Permabear Doomster

Friday, 15 November 2019

Historic highs into the weekend

US equity indexes closed moderately higher, sp +23pts (0.8%) at 3120. Nasdaq comp' +0.7%. Dow +0.8%. The Transports settled +0.05%.

sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, and it was enough to generate new historic highs in the SPX, Dow, and Nasdaq comp'.

The US President appeared at 10.17am EST...

With a follow up...

.. and Peter Schiff making a guest appearance. It remains something of a travasty how one of the few to see the 2008 collapse coming, remains largely blacklisted by the mainstream media. Further, Trump continues to periodically tout Charles Payne, whose key stock pick for 2008 was Washington Mutual.

The afternoon saw another wave higher to sp'3120 into the OPEX settlement. Volatility remained subdued, the VIX settling -7.7% at 12.05.
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Goodnight from London
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Thursday, 14 November 2019

Broadly headed

US equity indexes closed a little mixed, sp +2pts (0.1%) at 3094. Nasdaq comp' -0.04%. The Transports settled +0.3%. Near term outlook will lean to OPEX chop into the weekend.

sp'daily5

VIX'daily3

Summary

Once more, the day began in pre-market with a market message from the US president..

US equities opened in minor chop mode, with Trump continuing...

... even taking a (rather amusing) little swipe at Powell.

Price action took a swing lower in late morning. The afternoon saw further chop, leaning fractionally higher in the late afternoon. Volatility picked up just a little, with the VIX settling +0.4% at 13.05.

Broadly headed

You recognise where we are broadly headed, right? The path ahead - within the twilight zone, is a dark and cloudy one, filled with a great many surprises. Some good..... most.. arguably not.

Another flying monster, departing the capital of geo-political chaos

Along with a fair few others recently, yours truly has been wondering what financial institutions have been getting the Fed's REPO money/support? Powell (ironic name) of the Gold Anti-Trust Committee (GATA) requested the Federal Reserve Bank of New York to reveal the details. The response was not surprising...

The NY branch of Print Central said we won't find out what institutions have been making use of the REPO for around two years. By late 2021, the very institution/s currently in distress, might already have gone under. Deutsche Bank is the obvious prime candidate, but almost all of the UK/EU financials are on life support, as the NIRP policy of the ECB is ironically destroying the very institutions they were tasked to protect.

Regardless of Friday, and the remainder of the year, the broader path that we're headed remains pretty clear. The Fed will continue to print, lower rates, and keep its secrets. We'll also see ever more stronger capital market quakes.

The US President will likely become ever more tied to every little intraday (even overnight futures) equity swing. Right now, I can't see who will win the 2020 election, but whomever 'wins', they face monstrous fiscal problems. But hey, why worry, when the fed will buy whatever amount of bonds are issued?

On the plus side... its all very entertaining, not least the ongoing sideshow of Leon Cooperman and Democrat contender... Elizabeth Warren.
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Headed eastward

A moment of serenity

A brief glimpse... between the clouds

Wednesday, 13 November 2019

Rate cut four?

US equity indexes closed rather mixed, sp +2pts (0.1%) at 3094. Nasdaq comp' -0.1%. Dow +0.3%. The Transports settled -1.1%.

sp'daily5

VIX'daily3

Summary

US equities opened moderately weak. The release of Powell's prepared remarks saw equities claw back upward to fractional gains.

Powell appeared at 11am...

... and carefully danced the fine line, trying not to upset the capital markets. As for the 'new normal', normal within the twilight zone remains the stuff of nightmares, but most have lost sight of what once would have been deemed so.

The afternoon saw a swing lower on a spooky trade related headline. For now, there is no real sign that phase'1 will be signed off before year end. For now, the market remains largely in denial, not that any of it (on a $ basis) matters to the broader economy anyway.

Rate cut four?

In recent days I've been increasingly dubious about a fourth rate cut.

The mainstream certainly aren't expecting one. Even if we see a full retrace to tag all the downside gaps to sp'2911/2893, I no longer expect a Dec'11th rate cut.

Implications: no rate cut will lean bearish the precious metals and related miners. It will lean bullish equities, especially the financials.

To be clear though, another 1-2 rate cuts can be expected in 2020, along with further QE. In addition to ongoing T-bill and monstrous overnight REPO funding, I'd expect T-bond buying to commence before the Nov'2020 election.
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