786Trader

Good point, hence caution with short positions and take profits quickly, with multiple in-out trades than take short positions aiming for bigger swings.

Is it just me, or am I the only one who thinks it's time to suspend all market trading for 3 weeks? It would appear that the only way is down, there is no cohesive policy from the worlds central banks (only partisan moves designed to serve local economies) which are being over run by the sheer power of the world's markets. Combine that with the most pointless oil price war ever (who pumps more oil in a shrinking market? So much for supply and demand or flood the demand according to MBS and Vladimir Vladimirovich, which upsets mostly US producers). The most sensible policy surely is to suspend the markets until we have a clearer understanding of exactly what is going on and resume markets when clearer, saner more rested minds prevail. China did not hesitate to do so and so avoided full on market capitulation. Why are we not taking the cue? Suspend markets now, before a rout becomes total annihilation. Give governments and central bankers time. Give traders time. Let the market breathe. Or is it just me?

Coordinated action from the world's central banks have failed to calm market sentiment. Why? Because it is not the cure for Corvid 19, because the money being poured into equity and debt is partly going to the wrong place. Because the markets are still open. The only survivors will be the cash rich. Normal people however face mounting financial meltdown. Watching one's 401k evaporate in a matter of weeks is not good for ones constitution. More so, those who shifted their pensions to market trackers, which everyone would have agreed was the most sensible thing to do say, six weeks ago. Right now, traders everywhere are realising to stop this virus the world trade has to almost stop for 51++ days. Never before imagined. But here we are. World trade will effectively shut down by up 70+% for 2 months. Maybe more. Hopefully less. This is hurting everyone, but those normal folks who are on zero hours contracts, have anything to do with tourism, flights, sports, airports, transport,restaurants, oil and related services, banks, or have tight profit margins are going to experience real pain. Or go bust. Insurers are in a bit of a sweat too. Sure Netflix, Amazon and online food retailers are in for a boon. But the positives are outweighed by the negatives. I went to my big supermarket this morning (Tesco), had to see for myself what is actually happening. It is carnage, palpable panic. It was full and partly empty at the same time. There was no toilet paper (of course), eggs, tinned food, pasta, dog food, beer, anti-bacterial wipes, beef and pork, whole milk and potatoes. Impressive. Naturally I saw opportunity. Couldn't help it. I was also the only one wearing a mask (very busy crowd) and gloves. The penny hasn't dropped yet for most people and they are wondering what the fuss is about. My son tells me lots of kids are coughing at his school. I am seriously thinking of taking him out of school. Point being people are still in shock and clueless. Like the markets.Here in UK our Corvid 19 numbers are inaccurate as they only test in hospital and those infected are being encouraged NOT to go hospital, making accurate assessments of the true numbers involved impossible. Back to the point about intervention and why it's not working for very long. Interest rates are an irrelevance in this situation. Direct investment in people will help, certainly it will help the majority of normal people and small business owners. Providing unlimited credit to banks and trading houses will keep the banks afloat but not airlines or tour operators. Statutory sick pay of £92 pw covers few of life's expenses. Constantly funneling resources where it is not needed instead of where it is will only exacerbate the problems. My boss, by the way is not a happy bunny (his pensions are heading west faster than his hairline).

Not marxism. Good grief man. It's direct economic stimulation. Also people are the economy. It is only people that value money/ gold/ oil. As I mentioned , it is controversial. However, the present value system is in need of overhaul. Though Marxism is not the answer. Suggesting a fairer distribution of wealth and resources is quickly seized on by many as Socialism/communism, which it is not. It is merely pointing out the reality of the situation.

When the esteemed leaders of the world contemplate courses of action to remedy the current, apparently unexpected economic malaise, they may consider alternative QE. QE direct. Instead of purchasing Government bonds and other financial assets why not invest directly in people by giving them money on an inverted scale relative to tax payments, with no other criteria save being taxpayers, based on last years tax returns? This places money directly into the economy through people power. It may sound controversial, it is controversial, but it will work. QE 1 and ultra low interest rates saved the economy at the expense of years of austerity because of profligacy in the financial sector. It was a controversial approach. Consider $4.5 trillion in US and £454 billion in the UK, the approximate amounts in 2009-2010. The public will not wear or vote for more austerity. QE direct, or QE2 will work because of the increase in GDP and demand. Afterall, without people there would be no economy. Put money directly into people's pockets. I am sure the idea of free money is anathema to many, but times are changing and embrace the change. Just putting the idea out there.

Suspending disbelief temporarily in order to digest the magnitude of arrogance displayed by MBS and Vladimir Vladimirovich. In a last man standing battle of wills, it would appear both Saudi and Russia are prepared to risk all in a winner-takes-the-least bid to see who is more arrogant and who has superior power. (In this case who has the capacity to destroy the price of oil). Naturally, for consumers this is a boon. However, this is an unsustainable war. Already the strategic reserves are in play and Russia is committed to pumping more oil than ever, at a price that is not even profitable. All to prove a point. This does not please the oil producers of USA or even Norway who cannot possibly make a profit on oil on current margins. Only Saudi can. But not for long. Frankly, it is a tad depressing (but not surprising) to think the leaders of the world are so arrogant, such is the disadvantage of unconstrained power. Or cheap energy, which ordinarily would be a positive. In the case of a finite resource like oil it is astonishing. Financially, the price war is unsustainable making oil futures are very tempting indeed.

MBS is not a man afraid of chopping off his nose to spite his face. Nor is Vladimir Vladimirovich. Was concerned on Friday when the expected agreement of OPEC+ failed to materialise. Was even more surprised when OPEC+ became OPEC--- and the oil market became a free for all, no holes barred race to the bottom of the price of a barrell. With lack of demand due to the unexpected Corona virus , the ever loving friendship group that was OPEC + started to fight over remaining revenues. Russia needing the cash obviously refused to bend to MBS's will and here we are. Naturally this does not bode well for Exonn or Total or any of the big 5 oil companies. Even Saudi's short lived gains in market share will be measured against the significant loss of revenue achieved by having a fire sale with 30% OFF. It was cheap before friday but now it is bargain basement cheap. WTI, Brent and Gasoline represent bargains, but how much lower can they go? Either way it is carnage. Look to buy the Dow at 22k and oil and gasoline futures now for December expiry.

My My, what a difference in 18 days.... Dow has tanked currently 24945. All because of a factor not included in most calculations, the F factor or the random event not usually considered. In this case Coronavirus, which President Trump insists will miraculously go away in the spring. Either he knows something we don't (probably) or he is optimistic in the extreme. In it's 7th straight negative trading day it would appear the markets feel differently. Looks like interest rates are about to come down again. Commodities are being savaged, especially oil and gasoline. As for equity.... retracing back to levels July 2019, chasing December 2018 base levels of 22000 where it may stop. So far we have seen a correction(necessary in my view) of the melt up of Jan-Feb 2020. It is not a time for panic, but a time to wait , watch and take the new opportunities. Have just traded out of my position on the DOW for a face saving profit. Hero to zero and back to hero again... had to endure a winter of humiliation on account of it. But stuck to my guns and gut instinct (backed up with cyclical data) and feel relief.

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?

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.

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.

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.

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.

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.

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.

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.

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?

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.

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).

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...

@ 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.

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.

😁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.

@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?

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.