I could not be happier to see this rally in stocks all over the world. The Transportation stocks in particular have been especially impressive (See here: Transports 8/24/16). But I want to point to some of the rotation we’ve started to see in other asset classes since last week. [Read more…]
The World’s Most Interesting Charts: U.S. Interest Rates
You guys who have followed my work over the years know how many charts I look at on a daily and weekly basis. Believe it or not, it’s probably even more than you think. Some things pique my interest more than others, of course, but it’s the collective weight of the evidence that allows me to formulate a thesis given all of the available information. The specifics include price and sentiment data from stock, bond, commodity and forex markets around the world, most represented visually in chart form.
Sometimes there is a specific scenario in a given market that can impact the direction of the price of a lot of different assets around the world. Today, what I see in US Treasury Bonds is what I find to be the most interesting trade in the world. What is happening in this market? Is this a top in bonds and bottom in rates? Is this multi-decade uptrend in bonds finally coming to an end? It’s hard to imagine considering you need to be older than 60 to remember a structural bear market in bonds during your wall street career. [Read more…]
[Chart Of The Week] The Bullish Island Reversal In U.S. Interest Rates
Over the last few years, all we’ve heard from the financial media and economists are how we’re in a “rising rate environment” and interest rates are going up. They keep averaging down on their irresponsible calls because they can. They have no skin in the game. They don’t care about making money in the market. The media wants to sell ads and who knows what economists are thinking. As the great Warren Buffett said last year, “Any company who has an economist has one employee too many”.
Meanwhile U.S. 30-year yields hit new lows in July proving all of their forecasts to be incorrect (shocking I know). And there is probably a good reason for that. They obsess over what the federal reserve people are saying, and blatantly ignore price action. Rather than focusing on what pays, they instead choose to focus on gossip from a group of people who never stop talking, literally.
U.S. Treasury Bonds have been a short for months (see here), but do we press these shorts or take profits? Today we’re looking at what I think is an extremely powerful development over the past week: [Read more…]
This Chart Has Suggested Selling Bonds Since June
We don’t have to make things complicated guys. We don’t get paid to tell stories and make up reasons for why the market is moving during the day. We are market participants. We are the 99.99% of people in the world who are just here to try and make a profit. We don’t have to put together a pitch, or a sexy headline, or ask our boss for permission to do things. We just want to make a buck when the market moves. That’s it.
So while all those people out there pretending to be mother goose are making up stories about the fed and inflation and all sorts of noise, we prefer to focus on price, which is literally the only thing that will ever pay anyone in this business. Today we are looking at the chart that has suggested since June that selling Treasury Bonds was the right move, and therefore interest rates would rise. [Read more…]
[Chart Of The Week] Are U.S. Treasury Bonds A Short Up Here?
U.S. Treasury Bonds have been in a beautiful uptrend for 35 years. This is nothing new. But within uptrends, we often see severe corrections that have presented very favorable risk vs reward opportunities in the past. I think today is one of those scenarios. Here are the details: [Read more…]
Audio: Benzinga Morning Radio Show 5-12-16
Every 2 weeks I sit down with the good folks at Benzinga to chat about the markets on their morning radio show. Today we went over why we want to be shorting stocks. We also talk about what this rally in Japanese Yen means to the U.S. and Japanese Stock Market. With this Yen strength combined with the deterioration in market breadth over the past 6 weeks, there is a lot more to be negative about than positive. Apple is a favorite short of ours and most of the U.S. and European Banks. In fact, it’s hard to find a stock out there that isn’t a short.
Here is the full interview:
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- What Is The Bullish Case For U.S. Stocks
- Why I Am Still Leaning Towards The Bearish Side For Stocks
- My Favorite Short In U.S. Stocks
- Why We Want To Be Long Volatility
- What The Relative Strength In U.S. Banks Means To Me?
- Why Commodities Have Been The Best Place In The World
- What If The U.S. Dollar Rallies?
- What Do We Make Of The Historic Extreme Bullish Sentiment In Bonds?
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- What Do We Do With The U.S. Indexes Now? S&P500, DJIA, etc
- The Best Trade In Precious Metals: Gold & Silver
- About That Squeeze Higher in Chinese Stocks
- My Favorite Energy Trade Today
- What Are We Going To Do About This Messy Bond Market?
- The Best Tech Stocks: Apple, Microsoft, Google or Facebook?
- What Does The Weight-Of-The-Evidence Suggest About Risk-Appetite?
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