps .
Here are my volatility adjusted Risk ranges for today
SPY (Bullish) 393.032 - 410.218 prev. close: 406.12
QQQ (Bullish) 315.822 - 335.269 prev. close: 330.82
IWM (Bullish) 206.225 - 230.352 prev. close: 224.31
XLK (Bullish) 131.229 - 139.923 prev. close: 137.69
XLF (Bullish) 33.28 - 35.433 prev. close: 34.67
XLE (Bullish) 45.833 - 51.185 prev. close: 48.98
XLU (Bullish) 63.106 - 65.874 prev. close: 65.02
XLI (Bullish) 95.799 - 101.954 prev. close: 99.76
XLC (Bullish) 72.378 - 77.351 prev. close: 76.34
XLP (Bullish) 67.918 - 70.797 prev. close: 69.14
XLB (Bullish) 77.305 - 82.807 prev. close: 80.65
XLY (Bullish) 165.771 - 175.936 prev. close: 174.02
XLV (Bullish) 115.213 - 119.07 prev. close: 116.75
XLRE (Bullish) 39.206 - 41.288 prev. close: 40.43
XRT (Bullish) 82.639 - 93.874 prev. close: 90.8
GLD (Bearish) 157.381 - 164.397 prev. close: 163.22
Good luck out there.
Courage
how do you calculate these - if you don't mind..?
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...kinda scary..
not to forget chips - or chip-making machines:
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22 minutes ago, Caseynotes said:
US yields drawing a lot of attention recently.
yes, and more the rate of change than the level... (in particular for the more recent real yield move)
also, in February until this week spread compression seems to have overcompensated the impact on credit:
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Dunno if this means anything...:
Marketwatch.com
..any views..? has hitting March's global liquidation low (just) slowed the recent long-end sell-off..?
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guess this played some role:
and this (maybe to a lesser extent):
https://www.yardeni.com/pub/commit.pdf
Plus GS and JPM pumping things up with the "supercycle" story. Considering the US situation hopefully gets fixed soon, then I could imagine an unwind of speculative positions (for whatever reason) might trigger a reversal
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Obviously this hit my stop today. Staying out for now - waiting till the institutional money has flown in... Actually, think a new NDX narrative might emerge with TSLA intrinsic values etc appreciating with their BTC holdings...
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For the sake of completeness some arguments frequently made by the conviction bulls - would be keen to learn what you think on those: valuations outside US and China large cap tech and tech-enabled consumer sectors are not that drastic, and in relation to rates even those segments are priced much more reasonably than 1999 (recent US bear steepening might change that if it continues). Indicators like VIX and Skew (or the legendary CS Fear Barometer) are quite far away from mania seen not so long ago. Wall Street strategists have been relatively bullish, but not excessively (BBG survey).
I wasn't around 1929 (please excuse this cheap punch line, also adding it for the sake of completeness only...), but guys then didn't have the Fed's demonstrated willingness to supply the non-US world with dollars and buy "fallen angels'" debt, nor the BoJ's equity ETF purchases. There was also no common European debt about to be issued, nor a recently established Asian free-trade zone, covering 30% of the world's GDP.
Years before, though, there had been major technological breakthroughs. And there are some parallels today: self-driving cars, drones, mRNA vaccines, hyperloops, rockets that can land and be re-used (usually...), 3D printing, dating platforms where ladies make the first move... just a small set of examples of science fiction having become reality. So yes, the world's economy looks like it will be busier than ever soon - to many (personally I have no clue - I can't even forecast what I'll be doing myself in 30 minutes, makes me kinda shy away from attempting to shape a view of what the rest of the world will be up to years from now).
Nevertheless, if we get a pullback, I believe it could turn quickly rather violent. Not least due to current relatively massive leverage (see e.g. margin account balances), the likely heavy use of protection strategies (given recent runs, bubble warnings and high valuations) which will accelerate any sell-off, but mostly for quick contagion - a not so subtle risk after an extended everything rally and rock-bottom interest rates.
Wondering if it's finally a time when OTM strangles might work one way or the other, and if short XBTUSD could prove to be a reasonable bubble-end hedge..
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Significant levels between now and 10% higher, anyone...?
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Yes, high probability of further inflows. Morgan Stanley, and Dalio reportedly considering some - among others. Agree that this might as well quadruple BTC to hit Minerd's expectation.
Nevertheless, I see huge downside risks - e.g. regulatory, not least due to the waste of energy. I doubt there will be significant, lasting consumer-price inflation in the foreseeable future - I'm with Powell on that. We'll have more asset-price inflation, more hunt for yield - and Bitcoin doesn't provide any, or as Grantham put it, the value of Bitcoin's future discounted cash flows is nil.
Plus, while I'm with you that at the moment the potential role as a system-crash hedge is likely not buyers' main point, I trust in people thinking this through as well, eventually: yes, fractional reserve banking has its risks, but what will happen when we all have our savings in Bitcoin and the price has stabilized somewhere? we'll start lending out what we don't need for interest... and soon someone will come up with the idea that it is quite unlikely that all their BTC lenders will want their money back at the same time, and find higher yielding things to do with borrowed BTCs... Then we will have a leveraged BTC banking system. Like the fiat-money based one we have now. Just not so well regulated and secured.... I wait for that thought settling in people's minds and the system-crash value getting priced out.
However, you're completely right about the danger, and my position is tiny, and I don't see that change, and wouldn't recommend large exposures to anyone.
_20210727_14_05.png.a1816d44f6ce67937fdc9f5865545686.png)
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NDX
in Indices and Macro Events
Posted
Interesting! great chart.