I don't normally distribute viral emails, videos or anything to do with "trying to make the world a better place" ideas.
But someone just sent me this a while back, and I couldn't help being moved by it. In our world of material possessions we sometimes lack the time or the motivation to reflect on humanity's worst and remind ourselves that we have to be bigger than our predecessors.
Kseniya Simonova won Ukraine's Got Talent 2009 overwhelmingly with her epic potrayal of the German invasion of Ukraine. Watching this actually made me reflect on my past and strengthened my resolve to better myself in the future.
Her other exploits, equally moving and poignant, can be found here and here.
Nothing to do with the markets.....but it puts things in perspective.
Counter
Saturday, October 31, 2009
Smisherooney.
Thought I might just put something out there other than whooping victory cheers and ultra bearish chants.
This is an interesting point, and its probably nothing but you quant guys and number crunching geniuses can probably make something out of it.
Very rare is the SPX down more than 1% on a Friday, even in death and destruction times. I can't recall the last period where we had 2 Fridays in a row when the SPX dropped in excess of 2%.
It's a general view, ceteris paribus, that Friday's are usually flat or up days, rarely down. Now let me clarify by saying when I say flat, i meant under 1%. It's rare that a Friday trading session results in a more than 1% smish.
We've had two Fridays now....cue music.
Another point I would like to make.
Back earlier this year, the ENTIRE planet was short the market at 900 SPX, looking for the head and shoulders neckline destruction and death past 870. On one Monday afternoon, the futures did it, breached the 870 and Asian markets got absolutely destroyed, only for the Dow and the SPX to stage a monstrous rally that has pretty much lasted uninterrupted till two weeks ago.
This time round, the ENTIRE world took risk off the table, and some may have gone short (although I suspect less this time round) on the back of Goldman Sach's 2.7% call on GDP. AT 3.5% everyone breathed a sigh of relief, and the shorts had to cover which is fine.....but everyone's already long. No follow through buying means ...... death.
There isn't another wave of buying to push the short sellers to cover higher, not like it was back at 900.
Where is the market going to go? Who knows. Could be 1100 by Dec 31. Could be 900.
Maximum pain indicates the market should revisit 900 by Dec 31. That would destroy anyone's half year performance if they bought and held. But there is too much money vested in the performances of funds for that to happen, so I think maybe a revisit of just under 1000 may suffice.
Unless, my thoughts and opinions on this market suddenly become gospel worldwide, and the likes of Roubini and Faber and Soros and Rosenberg become the norm instead of the selected few....it could be an ugly first quarter.
Let's not kid ourselves here. The US is in the sin bin. The dollar is destroyed. More than HALF the GDP growth is due to government stimulus on cars. A quarter was oil prices. Real GDP growth is probably under 1%. Unemployment is monstrously high. 1 in 10 Americans are out of work. 1 in 9 are out of work in Europe.
Yes, I know everyone says "so what? The other 9 are still working and paying taxes and consuming goods"
Maybe I'm just paranoid, and maybe I've been scarred too badly in 08 to think bullish ever again, but I honestly cannot believe the recovery story. It just is simply too soon. Excess liquidity be damnned, the banks are still in a new paradigm with regards to financing. It can't be that much money around if banks still require 90% pre sales before development funding goes through.
And don't forget, the commercial real estate refinancing bubble hasn't popped yet, along with credit cards (which I might add is another potential given the jobless situation and many people dipping into credit cards for living expenses). Plus the next batch of refinances for mortgages when interest rates finally rise. And the US dollar basket being the monster carry trade. Remember what happened when the yen carry trade reversed and everyone wanted out at the same time?
So yes, interesting times ahead. I'm still short, but a little bit more aggressive this time after yesterday's price action. I think November is going to be an ugly month, where people recharge their guns for a December monster book marking year end ramp.
This is an interesting point, and its probably nothing but you quant guys and number crunching geniuses can probably make something out of it.
Very rare is the SPX down more than 1% on a Friday, even in death and destruction times. I can't recall the last period where we had 2 Fridays in a row when the SPX dropped in excess of 2%.
It's a general view, ceteris paribus, that Friday's are usually flat or up days, rarely down. Now let me clarify by saying when I say flat, i meant under 1%. It's rare that a Friday trading session results in a more than 1% smish.
We've had two Fridays now....cue music.
Another point I would like to make.
Back earlier this year, the ENTIRE planet was short the market at 900 SPX, looking for the head and shoulders neckline destruction and death past 870. On one Monday afternoon, the futures did it, breached the 870 and Asian markets got absolutely destroyed, only for the Dow and the SPX to stage a monstrous rally that has pretty much lasted uninterrupted till two weeks ago.
This time round, the ENTIRE world took risk off the table, and some may have gone short (although I suspect less this time round) on the back of Goldman Sach's 2.7% call on GDP. AT 3.5% everyone breathed a sigh of relief, and the shorts had to cover which is fine.....but everyone's already long. No follow through buying means ...... death.
There isn't another wave of buying to push the short sellers to cover higher, not like it was back at 900.
Where is the market going to go? Who knows. Could be 1100 by Dec 31. Could be 900.
Maximum pain indicates the market should revisit 900 by Dec 31. That would destroy anyone's half year performance if they bought and held. But there is too much money vested in the performances of funds for that to happen, so I think maybe a revisit of just under 1000 may suffice.
Unless, my thoughts and opinions on this market suddenly become gospel worldwide, and the likes of Roubini and Faber and Soros and Rosenberg become the norm instead of the selected few....it could be an ugly first quarter.
Let's not kid ourselves here. The US is in the sin bin. The dollar is destroyed. More than HALF the GDP growth is due to government stimulus on cars. A quarter was oil prices. Real GDP growth is probably under 1%. Unemployment is monstrously high. 1 in 10 Americans are out of work. 1 in 9 are out of work in Europe.
Yes, I know everyone says "so what? The other 9 are still working and paying taxes and consuming goods"
Maybe I'm just paranoid, and maybe I've been scarred too badly in 08 to think bullish ever again, but I honestly cannot believe the recovery story. It just is simply too soon. Excess liquidity be damnned, the banks are still in a new paradigm with regards to financing. It can't be that much money around if banks still require 90% pre sales before development funding goes through.
And don't forget, the commercial real estate refinancing bubble hasn't popped yet, along with credit cards (which I might add is another potential given the jobless situation and many people dipping into credit cards for living expenses). Plus the next batch of refinances for mortgages when interest rates finally rise. And the US dollar basket being the monster carry trade. Remember what happened when the yen carry trade reversed and everyone wanted out at the same time?
So yes, interesting times ahead. I'm still short, but a little bit more aggressive this time after yesterday's price action. I think November is going to be an ugly month, where people recharge their guns for a December monster book marking year end ramp.
Thursday, October 15, 2009
Time for the rally monkey
Dow 10000.
Unbelievable.
Rumours now of Goldman Squid posting a profit north of 6.00, versus consensus estimates of mid 4.00s. Of course, no one would be really surprised, and you would have to ask, if it did come in above and strong at 6.00 plus, where would we see the Dow? 11000?
3:17am: 9999.61
Unbelievable.
Rumours now of Goldman Squid posting a profit north of 6.00, versus consensus estimates of mid 4.00s. Of course, no one would be really surprised, and you would have to ask, if it did come in above and strong at 6.00 plus, where would we see the Dow? 11000?
3:17am: 9999.61
Friday, October 9, 2009
Red October - destroyed by RBA 0.25 missle.
So it seems.
In concert, all news sources and media houses are running with a global risk renewal, sending equities higher, due to the RBA raising interest rates in Australia.
A prominent bank even came out to say that the best way to play this market is to buy the resources and banks (i.e. the ASX 200) and fund it by selling telcos (i.e. Vodafone and Telstra).
So, in other words....ladies and gents, as you were 18 months ago, except for one major difference, sell the USD instead of the yen for your carry trade.
Unbelievable. The market has truly gobsmacked me. I must admit, I feel like an absolute novice, that the past 12/13 years meant nothing. This is truly a humbling experience to see it defy gravity and go on such a rollercoaster ride.
Literally 6 months ago, you could smell death in the markets. People were in the pits of despair. It was not hard to see a massive bounce then, people were so negative. What happened after was the problem. 30% bounce from the lows in the span of a bit over a week was stellar. The 10% that followed immediately after that surge (with a two day break) caught out most people. The subsequent straight line upsmish that has taken it from 700 to 950 destroyed a fair few shorts.
The head and shoulders trade that had the entire world short that Monday down to 870 on the SPX, looking for a break reversed with such ferocity, matching the speed of the March bounce. It was 870 on Monday, and ended at 935 on Friday. The following week it broke 950 highs, and 1000 the week after.
This of course, was after Meredith Whitney called the banks a buy and Goldman Squid raised their SPX target to 1060.
Well its now 1069, with a recent high of 1083. And the Australian dollar of course, is the king of the risk currencies. It was 60 cents to the USD in the March low. Trading close to 91 cents tonight, it has had a 50% appreciation versus the standard currency.
I think we will look back at this year as the year where the investment community confused itself with what was right and wrong. Everyone over levered going into the GFC and I suspect looking back now, the damage was completed at the end of 08. Stabilisation should have begun somewhat in the early parts of 08, and it did for a month. The final smish that came end of Feb was not capitulation selling, as some people called it. Rather, I suspect it was just a big concerted short, in a desperate attempt to salvage some semblance of profitability for the quarter.
Hedge funds, experiencing massive drawdowns, outflows and underperformance, attacked the market with force hoping to break it quick and fast. Only one problem. The whole world was doing the same thing. I sincerely doubt many got out near the lows. That was probably what caused such a sharp and sustainable rally. As late as August, there would be still some residual shorts left from April period, as funds readjusted their bias to buying on dips, instead of selling rallies.
Traders who had been burnt in 08, had to quickly adjust their mentality. Looking for the 10% falls became a pipe dream for many (myself included). I have a standing bet with someone when BLT.l was trading at 10 pounds that it would see sub 8.50 by year end. It's now at 17 pounds, and scorching higher.
So where to from here? Well, the market tends to do the most ridiculous things and now I think I've seen it all, except for the remote, but possible target of 07 highs, by year end.
You laugh, but all it takes now is some ridiculous rampage and we're there. I mean its really only 30% of the SPX now. 300 points at the rate of 10 points every 2 trading days is only 2 months.
Okay that seems a bit far fetched, but I think I was right earlier about funds having to participate due to the close proximity of year end. The funds that are underweighted and left behind have got no choice but to do one of two things:
In concert, all news sources and media houses are running with a global risk renewal, sending equities higher, due to the RBA raising interest rates in Australia.
A prominent bank even came out to say that the best way to play this market is to buy the resources and banks (i.e. the ASX 200) and fund it by selling telcos (i.e. Vodafone and Telstra).
So, in other words....ladies and gents, as you were 18 months ago, except for one major difference, sell the USD instead of the yen for your carry trade.
Unbelievable. The market has truly gobsmacked me. I must admit, I feel like an absolute novice, that the past 12/13 years meant nothing. This is truly a humbling experience to see it defy gravity and go on such a rollercoaster ride.
Literally 6 months ago, you could smell death in the markets. People were in the pits of despair. It was not hard to see a massive bounce then, people were so negative. What happened after was the problem. 30% bounce from the lows in the span of a bit over a week was stellar. The 10% that followed immediately after that surge (with a two day break) caught out most people. The subsequent straight line upsmish that has taken it from 700 to 950 destroyed a fair few shorts.
The head and shoulders trade that had the entire world short that Monday down to 870 on the SPX, looking for a break reversed with such ferocity, matching the speed of the March bounce. It was 870 on Monday, and ended at 935 on Friday. The following week it broke 950 highs, and 1000 the week after.
This of course, was after Meredith Whitney called the banks a buy and Goldman Squid raised their SPX target to 1060.
Well its now 1069, with a recent high of 1083. And the Australian dollar of course, is the king of the risk currencies. It was 60 cents to the USD in the March low. Trading close to 91 cents tonight, it has had a 50% appreciation versus the standard currency.
I think we will look back at this year as the year where the investment community confused itself with what was right and wrong. Everyone over levered going into the GFC and I suspect looking back now, the damage was completed at the end of 08. Stabilisation should have begun somewhat in the early parts of 08, and it did for a month. The final smish that came end of Feb was not capitulation selling, as some people called it. Rather, I suspect it was just a big concerted short, in a desperate attempt to salvage some semblance of profitability for the quarter.
Hedge funds, experiencing massive drawdowns, outflows and underperformance, attacked the market with force hoping to break it quick and fast. Only one problem. The whole world was doing the same thing. I sincerely doubt many got out near the lows. That was probably what caused such a sharp and sustainable rally. As late as August, there would be still some residual shorts left from April period, as funds readjusted their bias to buying on dips, instead of selling rallies.
Traders who had been burnt in 08, had to quickly adjust their mentality. Looking for the 10% falls became a pipe dream for many (myself included). I have a standing bet with someone when BLT.l was trading at 10 pounds that it would see sub 8.50 by year end. It's now at 17 pounds, and scorching higher.
So where to from here? Well, the market tends to do the most ridiculous things and now I think I've seen it all, except for the remote, but possible target of 07 highs, by year end.
You laugh, but all it takes now is some ridiculous rampage and we're there. I mean its really only 30% of the SPX now. 300 points at the rate of 10 points every 2 trading days is only 2 months.
Okay that seems a bit far fetched, but I think I was right earlier about funds having to participate due to the close proximity of year end. The funds that are underweighted and left behind have got no choice but to do one of two things:
- Take a massive short bet, and hope the market collapses by Christmas
- Go long with the market, and try to achieve some form of acceptable standard deviation versus the benchmarks.
Friday, October 2, 2009
Hunt for a Red October?
So I managed to pick the turn. Again. My last post was eeriely capitulative, on second reading, and sure enough marks the top of the market...Tuesday.
Since the last post, the market has slid somewhat spectacularly. Sustained tonk. None of the wishy washy stuff. Admittedly, econorama hasn't been flash, but since when has the market been focused on the economy anyway?
Half of Asia is on holidays this week. Volumes are skittish, and if this market is going to sell off during the period where China and Hong Kong have holidays, expect more volatility as sell orders hit markets with less bids.
Now today is Friday, and to quote a mate of mine, "the Dow is never down much on Fridays". This axiom might be a good catalyst to cover some shorts. I covered my SPX short at 1030, the one I have been riding valiantly since 1060 all the way up to 1075 and back down again. I covered my some XJO shorts too, but wish I had kept my AUD/USD pair short. I piked virtually near the high at 88.40, only to see it careen back down to 86.90 24 hours later. Currencies are hard......
Anyway where to from here?
A few points to note:
Since the last post, the market has slid somewhat spectacularly. Sustained tonk. None of the wishy washy stuff. Admittedly, econorama hasn't been flash, but since when has the market been focused on the economy anyway?
Half of Asia is on holidays this week. Volumes are skittish, and if this market is going to sell off during the period where China and Hong Kong have holidays, expect more volatility as sell orders hit markets with less bids.
Now today is Friday, and to quote a mate of mine, "the Dow is never down much on Fridays". This axiom might be a good catalyst to cover some shorts. I covered my SPX short at 1030, the one I have been riding valiantly since 1060 all the way up to 1075 and back down again. I covered my some XJO shorts too, but wish I had kept my AUD/USD pair short. I piked virtually near the high at 88.40, only to see it careen back down to 86.90 24 hours later. Currencies are hard......
Anyway where to from here?
A few points to note:
- Ken Lewis resigned. Why? The board was actually caught out by this. What does Ken know?
- Baltic Dry Index looks horrible, does it lead the market?
- China on holidays for a week....weaker commodities must follow suit surely for the weak?
- I'm no longer short. Waiting for a rebound, which now ironically may never eventuate.
Have fun ladies and gents. By the way, if anyone has any suggestions on how to improve the site, please mail me. I haven't had much time to blog, but would like to keep the site going somehow.
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