The fundamentals “kindly departed” several months ago, ( if not a full year ago ) so….from that perspective alone – purely fundamental traders ( if such an animal exists ) have been shit out of luck for some time now.
Technical traders will have “long ago” been shredded to bits with attempt to “ride the short-term trends” in that the “short-term trends” have generally been “ranges and spikes” effectively blowing to pieces any single “technical strategy”.
And those of us that employ a combination of “both” ( admittedly struggling with the usual “extraction of profits” ) sit relatively idle, looking for opportunity – should “opportunity” present itself…..ummmm – ok so………when?
So who’s currently making money with their trading these days?
- Is it the “Fed chasers” of day’s gone by? ( now that the Fed is in full-blown taper mode – does that make any sense? )
- Is it those who caught the turn in the precious metals market / gold / silver / mining companies? ( looking at my mining investments as of this morning, one would think not. )
- Or could it be the savvy “corporate investor”? Weeding through balance sheets daily, seeking out those specific / individual companies currently poised for growth.
None of the above, as this is all by design.
You are “supposed” to lose all your money. You know that right?
During times like these, we run into the casinos with our pockets full of pennies convinced whole heartedly we’re gonna hit the jackpot. The T.V tells you, your neighbor tells you, your son tells you , your banker and broker tell you ( man……I’ve recently even had a 78-year-old retired school teacher tell me! ) – Everything is up. Buy, buy , buy. Nothing to worry about here – all is well.
Metals “pole axed”. Stocks “crammed”. Dollar higher.
Nervous at all?
This is all about position size, your ability to manage risk, and the balance of greed and fear.
The rest of it “isn’t supposed” to make any sense.
With the current geopolitical landscape looking a little more interesting than that of the currency world ( even as the two are so interconnected ) being away from “the office” this entire last week has me “knee-deep in research” here this morning – looking to get caught up.
Wow. You step away for a single week to get married ( half thinking you’ll miss something “huge” ), your own life changes “completely” and the rest of the world just keeps spinning. Business as usual.
Or perhaps not.
I firmly believe that Russia will soon take further actions to take control of Ukraine, and that “seemingly docile markets” have yet to price this in. Or at least – the machines that make things “go” are still very hard at work “making things go”.
I encourage everyone to spend a bit more time “digging past the usual headlines” to uncover what’s really going on with Washington’s interest in Ukraine – and how serious a situation is developing. Putin didn’t need to sit around a single minute knowing full well that a full military “showing” was what was required in order to keep the scales in balance.
I can assure you that we’ve only just seen the beginning of what will likely be a very a long, drawn out, and VERY serious conflict involving The United States, The EU, Russia and China.
China’s HSBC Flash Manufacturing PMI number is out later tonight and is expected to show continued contraction in China’s economy, and apparently we’ve seen the ol US Dollar take a bounce from a pretty solid area of support.
Talk of U.S rate hikes “any time soon” are completely ridiculous as the media machine continues to promote / suggest that everything there is “up up up” and all is coming along nicely.
It’s great to be back in the saddle here again, and also to have shared such a wonderful week with friends, family and my new bride!
Some pics to follow – and thank you to all of you who’ve stuck around / wished me the best!
We’re back baby!
Lets get this thing goin!
I feel I’ve gotten a little soft here during the past few weeks.
In not being as “overly thrilled” with the market as I normally am – the blogging has suffered as……if you don’t have anything good to say well……you know.
This tiny blip / risk aversion based on “at least two” of the black swans we spoke of last week restores some faith in the fact that markets are still markets, people are still people, and emotions are still emotions.
The Central Banks do all they can to lull you to sleep but in reality are relatively powerless against the “true forces” of fear and greed – where human emotion will always take the front seat.
Take for example the massive printing efforts in Japan – propping up the Nikkei. It’s all going to look pretty ridiculous as “only a matter of days” can erase “1000’s of points” in a heartbeat. Imagine when things really turn? ( as they will ).
Russia has put Obama back in his bunker with suggestion ( if not action already ) dumping U.S Treasuries as well US Dollar reserves alongside their good buddy China – essentially holding the capability to “level the U.S economy” without the use of a single missile. You gotta love that eh?
As suggested earlier Putin will not let these tyrants in Washington get their grubby little mits on Ukraine without a fight….and rightfully so (if you understood anything at all of the importance of Ukraine, and its massive network of natural gas pipelines that feed Europe).
Obama can kiss my ass. He’s beyond desperate, and essentially “toying with war” as Russia merely protects what it already has.
Me…..I’ve got important things to take care of over the next couple of days – “very” important things…so I will look for WWIII to start Monday at the earliest ………..and “never” at the latest.
Have a good weekend all – keep your eyes peeled late Sunday.
Short AUD – killer, and the long list of gold and silver miners entered “weeks ago” doesn’t hurt either.
Big surge in JPY ( and we all know what that generally means right?) as commod currencies ( in particular AUD he he he… ) make a pretty dramatic turn – downward.
The Nikkei has also fallen “below” it’s bear flag / sideways pattern from the last 2 months so…..what’s left?
Good ol U.S Equities broke trendline a couple of days ago….now backtesting and wait for it…….wait for it…..
We may have to “wait for it” a little longer as one really can’t say for certain here but – weakness across the board.
Don’t ask me why.
It’s really not that important…for now at least.
Step on up, place your bets, cover your ass.
The Great British Pound………London banksters…..need I say more?
So…..I’ve been short the Australian Dollar for several days now and now suggest you have a good look at GBP. Let’s learn something about forex here……
I’m “short AUD” and “long GBP” so??? How about trading the pair “GBP/AUD”?? LONG! YA!?
P.S….this thing falls into the category of “face ripper” as it’s volatility is nuts ( it can swing a couple hundred pips in the blink of an eye kinda nuts) so…….please don’t go bet the farm.
For as many years as I’ve been trading and analyzing markets I’ve been told time and time again….watch copper.
If you want to get a good bead on global growth / demand just make the simple connection between “that” and the obvious need for copper.
You can’t build a building without it, you can’t build a car without it, and you can´t produce anything “electronic” without it so…..I guess that about covers it.
It’s been widely correlated with “China’s growth” as a general bellweather for continued expansion and development.
Nice chart below. I guess the default of China’s Chaori Solar Energy may have caught a couple of peoples attention. Smart people anyway.
The Aussie Dollar ( my synthetic “short China” play from a few days ago ) getting hammered as we speak.
And who’s saying that saying a keen eye on the fundamentals doesn’t do much for their trading?
The biggest story in the financial markets this morning is the weakness in Chinese assets.
The Chinese Yuan sold off aggressively, experiencing one of the largest one-day declines since December.
Chinese stocks were hit hard with the Shanghai Composite dropping more than 2.8%. Although a significantly weaker trade balance triggered the selling, China’s central bank has been actively allowing the Chinese Yuan to weaken.
Chaori Solar Energy was allowed to default on its corporate bonds ( as suggested some days ago ) and is currently in the process of “selling its solar farms” in order to pay up.
Markets “appear” calm here this morning in a general sense but don’t get too comfortable as this has got some pretty far-reaching implications.
Emerging Markets “EEM” continues its downward trajectory, as the Japanese Yen looks to steady / make a move higher.
Shakey ground here “globally”……but of course – no trouble in U.S Equities.
How’s “short AUD” looking now suckas??
You know…..if I was a terrorist I’d likely start with….well I dunno…maybe I’d start foreclosing on people’s homes and pushing them out into the street where they’d be much easier targets.
Then I’d likely put considerable effort into devaluing their currency making it even more difficult to survive and provide for their families, all the while outsourcing all the manufacturing / factory jobs overseas, choking off any opportunities for employment.
At that point it only makes sense to make health care completely unaffordable, and perhaps I’d allow my friends running the insurance companies to just get away with murder there as well.
I’d kill education and even if education “was” available it would be far to expensive as….you can’t have “smart people” running around now can you?
Terrorist hate smart people.
Then if that wasn’t “quite enough” I’d likely look to monitor every single cell phone and email correspondence country-wide, looking to gather that information and use it to the best of my abilities to “really put it to em”.
Then…..just sit back in some overly priced leather chair…..write myself a big fat bonus ( somewhere in the 7 figure zone ) grab a little popcorn and watch the show.
Or maybe if I got bored, I’d throw darts at a map and look to find some other country to go and do the same in.
Sound at all familiar?
I encourage any and all to pass this one around a bit as what the hell……..perhaps I’ve now made the list on some “surveillance opp” having used the word “terrorist” in the title.
No wait……no “real terrorist” would ever be so dumb as to do that.
I imagine I’m ok.
At this point, having taken a lump er two holding a couple of USD longs, it’s an easy “stop and reverse” for a decent trade in the opposite direction.
We’re pretty much looking at the long anticipated “USD waterfall” here as of yesterday, and you’d not want to get stuck on the wrong side of that.
Pure play – a simple long both GBP/USD as well EUR/USD.
Otherwise, some great comments and ideas on AUD here overnight ( thank you everyone who’s contributed ).
As counter intuitive as it may seem I’m easy holding / adding short AUD while holding these two “new trades” for a shorter term rip. It doesn’t “appear” AUD has got much life left in her anyway.
USD looking to take out lows from October….and then some. Easiest play – long EUR and GBP.
You’ve really got to shake your head when the “poster child currency for risk” continues to move higher in the face of looming credit crisis in China, possible war in Eastern Europe and a “soon to be announced” USD debacle in the states.
Or do you?
Doesn’t it make the most sense to “those of us in the know” that things generally go “higher” before going “lower”?
I mean really…….markets don’t “crash” from the lows! Markets fall from the “highs”!
Currencies really being no different.
I imagine in a couple of days ( or perhaps even within a couple of hours ) you can look back on this and say “Ya ya Kong was early as usual…damn! That Australian Dollar really put up a good fight there near the end”.
And that will be that.
At Zero Hedge:
UPDATE: It’s happened – China has suffered its first domestic corporate bond default as Chaori fails to meet interest payments on schedule and rather more surprisingly failed to receive a last-minute mysterious or otherwise bailout…(read more)