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786Trader

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Everything posted by 786Trader

  1. Have just read Trump's proposed 2021 proposed budget. Is it me, or is it imaginative (as in fiction), or probable, as in cut cut spend, cut, cut, spend on my friends? Either way it is more political wish list than likely scenario, I fear. I refer , of course to the principle assumption; the US economy will continue to grow at a steady heady 3% well into the decade. Assuming everything continues on as it has done....... I have been waiting for a market correction for the past 6 months, based on experience of the cyclical nature of markets. I have been proved incorrect and have experienced some financial pain sticking to said premise (called the Dow @28350). However, assuming there will be no change to the ever expanding nature of the US economy brings me back to my first financial teacher, who's mantra is "assume nothing". Life has a tendency to kick one in the most personals when one least expects it and expecting the US economy to relentlessly kick-on at 3% is great expectation indeed. Or am I somehow wrong again? If China can robotically grow GDP @7-8% pa then why not the US @ 3%? But China is having a nasty surprise with the arrival of the Coronavirus. Naturally, US will not be affected much.....See, the problem with assumptions.... Just the same, I am sure many of the Presidents fans and backers view the proposed budget as great facts waiting to happen. And not the comic it may look like to others. Twixt the two reality maybe? Or ne'er the twain shall meet?
  2. Regarding $£ pair and direction over near and medium term, I concur with your position that £sterling has bottomed and has only one way to go : sideways (only joking). The £ has been historically low since 2016 and has reached its nadir, it is fair to suggest. Brexit bashing has done its worst, though we may not have seen the last of it and the future relationship with Europe will not be as smooth and easy a negotiation as some would wish. Sterling is priced as cheaply as is reasonable atm though others may suggest undervalued as compared to all other currencies. The election may not be as decisive as the polls suggest. Infact, BloJo may win but with the slenderest of majorities. He is gaffe prone and entirely self serving so the majority may not last long. However, the economy will continue to trundle along, doing well enough and out-performing many other indices. It may well continue to do so. Regarding possible market readjustments, we are due one, dare I say overdue. Sterling is a reliable currency. In a down turn it would do well. Also, in order to pay for the inordinately vast spending plans interest rates may need to rise, by a point or two probably. In short, I agree, a long position on Sterling is a viable strategy all the way past 1:50 and beyond, same regarding euro position 1.17 will quickly become 1.30 regardless of Brexit and future relationships.
  3. Another record broken, as the Dow breaks 28k, another high goes higher. The Bulls are sure the only way is up. Regarding the China trade talks: are they really going so well? Wall street thinks so, but Shanghai is not as convinced. Maybe they sense the trouble in Honk Kong is not really over, or maybe they don't trust the eminent Mr Trump? Curious how there is little mention of the troubles in HK when discussing China trade talks, as if it were an inconvenient irrelevance. Or an elephant in the room? Or the next Tiananmen square? Curious indeed. As is the disregard of the ever widening Federal deficit hitting $134 billion last month. Mere peanuts? It would appear, it is the time of the Bull. But after the November figure fest and Xmas bump, winter will be upon us. The time of the bears? Or more unchecked expansion, profit and positivity? I am hedging my bets, even if the hedges are costing me margin. Either things will change or I miss out on my Xmas and years bonus by being overly cautious and sceptical.
  4. Agree the impeachment is turning into a bit of a farce. It is one thing knowing what occurred and quite another to prove it, as the proceedings show. Impeachment does not work, often has the reverse effect. Also, I concur, the trade war is entirely Trumps making and he could end it today if he chose. I might also suggest the past 18 months have more than consolidated the markets; they have consistently broken all time highs. We are witnessing the top of a cycle, yes it could kick on and break out into the stratosphere, but not for long. Sooner or later, for better or for worse, the basic tenets of global free market capitalism will be questioned with regard the continued wholesale exploitation of our planet's resources and people, regarding long term sustainability. Thorny issues indeed. The easy way is to ignore/avoid and hope for the best. Not to mention global real politic having an effect on US equities and commodity prices, thereby validating the watch and wait strategy. Thanks fo the interesting and informed comment (as usual) and I wish you a fine evening.
  5. Here we are in mid November and the predicted market correction in US equities has so far failed to materialise. Market exuberance has continued and new all time market highs registered. The trade disagreements with China and the EU continue unresolved, climate continues to change (despite many deniers), Honk Kong continues in open revolt to China's heavy handed manipulation, the Middle East still foments discontent, and Trump is being impeached and yet the markets are unmoved. Some kind of optimism. How long can this last? Is the only way really up? Frankly I want whatever Optimism Plus the Bulls are on, as I am still scratching my head on the thorny issue of relentless, unchecked expansion and ever increasing equity values built on the earth shattering 2% increase in GDP. Either my slide-rule is chronically misaligned (+2% gdp=+14% equity increase since Jan 1st 2019) or this unchecked Bullishness is veering on arrogance or good old fashioned financial myopia. Or too much of a good thing. Of course, this could easily continue on until the cows come home or Trump gets re-elected, whichever is sooner. Or not. There is still a cogent argument for maintaining a hedge in this scenario, as witnessed in the gold price. Gold is high, as are equities and the demand for government bonds remains healthy, which is unnerving in itself (it's normally 2 out of 3). Even Lumber has reached its fair value. My point being this situation cannot be relied upon to continue in the medium term. Something has got to give. But how long? Christmas? Easter? Next election? Depends on the Presidents sanity, I guess. The Market Correction has failed to materialise, it is either late or is going to skip this cycle completely, or it's gone on one of those yogic retreats or said it's gone on one of those yogic retreats but has actually gone golfing. With the President.
  6. I agree with you Mercury, the President likes to appear to be standing up for the "little man" and blame any woe on someone/something else, but especially the educated, professionals in finance and/or anyone who does not share his ever changing opinions. Fine politics, true enough. Not so great economics. He could very well see the adjustment many of us feel is due, falling on his watch. Worse still before the election, (Warren would give him **** hell were it so). You are correct in suggesting he will be the first to loudly blame the Fed and probably threaten it's very existence and try and rebuild it in his image. (Not a good idea, but great politic). All very funny were it not really happening...... Have a great weekend.
  7. Powell seems to be reluctantly listening to Trump, with Trump wanting super low interest rates releasing even more cheap money into the system. The connect between low unemployment and inflation has shifted, as so much of the employment is very low paid or low paid, meaning one works but has no money to show for it at the end of a week/month, bringing very little potential for growth for the majority. The majority are now employed, but poor. Looks good for employment figures but bears little resemblance to the reality on the ground where most mortals live. There is a sense of foreboding in the economy. A feeling that all is not as well as it would appear. It could be the unease that the President seems to inculcate generally, or the more likely being an adjustment is due. Next year is an election year and Trump's ace (correctly or not) has always been the economy. He needs the economy to motor on unimpeded. However, Trade wars, Oil wars, migrant bashing and his general unpredictability (lunacy?) has stifled what should be a simple job of managing an economy that by nature grows. Point being, unemployment numbers are no longer as relevant as factors for growth as the numbers themselves no longer reflect the income and positive income coefficient of the working populace. The working majority are working poor living on minimum wage, who have not had the benefit of inflation plus wage increases year on year, while living with commensurately higher cost of living increases over the last decade. Strip those numbers out and there is a clearer but not necessarily prettier picture of the state of play in the USA and other OECD economies.
  8. There is never a dull moment in the lumber market. Have been sitting on a considerable drag on my numbers with Lumber, as it wobbled and dropped to the 30000 mark. I called Lumber at 34000 May 2019 and was left scratching my head trying to understand what exactly is fair value. However, Lumber is slow to grow, until it's not. Upshot being Lumber has quietly grown 35% over the last month, turning red numbers green. I know Crypto's have bulled higher but Lumber has recovered it's value. And some. Perhaps overly so, as most markets tend to over compensate, both positive and negative. The timing of which still serves to confuse, which must be on account of my novice status.
  9. Coining it? Dull it aint. Bitcoin that is. 10% swings, often in a day. Pumping up the price and deflating it like a giant balloon. Price doubled in 3 months. But then again it did lose 70% of it's value in 2017. Definitely not a one way bet. Stability is not the watchword with blockchain currencies. Plus there is little or no rhyme or reason for the swings. Even if there are fewer and less frequent coins being created. Volatility is blockchain's friend. $10 000 BTC, (again?) why not? A $4000 BTC again why not? Glad it's not vegetables or ice cream though. Though it is in China (certain veg) atm. New currencies... so do you trust the ledger?
  10. Wont be bullish on gold till it breaks out of $1350 ceiling. A concerted break above 1350 is a strong bullish indicator. Anything less is flirtation/divergence and gold will settle back down below 1300. A firm breakout above 1350 then the upside is $1500+. That's my trigger anyway.
  11. Look for the Dow to trend down unless Powell drops interest rates, as cost of trade war will slowly erode any remaining gains from tax cuts. Dropping of rates will affect $ and bond value. Uncertainty regarding itchy twitter fingered POTUS and who he is going after next in relentless pursuit of narcissism. Recent experience with Mexico suggests a man who cannot be trusted and who considers himself a master dealmaker (rich coming from an ex bankrupt) without even the basest of understanding of the art of negotiation. Which is a shame. Dow bias is negative late 19 to 20-22. Bearish sentiment it maybe, and have made plays to that effect. Would like to be proved wrong. (even if I lose a bit of money).
  12. Regarding UK European vote, new prime minister and Halloween. Brexit party is a reworking of UKIP which took 25% of the vote back in 2014 and less than 2% 2019, but without the obvious racist bias. Tory vote disintegrated due to inability to get a deal, which still looks nigh on impossible as cooperation and compromise are profanity and anathema to the 2 principle parties. Brexit party wants a hard Brexit (WTO rules) and has no creditable plan for the future barring bland paper promises and rhetoric. Tory party see the success of Brexit party and want some of that populist vote so will vere toward the cliff that is hard Brexit. So it will come down to a binary choice come Halloween: Brexit without a deal (10% tariffs and all) or Revoke article 50. The May deal negotiated with the EU being dead as a Dodo. There is still time for an election and a referendum (the results of which will be disputed by whomever loses). In short; more chaos, division and uncertainty. Then we look at the shy and reticent President Trump and witness his weakness for tariffs again. Not content with 25% on China he is now threatening Mexico with escalating tariffs which will please all of those vehicle manufacturers no end, having just completed the new NAFTA, well more NATA without the "free". His penchant for tariffs knows no bounds. Blaming immigration or foreigners for ones ills is classic psychology. He wants America to go back to the 50's of his youth it would seem, even if most the youth of the 21st century have no interest in going back to a time they never knew. Old man thinking. Combine that with some old fashioned Gun Ship diplomacy in the strait of Hormuz and we have the potential for genuine uncertainty/war in the middle east again. The markets will love that. What is the correct strategy? Considering the fundamentals of the global economy are in pretty good shape were it not for inconveniences such as trade wars, unnecessary tariffs and potential oil wars in the gulf and the world's most powerful leaders being complete narcissists. Strategy#1: buy low, sell high. How low will the Dow go? That depends on how determined administrations are to appear completely **** minded, atm they are very determined...
  13. @ mindthegap Did not agree with much of the linked you tube video. Thought he was full of it to be honest. BS with a sprinkling of useful truth. He may have been to Asia but completely failed to understand them. Foxconn make Apple devices in China because there is no way Apple could make them as well, as quick or as cheaply in the US or even Mexico. For example. So either prices go up or Apples margins go right down. Plus everyone is paying more for anything made in china, including simple items like shoes. Not inflationary at all. Ever considered China may do to Apple what Trump has done to Huawei. Trump is a bull in China's shop. And we will all have to pick up the tab.
  14. Interesting postulation. The big bear? Not quite so convinced. For mostly obvious political reasons to do with supply and demand. Brent to $28? Not anytime soon. WTI crude an unlikely maybe, but Brent ? I am wholly unconvinced. The markets are not over supplied. Demand is as strong as ever. Not to mention sanctions on Iran and Venezuela. Saudi will not continue to sell oil on the cheap, even if Trump tells them to, though the Russians will with their current batch of chlorinated crude. A $28 Brent implies a Dow @18000 or less or vast reserves newly discovered. A market adjustment where the Dow rocks down to 20K late 2020 is a solid maybe, but oil? Graphics tell a story, but the giant big bear has not convinced me. Personally, I can see oil increasing through political tension and the strong possibility of actual conflict. The strait of Hormuz controls 30% of global supplies. Support at the $68 mark is considerable.
  15. 😁Quite correct a compromise should be the order of the day. Whether and when are closer to market concerns. President Trump tends to see these sort of negotiations as win/lose,rather than give and take (based on previous evidence and behaviour). My point being he doesn't accommodate compromise gladly and his advisers have an uphill struggle selling him the concept that compromise is a win. He is pragmatic when pushed, though and that could be his saving grace. President Xi is more inscrutable and opaque as is common in the East, though sports a healthy pragmatic streak himself, so face saving compromise may well win out. But not necessarily. Media circus is also valid, though that is how we receive most of our information and is filtered accordingly. "Sudden Death raised a smile.🙂 Have a good weekend.
  16. @TrendFollower US debt to China is $1.1 trillion. China hold $2.1 trillion in US govt bonds and treasuries. However, total US debt is aprox $22 trillion= all the assets held by all US pensions and investments. China, newer on the scene to creating debt has been making a fair go at creating debt mountains themselves, currently $34 trillion and counting, so need an ever expanding economy to cover their costs. Ergo China needs an export surplus and higher value exports at that. For the US and China it is a case of both of them wanting their cake and eating it. How does the hand get played out? That's the trillion dollar question. Xi has the advantage of time. Trump the advantage of financial clout (he's their biggest customer). However, the poker analogy is not really fair as the results are not binary, more quantum than binary. There are no big winners from an escalation of the current situation and the downsides are far from desirable. If this were to become a matter of attrition, Xi would win as Trump would run out of time and fail to be re-elected on the back of poor economic performance. Though Xi himself would hardly be sitting comfortably on his golden throne in Beijing either for the same reason. Who will blink first?
  17. As the trade war of words and tariffs rumbles on ominously, what was initially a match between President Trump and President Xi has embroiled the worlds markets in a game they did not need or want to play. Flirting with unnecessary turmoil and genuine recession was obviously a possibility when Mr Trump initiated this fight, thinking perhaps no one would dare call his play, but Xi also has an ego and is the head of a totalitarian, nominally communist state of 1.4 billion souls and not subject to the checks and balances of elections every four years. Making him an equally formidable adversary. When Dragons and Tigers fight a draw is the best outcome. Personally, I agree that the current trade agreements with China need adjustment. China is now the second largest world economy, no longer an economic novice and needs to accept that it has changed. With that change come responsibility. However, in order to facilitate change in the East one needs to understand the mindset. Unfortunately, Trump is subtle as a sledgehammer, somewhat devoid of the notion of tact or what the Asians call Face. Telling people what to do, then threatening them is not model diplomacy, not exactly art of the deal. As a consequence we are where we are, looking at a potentially turbulent June. Volatility is a traders friend so its going to get mighty friendly, with the only certainty being the price of oil. Which is another story, though esteemed President Trump has had significant input regards the price of oil too. Stormy weather ahead. Great for traders with Iron constitutions. The problem with high stakes poker is the stakes can quickly get too high.
  18. Ironic, perhaps that this time the market shakes and falls (equities and commodities) that the new trend for growth is more bizarre and abstract: Crypto. Something that exists only in the ether (pardon the pun), is not tangible or even easy to spend and only exists in code in the cloud. So as the markets wobble and bend in the world of men, the best investment right now is one that is not real. How does that make sense? I must be old fashioned, believing money represents time and energy exchange for the real, and such energy should not be stored but needs to keep moving, the physical manifestation being cold hard cash, exchanged for commodities, goods or services. But I am still having difficulty with concept Crypto, barring it being a wheeze to generate instant virtual currency as substitute for the physical paper stuff, just much more of it, without the backing of ,say ,Gold. Am I making sense? I find myself trading on something that exists essentially only in the abstract, yet has value because we put a price on it, but the it of itself only lives in the virtual. I was wandering if this is more symptomatic of the general madness that seems to be afflicting our planet and minds here in 21st century or if it's just me.
  19. Both. Depending. Have gone long and short on oil, gasoline, FX and especially Wall street ( most every time it reaches a new high). Have had less fortune with Lumber which seems to react in it's own sweet way, which I blame on the Chicago weather. Generally am looking for a swing. Then take the money and run. Have found stop losses set too conservatively are triggered easily when volatility is there. So approx 20% + or -, is the stop, which seems huge but has worked for me so far. Go to go as have duties that need attending to...
  20. Decided to try this Spreads and CFD's as an experiment, experience and alternative to the sweet 1.5% on offer with ISA's. I had a strategy, still adjusting. I have a plan. But having no experience is a bit of a handicap. I detached myself from the money so it was no longer personal. I have had enormous fun and learned more about the global economy in 4 months and 10 days than the 25 years I have been reading the economist, running a small property business or talking with my very cautious banking friends (all of whom advised me not to spread or trade CFD's ). Opened a demo account and a real one. Despite being clobbered in the lumber markets ( attracted to the volatility) oil, gasoline and tracking the Dow have more than bailed me out. Have I won every week? Not on your Nelly! Did I take it personally when trades did not work out due to impatience, greed or poor timing? To begin with yes. Patience and belief have become my friends, even if the belief has come down to **** minded instinct on occasion. Result? A profit of 38% in real money and 25% including margin or 37.5% without in demo after 4 months. Too much information is worse than not enough so have taken what makes sense. Have traded out of all my positions when Wall street hit 26671, with the exception of Calls on Wall street June 19 (26500), call on Footsie @6725 May and a call on June USD/GBP @1.3100. Still long on oil, though have regularly taken profits. Am still learning about calls and puts so will ride them out or cancel at close. If one is to enter this with intention of it being one's sole income, then you will need at least £50k as your base and not be upset if you lose it all. Do not be obsessive about it either, remember to enjoy life. Don't take losses personally, see them as part of the process. That's about all I can think to say on the subject for now. Save I am enjoying this far more than I imagined I would, but maybe that's because I am in profit.
  21. It is not often I agree with the President, but he has a point where China is concerned. Experience tells that in China a deal today is today's deal. Tomorrows deal can be different. The dragon thinks only of itself. I may suggest that only the USA raising Tariffs may not be enough and it may require concerted effort from the West plus Japan, to convince China to change its ways. However, the President has a way of isolating America that previous presidents did not. Also, not many countries are brave enough to tell Mr Xi to go take a big tariff. These tariffs, if implemented for the medium or long term will certainly create inflationary pressure. In turn raising rates and affecting growth both domestic and global. A war no one wins, neither farmers, workers, traders or bankers. Should this stretch to 2020 then reaping what one sows will be the order of the day both for USA and China, not to mention the rest of the world (recession). China needs to accept it is no longer an economically developing nation and accept its new responsibilities and America needs to understand that no one likes being told to change their laws to suit American business. Deals are based on trust, compromise and mutual gain. That's just good business. Or used to be.
  22. High stakes poker. Neither China, nor USA could afford a protracted trade war which would lead to short term and medium term negative market sentiment. USA and China are nursing considerable debt, which would only increase in the advent of tariff wars. A war of attrition also benefits no one in the long term. Not to mention halting and reversing market gains and sentiment. Compound this with the politics of big oil, the significance of successful and fair outcome to the current negotiations is doubly important, both for the present recovery and future well-being of the global economy. You are correct I feel, in suggesting Trump thinks and acts for the Now and XI has the luxury of time. Interesting times.
  23. Still a significant rebound! Real significant. Almost reactive. Still rocking up, suspect overly so. Enjoy your evening. Am off to annoy the wife 😶
  24. It's not often a market swings like Lumber has over the last 5 days. Certainly not slumber in Lumber, more WTF are you joking??? OK so 3.3% increase in spending on DIY and construction materials equates to price rises 3+% in a day of frenzy! But this has been more a very long weekend of frenzy and Lumber lunacy. Naturally one of my accounts has been caught in it (wrong side) and is looking at demolishing over a months worth of profits. All very sobering. My bias has been that Lumber should stay reasonably priced during a general slowdown, or economic pause. $38000 aprox for the price point. Just goes to prove that anything can happen. Plus a buying frenzy is something to behold. Expect others managed to profit. Well done and have a beer on me.
  25. Thanks Casey. Still trying to balance, or is that juggle opposing opinions and data streams. Really appreciate the info, some reinforces and other casts doubt.......... Good luck to you, ()tempered with good judgement).
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