Good morning(Especially you Doc, haven't spoken in awhile...🙂)...
Haven't held any positions since we covered the morning of the 13th of October. Considering the shenanigans of "a dozen or so" DJI stocks going into the election...haven't seen any reason to comment...until now.
As of the close...I'm in. All in.
I'll pass back through as we touch 3250.
Best,
TCG
oh...and...
Be careful in the metals. The bounce/retest has been solid...I didn't expect the ^HUI to get back over 225/235. I'm actually impressed, but they're rolling over here. Although, nothing is confirmed until the GLD is back below 160. UUP will turn, but a new high? I doubt it. A retest is probably not too much to ask though. I expect just above 30 "just as long as the key at 27 holds". I'm pretty sure it will. 27.17 should be max pain, but it looks like it's bottoming right here. There is solid support at the BTTB(Back to the Breakout) area here at 27.44. Wait and see I suppose...
I've looked over my long term forecasts. I've made zero changes. SPX 224(x) to 225(x) will be touched. GLD...I'll comment at 130.
I've also looked over my charts. 2008 is the still the dominant pattern. In the short term...as far as I'm concerned, you are on the road to a "Lehman" style event.
There are always mitigating factors. The last 3 debt ceiling kabuki theaters were under the QE regime. This one is under QT. As you pointed out, the Fed will need an aggressive response when the ceiling is lifted. I would not rule out a temporary program to absorb the new issuance. It will be a form of temporary QE, but the Fed will call it something else.
They are monsters.
I've been reporting on market effects of debt ceiling impasses since the first big one in 2011. I never had any doubt that if Treasury supply was restricted that that would be bullish, if not for both asset classes, at least for one of them. And that when news of a settlement hit the papers, that would be a qunitessential sell the news moment.
Not that anyone cares about what I am trading but there were several differing opinions on my purchases of TSLA for a possible dead cat bounce over the last month. Just wanted to give a quick update on the trade.
With the gap filled on the SPX and the follow-thru over 4,000 looking weak to me...
As of today, have sold 80% of my TSLA longs for a net $11.25/share profit. Looking to sell final 20% at $135, max pain on monthly expiring options. Stop loss moved up to $125, will close position, if not already closed, prior to earnings report next week. (Report will be a stock mover, I just am not sure which way.)
Sorry for boring you with the details, WTF.
SP500 on the weekly chart the equivalent of the Golden Cross, is a crossover between the 10 week and 40 week MAs which already occurred this week. Going back to the 2009 low, every time that happened confirmed the start of a new bull market or a new leg up in a bull market.
Gold continues to grind higher towards 1965-1999. 24 weeks have passed since the last weekly cycle high. This is a bullish cycle like we last had in 2019-2020 so just like then it may go higher for another 3-4 weeks. A weekly close below 1911 would indicate a bearish reversal.
SAP posted more or less catastrophic numbers this morning, far worse than expected. Stock down 2%, that ain't that much.
It seems that we are absolutely awash in liquidity, cause when bad news is ignored that was always a sign that there is plenty of liqui out there.
The FED has it now all in its hands: If they don't speak and act ultra-hawkish on Feb 1 than this whole thing will explode to the upside. God forbid that they give hints that they could redurce pace of balance sheet reduction or so. In that case we would hit 5000 by early June.
Market doesn't believe in a deep recession. This whole seems and feels to be artificial, it is anchored. So market says: "If it is artificial, than it can be rolded back easily." Bears say: It gets out of hand and FED will lose control at a certain point. That is the battle which is going on.
Removing overnight RRPs from liquidity is an economists wet fart.
They have almost (but not quite) reproduced my PONTs chart, but added a stupidity wrinkle.
Decent liquidity is helping stocks, despite the Fed’s efforts to take the liquidity tide back out to sea. The orange line below explains the market’s zigs and zags almost perfectly. QT is being offset by market liquidity and bank reserves, which is keeping stocks afloat.
$Gold - The duration from the last weekly cycle high has reached 23 weeks which is the longest in the last 3 years. In 2019 there have been 27-28 week cycles so it's possible the rally will continue for another 4-5 weeks. A close below 1896 will confirm a bearish reversal
"We are in the trickiest part of the investment cycle: tightening ending but easing far from beginning, inflation over but recession not yet begun, China reopen vs US recession…little wonder Wall St narratives (are) changing quicker than a TikTok video"
FWIW, the listings for a couple of pot farms I was observing have been pulled from market.
I imagine, perhaps, that we are in the "go/no-go" window for cultivating a 2023 harvest... and owners of those listings have committed to "go."
WHEN NARRATIVES DIE
Reading great book "Narrative Economics" by Robert Shiller.
Crypto is a dying narrative.....
As all the dumb money gets drained away.....
So onto the next false narrative.......
Onto the next "magic box that will make you rich but you can never open it or the magic will disappear"
(hmmm this sounds like a good Hans Anderson story !!!}
Not correct.
I covered it day to day as it was happening.
They hit the debt ceiling in May and sharply cut net new debt issuance in June as they paid down T-bills and reduced intragovernmental debt.
They RAN OUT OF CASH AT THE END OF JULY. The market knew there was no cash and began selling to raise cash to buy the expected new issuance a few days before the deal was signed. That deal was floated in late July. It was passed on August 2, but known a few days before.
Net issuance July 5- Aug 4 22 billion. The reason it was that low was because they paid down $70 billion in T-bills.
The S&P rose 6% from June 24 to July 20.
Debt ceiling lifted August 2, but the deal was taking shape about a week before.
Net issuance August 5- September 5. $164 billion. The stock market selloff began on July 27 when it became clear that a deal would get done. It made a double bottom on August 19. The collapse was coincident with the LIFTING of the debt ceiling, NOT the IMPOSITION of the debt ceiling. Stocks sold off because dealers and had to raise the cash to buy the new issuance. At the same time, the Fed paused QE at the end of June. That's what caused the selloff, not hitting the debt ceiling.
"Very Bullish Market Signal📈 - For week leading into AAII Sentiment Survey - S&P 500 returned 4.6% - Yet Bull-Bear Spread still -15.9% - So still no belief in this rally - Such a move with equally poor sentiment has happened 5 other times since '87 "
so we rally till june?
Yellen warns of U.S. default risk by early June, urges debt limit hike https://www.reuters.com/markets/us/yellen-urges-us-congress-act-quickly-debt-limit-2023-01-13/
this would be perfect fuck of every economist since every outlook of more than 40 banks that i read talked about worse h1 and great h2 of 2023
I don't think this is back to bubble phase.
Nasdaq is dead, look at Ark etf.
I think that market was pricing end of the world scenario like new GFC. Right now market is just repricing to soft landing. its not pumping Bitcoin to 80k. its just wave.
the key question is will Fed lower the rates this year as market is forcasting? if not then we could have a problem but its the problem of H2 2023. Which is funny becasue in fall 2022 everyone was sayin that h1 2023 will be bad but h2 2023 will be great
Yes. That's the case when CB's do not add liqui again into the system.
The catapult moves form March 2003 and March 2009 and espacially late March 2020 happen when the CB's inject new liquidity.
So:
1. Pivot --> stocks so la la
2. Cut --> stocks tumble because fearing recession (thats why CB cut)
3. Liqui injection because of recession --> stocks rise. Fast.
ive seen a chart that presented the view that fed pivot is v. bearish for stocks and many selloffs happens after they lower the funds rate, and we are still before that.
I should add that while doing it "my way," my goal is always to help others through the lens of what I see. I know that there are some others in this business who feel the same way, but my sense is that we are in the minority.
Some of these may repeat what I've previously posted here, but I have something like 2 dozen Redfin tabs open (not all about farms), and actually should restart my computer every month or something... so I am clearing books at the beginning of the year.
https://www.redfin.com/CA/Douglas-City/1750-Indian-Creek-Rd-96024/home/62172443
https://www.redfin.com/CA/Bridgeville/39883-CA-36-95526/home/115732307
https://www.redfin.com/CA/Willow-Creek/78acre-Creeks-Rd-95573/home/183365123
https://www.redfin.com/CA/Hopland/12940-Adobe-Creek-Rd-95449/home/120112821
https://www.redfin.com/CA/Yorkville/32301-California-128-95494/home/179222169
https://www.redfin.com/CA/Lewiston/51-Twin-Oaks-Rd-96052/home/124394498
https://www.redfin.com/CA/Lewiston/231-Dead-Mule-Gulch-Rd-96052/home/124405806
https://www.redfin.com/CA/Hayfork/341-Buck-96041/home/183488014
https://www.redfin.com/CA/Myers-Flat/0-Dyerville-Loop-Rd-95554/home/183488000
https://www.redfin.com/CA/Hayfork/200-Quail-VLY-96041/home/183578280
https://www.redfin.com/CA/Hayfork/430-Trinity-Pines-Dr-96041/home/124383068
https://www.redfin.com/CA/Hayfork/2220-Post-Mountain-Rd-96041/home/124468608
https://www.redfin.com/CA/Hayfork/8021-Rattlesnake-Rd-96041/home/124440038
It's an economic fiasco to my eye - pretty sure all of these above were listed - or enjoyed a price cut - in the last 14 days. These properties were typically acquired in a different rate environment with a different set of return assumptions. Today, financing a property is far more costly at a moment when the returns to production have collapsed, and federal regulatory relief is off the table.
2023 will only bring more.
Do you dream of being a serious pot farmer?
I mean... serious?
Not some piker with a trailer up a forest road with 100 plants planned for the season....
Not even some piker with your permits and mixed-light greenhouse yielding 250 plants per season....
I. Mean.
SERIOUS!
Originally sold for a whopping $3.04m in April 2021, serial price drops now have an asking of $2.165m
Priced to eat almost $1 million on a holding period of 22 months or whatever. Wow. Perhaps telling that the
"pitch" entertains switching production out of cannabis. Symptomatic of the situation.
There are more & more & more properties I don't bother to list.
But this one is "different-industrial":
https://www.redfin.com/CA/Rio-Dell/955-Dinsmore-Ranch-Rd-95562/home/179237922
Flood... fire-sales... one imagines next, jingle-mail.....
THE FEDIVERSE VS THE METAVERSE
Who wants or needs to inhabit the metaverse when the FED created a financial fantasy world out of the real world....the Fediverse.
If META chucked the metaverse the stock would probably double.
The current lack of printing is simply a welcome return to reality.
Printing is belief....fantasy.
The ominus spending bill not good for stocks and bonds....crowding out effect.
2022........THE YEAR OF CRAZY
We saw a lot of craziness in 2022
1/ People thinking bonds were a good investment after the FED had inflated a large portion of thier real value away....
2/ Someone paying $44 Billion for chatter.....just plain crazy.....
3/ Anyone thinking Tesla was a good investment.....
4/ Face book changing its name to Meta......and spending a vast amount on something people really don't want.....
5/ Anyone sending ther money to the Bahamas to buy crypto....just plain crazy.....
6/ Anyone who thought SPACs were still a good investment......
Yes it was the year of crazy.....
