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Lack of traders means less liquidity, so perhaps weird volatility?
CCJ uranium supply/demand has potential for LT bull mkt, especially if "they" decide it qualifies as a green/no carbon energy source. LT cci and MACD histogram suggest a bottom, but suggest is about as far as I can go. With proper setup, I will take a shot...
As in target areas?
USD (2× semis etf) sell short 45.70 and 46.70 with stop 50.73. Good all week.
In my house, the wife is a majority of one.
I knew that you were referring to him and his pnf charts. But what I wanted to know is specifically what info you want that Sam provided, and that you are not receiving now.
We can not replace him, but perhaps his info can be replaced
The FLD216 (point at which the h as halfwave slope turns negative) is 2926 today, and 2935-2940 early next week. Violation of those levels would generate swing obj from highs thru that point, so nominally 100pt lower, or 2860 if early next week. But somewhere down there is the target. 10/30 min pnf obj are 2870 area...
The 4.5day/9day highs recently occurred, with 9day lows due Tues. Then next 9day about 10/17 in nest including LT weekly lows for 21week and 43week due approx then. IMHO, this is just starting. Probably no lower than 2825 tho, or the abyss opens up...
Now it starts. Last at 2964
SPX SWAG method expecting 2920 early next week. Pnf, 30min and 60min, both hv objs 2870 area. Slope of ma108 will shift negative below 2925 Fri, and moving up next week. Obj from that would likely be 2850 or less.
Holding shorts 4x2994.5 with stop moved to 3013.
Explain further, please.
There is risk in both choices: to play, or not play. Perhaps tight trendfollowing to get in on downturn, out if wrong, back in when finally right. Paul Tudor Jones was infamously wrong 10 or more times on breakouts in a row before he killed a particular mkt. The risk to avoid is totally missing the trend.
Hope all is well.
Mid Oct is common target for cycle enthusiasts. Charts from SentientTrader are posted on twitter occasionally by David F, showing nesting of cycles of various lengths. My own simple calcs give 21 and 43week lows due weeks of 10/15 and 10/22, with 36day low due 10/19. Nesting give power both directions to the move, declining and recovery.
SPX added short 1x2986.5 with stop 3013. Continue order to short 1/2 unit 2994.
Holding short 3x2997.2 with stop 3032.
SPX added 1/2 unit short 2984. I'll add 1/2 units also at 2989 and 2994 with stops on these at 3013.
So, I'm short 3x2997.2 and getting shorter. Target is low Oct 17 or thereabouts.
The arguments re debt, economy, consumer spending, etc ignore a fundamental fact. Valuations are at/near historic highs. This alone does not forecast a decline. But "mean reversion" will bite us bigtime and start with a meaningless cause...a tweet, an odd foreign story, a fat finger error.
Germany is going into recession, which will probably lead to a banking crisis. The last one hit globally as credit mkts froze. We already have repos running amok to finance bloated inventories of bonds. A banking crisis leading to a global recession will result in less foreign surplus to invest in our bonds, and we will have a shortfall in govt funding worse than we have now. More bond sales with fewer buyers and larger unsold inventory. FED will have to expand the balance sheet again to monetize the debt, and the house of cards gets shakier.
Cyclically, major low is in 2022. How far down is anyone's guess. If Fed cant keep it above 2800, the pnf crowd will be ranting for 1500, which is not even neutral for valuations. When the "mean reversion" comes it will be devastating, and life-altering as all the things we need to sell just pile up in the corner.
$SPX a small (short) cycle is 4.5days, and next nominal high would be Friday. Avg amplitude is 27pts and rally to 2980-2997 would be normal. May add to shorts Thur/Fri...
Holding shorts 3x2997.2, stops 3032
SPX scheduled lows
$SPX the lows for 21 and 43week lows are due weeks of 10/15 or 10/22. The daily target for the 36day cycle is 10/19, or right in the middle. Nested lows create violent declines and recoveries. Trade well...
Amen
A friend called them demi-krauts. Brings up all sort of interesting connotations.
Obviously the 9day cycle has been overwhelmed. New pnf shorts (30min atr200) with obj 2870 area. Some experts expecting low in Oct near 2600. Personally, afraid of break below 2800 leading to "mean reversion" scenario, while pnf crowd will be screaming independently for 1500-1800.
Holding shorts.
The weakness in Germamy economy is causing some to forecast a banking crisis, followed by global recession. We are globally interconnected but expect to stay above the mess??? With valuations near historic ATH, this is not the time/place for big longs. Rather, shorts with long term bias are all that makes sense to me. The attempts to halt any decline are likely to propel hard assets upward, IMHO.
SPX the 18day cyclic low is due, and the next 18day period should take us to the 36day low. The 9day cycles within may imply that the next 3-5days will see a rally back towards 3015-3020 before the leg downward.
Holding shorts 3x2997.2 with stop 3032.
Ever stop to ask "why is this Necessary"?? BAML projects QE thru 2022. Thru the next 7yr cyclic low?? Stocks may not go down but they also probably dont outperform gold/silver and whatever other non-fiat currency is available.
$SPX what do we THINK we know? Big-wave of 52yrs exists, with assoc waves of 26/13/6.5/3.3 etc yrs down to 43/21.5/10 weeks etc. Now at 39/43 and 16/21 weeks, so 4-5 weeks downward to significant low.2 With nesting at lows, the 10week should be at/past peak and going downward. TL with slope of 11-18 day MA should be violated when 10week top occurs, which is in process if not completed. Sell rallies, have stops.
$SPX Holding shorts 3x2997.2 with stops 3032
$SPX added short on stop at 2988 after report. Holding short 3x2997.2, with stops 3032.
Bonds have similar cyclic pattern as equities, but sometimes noise in one makes them appear potentially different. High (low in rates) was at 21week peak, and weakness will probably continue for 2-3 weeks to low of 11week cycle. Such weakness should be coincident with similar weakness in SPX. SPX is scheduled for some lows in late Sept/earlyOct but more important lows are expected in late Oct.
Recently, raised stop to 2993 and was stopped. Then weighed bullish cyclic projections vs other TA including cci sells suggesting downswing into late Oct lows and went short. Holding 2x3001.9 with stops 3032, and will add on stop 2988. Obj unclear short term, Oct low perhaps 2825, perhaps much lower as pnf signals below 2800 are catastrophic.
Oddlot
Recently, raised stop to 2993 and was stopped. Then weighed bullish cyclic projections vs other TA including cci sells suggesting downswing into late Oct lows and went short. Holding 2x3001.9 with stops 3032, and will add on stop 2988. Obj unclear short term, Oct low perhaps 2825, perhaps much lower as pnf signals below 2800 are catastrophic.
Oddlot
ZeroHedge article re repo freezes...
Back in the summer of 2013, China's banking system was on the verge of collapse when its overnight repo rates briefly soared to the mid-20% range, prompting the central bank to take emergency intervention to avoid a funding freeze.
As of this morning, the US is halfway there.
After we reported yesterday that "something snapped" as chaos hit the report market, and the overnight repo rate exploded as high as 7% for a variety of reasons including:
elevated UST supply,
bloated dealer balance sheets and year-end regulatory constraints
a banking system near reserve scarcity,
investors selling bonds back to dealers, and
banks and money-market funds to make their quarterly tax payment.
... on Tuesday this paniced funding shortage has intensified to never before seen levels, as overnight repo has now hit 10% and shows no signs of slowing.
While specific prints are scarce as the bid/ask spread is a massive 2% at last check, Reuters has GC repo at 10%, while Bloomberg's own pricing sources show the key funding rate soaring by more than 600 basis points to 8.53%, based on ICAP pricing, after opening around 7%.
Putting this move in context, overnight GC repo has not only just had its biggest surge in history, but it is printing at the highest level in decades!
Not even the rates experts are stumped, with one STIR trader saying "nobody knows what is going on", and desks are simply watching what appears to be a relentless dollar funding squeeze as one or more entities are in desperate need for funding and will pay any price for it (even though it is neither month nor quarter end yet).
As a reminder, commenting on Monday's just as shocking move, BMO rates strategist Jon Hill said that "secured funding markets are clearly not functioning well,” adding that a jump like this, one which is not happening during the traditional quarter end window dressing period, is "bordering on chaos."
It is thus safe to say that secured funding markets are now officially broken.
Separately, Bloomberg points out that the Libor replacement rate, SOFR, or Secured Overnight Financing Rate, which is backed by overnight GC repo transactions, also jumped to 2.43% Monday from 2.20%, New York Fed data show. That’s the highest since July 31, and it is odd because it is taking place as the Fed already cut rates once and is expected to cut rates again tomorrow by at least 25bps.
Meanwhile, as we warned last Friday, the funding shortage has now spilled over into money markets, making dollar funding much more expensive, as any USD-based cross-currency swap spike. As Bloomberg notes, "demand for the dollar is showing up in swap rates from euros, pounds, yen and even Australia’s currency. As an example, the cost to borrow dollars for one week in FX markets while lending euros almost doubled."
Just like Monday, while there was no immediate catalyst, as we explained on Friday, the reason behind Monday's GC repo explosion is a combination of factors including the settlement of the mid-month Treasury coupon auctions that pushed collateral into the repo market, even as cash is leaving the funding space as corporations have withdrawn cash parked with banks and money-market funds to make their quarterly tax payment.
The funding shortage was made worse by an unexpected ill-timed event, because just as companies were withdrawing cash from money markets to pay corporate tax, a glut of new bonds appeared on the market as the U.S. government sold some $78 billion of 10- and 30-year debt last week. And with just $24 billion of bonds maturing in the period, this became one of three occasions this year when the imbalance between debt redemption and cash needed to buy new Treasuries exceeded $50 billion, according to Bloomberg.
While dealers all had their own unique justifications for the move, even if nobody knew just who the guilty party was, they were quick to offer some very important advice: please don't panic.
“This is certainly painful for firms that have to fund positions,” said Thomas Simons, an economist at Jefferies LLC. “So it’s difficult for the dealer community. But it’s not systemically threatening.”
We'll see about that, because the biggest reason for the creeping dollar shortage is that as discussed extensively previously, following the recent debt ceiling deal, the Treasury is aggressively pushing its cash balance higher while depleting the amount of bank reserves in the system.
“Repo pressure is almost entirely a settlement story with $54 billion of net supply in Treasury coupons landing on already very crowded dealer balance sheets,” wrote Blake Gwinn, head of front-end rates at NatWest Markets, adding that the tax deadline probably exacerbated the situation.
The drop-off in reserves and fund outflows is driving up funding rates and is starting to spill into the fed funds market because repo’s attractive yields can draw some lenders away from the unsecured market.
Which again brings us the $64 trillion question: as a reminder, on Friday we concluded by asking rhetorically, "how to determine if the dollar funding squeeze will cause another major risk off episode?" Here, BofA said that as the Fed starts to test these reserve lows, "we expect funding markets to react by showing further Treasury cheapening, widening of FRA-OIS, and narrowing of front-end spreads & SOFR-FF basis."
However, once the Fed responds by engaging in repo or outright UST purchase operations we expect these markets to move in the opposite direction. We suggest clients continue to trade these themes tactically and consider moving out of UST cheapening positions as fed funds rises towards the IOER +15 to +20 bps level.
We also said that "if the Fed wants to front-run the funding shortage, and aggressively inject liquidity into the system, nothing prevents it from following in the ECB's footsteps and hint at another round of QE in the near future: not only would that send stocks soaring in the asset bubble's "Icarus song", but it would also make Trump happy, if only until it all comes crashing down."
The problem for the Fed is that following today's massive move in repo higher, it now appears that the Fed is once again behind the curve, and this time the funding squeeze could have dire consequences for not only the economy but the market, as the broken repo plumbing means that despite $1.4 trillion in excess reserves, one or more banks are suddenly left without liquidity, which as we explained over a month ago in "Forget China, The Fed Has A Much Bigger Problem On Its Hands", the only alternative Powell may soon have is to restart QE.
Where are you re SPY or $SPX, if you dont mind? I was long, out yesterday and very conflicted, and short today with gritted teeth and stops over ATH.
IDK, but will hold until stopped.
$SPX now short 2x3001.9 with stop 3032.
Add 3005.8 if offered
SPX short 1 unit at 2998, with stop 3032. With cci and pnf signals, and 1min obv definitely in downtrend, here we start...
SPX out yesterday. All CCI's out to 216day/43week cycle have given sells, but mkt is paralyzed. Wizard of Oz must be frantic...
Raised stop on 1x 2973.8 to 2993. If hit, will reenter on reversal next week.
Imho, the huge global debt will be handled by global devaluation of currencies relative to a new standard. Or the old standard, gold. Fiat currencies will die and those who trust in them be severely damaged. Debt in old currencies will become the least of our problems...
Not to Rant, but this country has lost the moral fiber of the founders. Parenting used to include teaching, but now both parents work, and kids are being "taught" by childcare. No wonder we are in trouble...