Trading Trump

Donald Trump’s executive order on immigration from Muslim-majority countries has firmly put to rest any hope that he would back away from his more extreme campaign pledges in office. Until late last week, markets had been cheered by his conciliatory tone and sensible economic appointments. However, it should now be very clear that he fully intends to implement policies that will be incredibly divisive. Investors have been viewing Trump as a second coming of Reagan. They should remember his presidency may yet end up bearing much in common with Nixon’s – a period marked by widespread civil unrest and extreme animosity between the White House and press.

The question is does it matter for markets? No-one can say they didn’t see these immigration measures coming -- Trump spoke of them repeatedly during the campaign. And while the economic consequences of the measures themselves will be small, the controversy around them could well cause a wobble in markets – particularly US equities, which seem to have adopted the most rose-tinted view of Trump. 

With senior Republicans speaking out against the policy, the episode is a reminder that Trump’s relationship with the GOP has never been a solid one. If the new administration overplays its hand and the relationship deteriorates, there’s a risk that Trump’s program of infrastructure spending and tax cuts gets delayed or downsized. And a prolonged political upset could weigh on growth, as we saw with the debt ceiling shock of 2011. All those business surveys showing confidence at multi-year highs could quickly reverse if team Trump gets bogged down in the kind of gridlock that was supposed to have come to an end with the Republican clean sweep of 2016. That would cause quite a reversal in the Trump reflation trade.  

We’re not at that stage yet. The administration has quickly backtracked on the clumsier aspects of the executive order – for instance, excluding green card holders from the entry ban – as they try and smooth ruffled feathers. And Trump’s new friends in Washington are likely to give him a little more time before turning on him. Furthermore, given today's solid US economy, it looks for now as if the market response to political gridlock should be relatively contained. This is not 1969, when Nixon had to contend with the inflationary consequences of the 1960's boom. Nor is it 2011, when the growth backdrop was much weaker than it is today.

Still, Trump's badly-handled migrant entry ban shows how political missteps could sow doubts about the reflation narrative. That may or may not happen with this issue -- but it’s unlikely to be the last upset in the first hundred days of this inexperienced team. Markets are certainly vulnerable to such a shock. The major equity indices have been inching higher for weeks now and it feels like we could be heading for an "escalator up, elevator down" sell-off. Given the extremely depressed equity volatility of the last couple of months, even a garden variety 5% dip in the S&P would feel pretty vicious.
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Flowthrough
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January 30, 2017 at 3:04 PM ×

I think Trump's poor relationship with the rest of the GOP and how quick they are to break with him is a positive. They will not rubber stamp his bills and may even moderate his crazier executive orders. Corporate tax cuts likely sail through, deregulation sails through. Maybe best if everything else gets bogged down.

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Polemic
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January 30, 2017 at 3:13 PM ×

the way I look at it now is that the algo's would have had an absolute ball loading up on these massive trend runs. Momentum they love, VAR allowances increasing as vol falls, they must be up to the ying yangs of the trend. Back story is Trump blah blaah .. but .. once this turns it will be the algo puke that will carry it, having a nice 'he s an idiot' back story is cool to add but the real sellers will be models. and models don't do morals, they do momentum.

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m*
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January 30, 2017 at 3:56 PM ×

100% agree, and the momentum they are doing is in pmi's which bottomed in july/aug and are still moving up.

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washedup
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January 30, 2017 at 4:19 PM ×

"models don't do morals, they do momentum"…

And finally, just like that, a clear, cogent explanation for my lack of success with the opposite sex during my youth!

The conspiracy theory here is that Mr Bannon is a master manipulator who advises Mr Trump to launch grenades at the right time to obscure much more perverse but more far reaching changes, such as the fact that he now has a presence on the NSC.

As for congress not rubber-stamping his bills, isn't the rather more important issue that those tax cuts and deregulation are one of those things that sound good but don't really matter relative to the macro landscape? Plenty of research reports out there focusing on the upside to s&p 500 EPS from those measures, but the impact on global corporate profit margins in some currency adjusted manner isn't that obvious. The world was pretty super optimized in favor of large corporates in every sense before Mr orange happened along, and I would hazard a careless guess that any deviation from that equilibrium in terms of policy change is a likely path to a much more sub-optimal maxima. His measures are a bit like vigorously rubbing a healing sore in the hope the blood flow will accelerate recovery - ur best case is nothing bad happens.

So yeah, all a bit myopic as far as Mr Market goes, and all too likely to continue.

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abee crombie
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January 30, 2017 at 4:58 PM ×

nice call on airlines IPA, they are a puking today, rails less so... but this is a big week here, I'd caution to rush to conclusions about the market in general on just this mornings price action.

short term DXY calls here? kissing the 100 level again....

FTSE now negative YTD, after that massive end of year run

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Leftback
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January 30, 2017 at 5:50 PM ×

Nice post, Macronick, we had pointed out in our Trumpflation? piece that many of DJT's ideas are likely to have profoundly DEflationary outcomes, including restrictive immigration policies, import tariffs and trade wars, to name just three.

Btw, Nick, we always liked this one: "Mr Market rides the escalator up, and the elevator down". Belter. Polemic was fairly accurate with his estimate that we would see declines in US equities by the last week of January.

Short IWM and long TLT/LQD/AGG/IQI here. We also like JPY, but have no position, sadly. Yes folks, an actual 1% down day is in progress in SPY, USDJPY and QQQ. Let's hope our tiny 12 yo punters have a change of underwear handy.

Just waiting around here for a tiny bit of fear to begin to permeate the market, and for a flight to quality to begin in fixed income. It has been interesting how JNK and HYG have continued to attract fund flows even as rates moved up 100 bps at the long end, and even now high yield is refusing to sell off alongside small caps. Eventually we think that all risky assets will end up in the same bathwater and a few babies are going to get chucked out as well. Junk bonds have had a charmed life since early 2016 even as other yield hog favorites such as EM govies were slaughtered in 2016 in the face of the rising USD.

Today's German inflation data has put something of a bid into EURUSD and USDJPY is being sold hard. If Bucky goes down the toilet, Treasuries, munis and IG will be the only US$ assets bid.

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MANU
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January 30, 2017 at 7:21 PM ×

Goldman Sachs saying today that the Trump rally has 5% more to go...

F**K! run and take profit ASAP (if you have not done so before) and sell short every single stock the US has touched!!!

These guys are definitely unloading shit loads...

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IPA
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January 30, 2017 at 7:54 PM ×

I would like to point out a very powerful pattern that we now have on pretty much all equities daily charts. ISLAND REVERSAL

Longs are stuck on an island. Need to have a few days of this though.

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johno
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January 30, 2017 at 7:57 PM ×

Sympathize with arguments on long side of the bond debate. COT positioning suggests Polemic is right about model-based, i.e. momentum-driven, algos being very short. So maybe we get some clearing of those positions with turning data. Trading bonds is tricky because it is THE trade everyone wants to get right and not miss, either way it goes. Maybe that situation resolves in some months of choppiness until positions are worked down and interest has fallen. It's a little surprising that with today's selloff in commodities and equities, the 10Y and bunds are basically flat.

For my part, flipped from long EURCHF to short when it went through 1.067. I didn't think ATLN VX was a good reason for the SNB to ease it's floor, but it looks like they are and we'll see how far this goes. Probably not more than a 1-2%.

Got back long USDRUB first thing. All the chatter about an executive order to lift sanctions on Friday turned out to be a big nothing, and summaries of the call with Putin (as well as Trump's own remarks later Friday) suggest this is unlikely for now. We likely start seeing the CBR intervention post the Feb 3 meeting.

Would someone like to write a letter to Bannon or Ross or Navarro suggesting the US impose tariffs on Swiss goods and services, to be stepped up until a Swiss unemployment rate target of, say, 5% is hit? I mean, seriously. Rich. Economy doing well. And the SNB is doing this crazy, mercantilist intervention. Time for some macro activism????

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washedup
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January 30, 2017 at 8:12 PM ×

@MANU - I'm curious - if that were the case why wouldn't they say the rally has 10% left and unload shit loads 5% higher?
@johno its interesting that Trump thinks trade with Mexico is rigged in their favor collectively across thousands of firms, but has no problem accepting OPEC production cuts when they openly declare themselves a cartel. Wouldn't that be a better battle to fight than say, the one he would have to wage in Iraq to, um, 'take their oil'?

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January 30, 2017 at 11:36 PM × This comment has been removed by a blog administrator.
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Polemic
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January 30, 2017 at 11:45 PM × This comment has been removed by the author.
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Polemic
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January 30, 2017 at 11:47 PM ×

As Harry Monk has been deleted i might as well delete my reply..

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Nico G
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January 31, 2017 at 12:54 AM ×

I wonder if they're gonna start fining Deutsche Bank over global warming, since they're at it. And for TUI worldwide.

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January 31, 2017 at 1:13 AM ×

IWM gave up the 50 DMA today, so all you shorts may yet be on to something. I'm keeping the powder dry just a little longer myself.

On a separate note, anyone care to have a look at $BDI and DRYS, and share your thoughts?

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IPA
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January 31, 2017 at 2:13 AM ×

What happens when everyone is looking for the same thing? Maybe we don't get the blow-off top? Sideways move, island reversal, brief pause for a few days, and..... down it goes hard. SPX - today could be 9/9/16 or more like 9/26/16. Enjoy!

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James
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January 31, 2017 at 3:11 AM ×

Great Post.
I am not sure on this reflation/deflation issue. Would not a trade war or an imposition of across the board border tax be inflationary? At least in the short term? Similarly would not the imposition of serious immigration controls do the same, ie. Restrict access to labor leading to increase prices. I admit there are some deflationary aspects to Trump’s policies but in toto the desire to increase or interfere with particular sectors of the economy is potentially LT inflationary? I agree the infrastructure spending may well be toned down, or directed at resources and projects that do little to increase productivity, and that too may well turn out to be more inflationary than deflationary. If you thing the economy is already at full employment then what you may get is what Summers and others are calling a sugar rush leading to a sharp boom bust cycle in the real economy and in the rates markets?

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koolbong
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January 31, 2017 at 4:13 AM ×

talking of models and momentum, USDJPY is looking interesting here... a double top at 118.60, another one at 115.50... SPX looking toppish (famous last words?).. a clean break of 112.50 should see reasonable panic in model-la-la-land...
on a mostly unrelated aside... if they can build computers that make sacrifices while playing chess, surely we aren't too far away from models that will actually fade momentum.. till then..

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January 31, 2017 at 1:19 PM ×

James,

While I agree with your assessment on those policies generally being inflationary, I question whether that is enough to offset global deflationary forces and whether they would even help contribute to those forces in the long run. Assuming these polices create "false" incentives for for capital investment in US (combined with existing over investment - doesn't that create further deflationary pressure?

In other words, it will be very challenging for typical fiscal and trade policies to undue a savings glut that has been building for decades.

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Leftback
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January 31, 2017 at 1:46 PM ×

James, mate, try this: just sit down for a minute and ignore all the spending that goes on by the top 5%.

Just for a minute, sit quietly and visit the rust belt with me in your mind (Detroit, Cleveland, Buffalo), or a small midwestern city (Dubuque, Carbondale, Huntington), and think about your average Joe and Josephine Six Pack. J6Ps wages are flat, they have very little slack in the budget, and credit is usually nearly maxed out. J6Ps have no savings glut, the 1% does.

If Trump tariffs cause prices to rise 5-10% at the WalMart (I would argue that some of that is already priced into rates), they are just going to buy less stuff, China is going to have a yuuuuuge manufacturing slump and the WalMart will have to reduce its prices to avoid going out of business.

J6Ps buy food first, then gasoline for the car, then stuff for the kids, in that order. Americans in this bracket cannot spend money they don't have, so any inflation will be very very transient because of demand destruction.

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MANU
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January 31, 2017 at 1:53 PM ×

@Leftback - AMEN to that.

By the way, that is one of the main reasons why EURUSD will be at 1.25 by year end IMHO

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Leftback
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January 31, 2017 at 1:53 PM ×

The J6Ps budget is one reason retail is screwed, Amazon is the other. US retail is the next source of big problems in the credit market. As people who invested in HY discover why it is often called "junk", credit investors will flee the sub-sector and spark a flight to quality. With everyone and his uncle now massively short Treasuries, that's going to cause some issues:

http://www.marketwatch.com/story/forget-energy-retailers-are-expected-to-suffer-big-spike-in-bond-default-rate-in-2017-2017-01-30?mod=MW_story_latest_news

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Celeriac1972
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January 31, 2017 at 2:29 PM ×

Thanks LB. Have I understood your hypothesis correctly?

Trump economic policies cause inflation that hits J6P who has nowhere to hide, no shock absorber. Retail spending suffers undermining the (thin) marginal profitability of retailers. Retails slice of the HY market (+ related CRE?) tanks prompting a flight to safety. Everyone short Treasuries is carried out in the ensuing "mother-of-all-short-squeezes".

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washedup
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January 31, 2017 at 3:07 PM ×

@Left yes I agree with your view on retail credit - I am not touching treasuries because I think every central bank will be selling them so price gains will be very muted with a reduction in short interest, but I was I would pick a bull flattener. Till of course Trump instructs the treasury to default on interest payments to China (not Japan, they are friends with Ivanka) to fund corporate taxes here at home!

Time to take trump literally AND seriously folks!

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MANU
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January 31, 2017 at 4:23 PM ×

@Leftback - have you seen the lovely weekly trend that is about to be tested in XRT? If it breaks below 42 or 41.5 it could be looking for a massive drop.

I am not a massive fan of technicals, but it is so obvious that could have big implications.

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johno
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January 31, 2017 at 4:39 PM ×

Interesting price action last 24 hours.

Seeing the island reversal and in keeping with my plan to get short one last time if the Dow broke below 20,000 after a brief sojourn, I bought some Feb SPY put spreads yesterday. We'll see. If we go back up to 20,100, I'll sell the spreads and take the market off my screen for two months. Keep in mind, I've been wrong/lost small fading this thing twice already.

Interesting thoughts on retail by LB. Reminded me of two things. #1 the NY Post article the other day about how the DIY auto parts guys (AZO, ORLY, etc.) had burned bridges with the auto manufacturers by buying 3rd-party parts, which has made the auto companies happy to sell to AMZN at good prices. AMZN is apparently going to enter the space in a significant way. #2 a chart I saw the other day of what, in absolute $ terms, we buy the most of from Mexico. Guess? Auto parts. So, I'm thinking inflation squeeze on retailers' customers generally, plus Amazon targeting these guys, plus tariffs on all those parts the retailers are selling (under their own brands). IPA, what do you think of shorting a basket of the DIY auto parts retailers?

Some technicians calling for end of USD bull market if DXY < 99 and/or EUR >1.08. I don't know. Any dollar views out there? I'm not much of a technician. My only levered USD position is in USDRUB, but my assets are USD-based. I do wonder ... if Trump is going to make America mercantilist, what's the dollar path from here? Potentially a squeeze higher, but eventually quite negative after the world adjusts to using other currencies for trade and debt. One thing I never forget is how gold rallied hard after Volcker was appointed, which ended up being the ultimate irony. Maybe we have the same here?

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IPA
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January 31, 2017 at 5:11 PM ×

johno,

They are a part of a larger basket which I am already short - XRT. If you look at their charts you can see their relative strength compared to overall retail. I would want to see a consecutive close below the middle BB on monthly before I would short AZO and ORLY. Don't want to pick on the strongest guys. But XRT is already there, has a pronounced H+S in place with a nice bow looking down on monthly middle BB with just a single close above it since Aug of 2016.

Since we are on technicals, look at transports. Unless we rally hard into the close today, the last two monthly candles look pretty scary on IYT.

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abee crombie
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January 31, 2017 at 5:17 PM ×

So EU is leading us lower, from what I can see. But with Vol still very low in the US and in EU perhaps we need a few more selling days of this before buyers return. High Yield just joining party today but would hardly call it a big sell off (yet). Chicago PMI lower. Will be intersting to see if EU goes lower tom as well. If so it could get fun in a hurry. Keep an eye on high beta stocks, SPHB

Johno, AZO, ORLY are great shorts imo. I never understand how they can have so many stores selling the same crap. 20% EBITDA margins.... thats just nuts. Though americans do love their cars. I've wanted to short for years but maybe now is the time to re-think the idea. Cheers

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Leftback
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January 31, 2017 at 6:30 PM ×

@MANU and others: Great analysis on XRT and I don't disagree with that thesis at all. Good luck.

@Celeriac1972, right now "anything" that causes modest buying of Treasuries will trigger "the mother of all short squeezes". The logic train you outline is one of many plausible scenarios, but the trigger is unknown, it could be anything, like a naf US employment number, a steep drop in the price of oil (which drives inflation expectations lower), etc...

One wonders what the market is going to "feel" like when "passive investors" in ETFs once again experience losses of 5, 7 or even 10%. It is around the 10% level that people who as of today are happily "in the market" but have never bothered to think about what that means will start to ask the age-old question: "what do I own?", and in this case the answer is going to be that you don't really know, [but in fact you own something called "spooz"], that almost everyone owns exactly the same things as you do, and they are selling faster than you are, mostly overnight when you are asleep, and once you wake up it's down 20%.

A few people have written about the parallels between 1987 "portfolio insurance" and 2017 "vol selling" as mechanisms to amplify modest market declines into major panic selling events. Reflexivity works in both directions, which is why, once mean reversion begins in earnest, the momentum and sentiment pendulum so often swings to the opposite extreme.

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January 31, 2017 at 7:31 PM × This comment has been removed by a blog administrator.
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Macro Man
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January 31, 2017 at 7:37 PM ×

Bonds might be boring, but not as boring as the insistence of an ill-bred cadre of posters on insulting other people.

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January 31, 2017 at 8:27 PM ×

Better ill-bred than a snowflake.

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January 31, 2017 at 8:33 PM ×

Small caps rallying strongly... watch the 'macro shorts' get cleaned out as indexes explode higher over the next few days. Then we can listen to the posters here tell us how the stock market "must go down" lol (some people never learn)

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Polemic
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January 31, 2017 at 8:45 PM ×

What does it matter to you HH? You are limit long so no room to buy.
Why distract yourself to comment here from your lux lifestyle..

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January 31, 2017 at 9:20 PM ×

@Leftback

Id like to see some drama with TLT, say a doji off 115 before thinking about buying. Too much sideways action. Market needs to clear out the bears before heading north

MUNI has more potential if I had to consider buying today

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Jim
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January 31, 2017 at 10:49 PM ×

Financial Times: Trump aide accuses Germany of currency exploitation

Germany is using a “grossly undervalued” euro to “exploit” the US and its EU partners, Donald Trump’s top trade adviser has said in comments that are likely to trigger alarm in Europe’s largest economy.

Peter Navarro, the head of Mr Trump’s new National Trade Council, told the Financial Times the euro was like an “implicit Deutsche Mark” whose low valuation gave Germany an advantage over its main trading partners. His views suggest the new administration is focusing on currency as part of its hard-charging approach on trade ties.

In a departure from past US policy, Mr Navarro also called Germany one of the main hurdles to an American trade deal with the EU and declared talks with the bloc over a US-EU agreement, known as the Transatlantic Trade and Investment Partnership, dead. (…)

“A big obstacle to viewing TTIP as a bilateral deal is Germany, which continues to exploit other countries in the EU as well as the US with an ‘implicit Deutsche Mark’ that is grossly undervalued,” Mr Navarro said. “The German structural imbalance in trade with the rest of the EU and the US underscores the economic heterogeneity [diversity] within the EU — ergo, this is a multilateral deal in bilateral dress.” (…)

Meanwhile, the crime syndicate known to the markets as Deutsche Bank was just fined 600 million

https://www.theguardian.com/business/2017/jan/31/deutsche-bank-fined-630m-over-russia-money-laundering-claims

Now that is what I call close ties to Russia

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Polemic
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January 31, 2017 at 11:25 PM ×

Just sell the USD. Inflation is tge end game too but so hard to know what to buy as the speed on infkation vs rates vs growth of earnings in stocks is the dilemma.
So I end up thinking just buy the purest inflation hedge and that's commodities. I m even think gold. But put that lot together and south africa is back in play. Long zar? Whowuddathought it.

Meanwhile Eurostoxx chart looks busted.

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Nico G
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January 31, 2017 at 11:27 PM ×

i got in just in time... Italian yields back to last summer high this is the one story to watch

dont remember where my imgur is on MM but the channel is good until 3150

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Nico G
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January 31, 2017 at 11:28 PM ×

there it is

http://imgur.com/a/K5D2E

target on cash 3156

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Polemic
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January 31, 2017 at 11:43 PM ×

UK is hoing to become a safe haven at this rate.

Ftse hanging in through a downdraft day whilst cable up? That is a rarity.

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Nico G
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February 1, 2017 at 3:27 AM ×

as you know my book to me cable is the biggest buy around. like you i advocate shorting USD and GBP is by very very far the most depressed currency to play against it. Hell, they actually liquidated the GBP that day when it registered 1.14. I expect 1.34 this year and the 1.5 pre-Brexit pivot whenever Brexit procedure is normalised. ironically people won't stop pouring into the UK for a building gig or to wait tables. UK will still get 'cheap' labour while keeping the undesirable at tunnel's length. Banks are not moving much let's see, so far it ain't a bad set up.

i'll drivel here but the euro will have a very bad year. March 15 Dutch elections first and then France is shaping up horribly Hamon on the left is a return to dumb fuck socialism nobody wants (universal revenue yeah, that's what he promised) and main man Fillon is getting destroyed by a scandal, paving the way for a le Pen win. This is going to demolish the euro and UK will gain from this. suddenly they will look so SMART at having abandoned a sinking ship first while France, Italy and Greece will be trapped inside fighting for life jackets.

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February 1, 2017 at 3:56 AM ×

Agree on the euro long term, but getting the timing right won't be easy. They might be able to hold it together longer than anyone can imagine. Perhaps consider selling USDMXN - the peso looks even more undervalued than cable.

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johno
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February 1, 2017 at 4:41 AM ×

Disagree with you there, Nico. My guess is it'll be Macron. Bye, bye, 35 hour workweek and onerous labor restrictions. France's economic potential has been strangled for decades and is going to be unleashed. They have an education system in that country, and it is *impressive* (unlike complacent US or UK, which depend on brain draining the rest of the world's top minds). The French election is maybe the #1 reason to be positive on Europe. France and QE tapering coming into view in H2 are the catalysts for long EUR. I'm not long, but those are the catalysts on my radar.

I'm not going to comment on these immigration restrictions of Trump's, but I will say that if the US stopped the flow of high-skilled immigrants into the country, I would give Silicon Valley ... no more than two decades to go bankrupt. That America (with a population of a mere 320m) is able to siphon off so many of the world's (>7 billion population) best and brightest is probably America's greatest economic strength. Even if America upped its game in primary education, it would still be well and truly on the road to un-greatness without high-skilled immigrants.

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adamantic
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February 1, 2017 at 5:47 AM ×

Has anyone kept an eye on GBPAUD?

Odd cross but I'm paid in sterling and spend in Aussie so it's close to the heart.

The RBA seems intent on keeping rates low. By ignoring the effects on housing they have the tiger by the tail now. Banks have pulled back from riskier lending, but even this will have unintended second order effects. The RBA won't uncontrolled rate rises with Aussies leveraged up to their eyeballs.

Meanwhile GBP - as by others - was recently liquidated and will more than likely rally hard as inflation shows up and the Brexit picture firms up and everyone gets on with things.

For those S&P bears among you. this is my two cents: expect two more rallies, one on infrastructure spend, one on tax policy, but things will dump later in the year when Trump appoints his Fed pick, with a little anticipation time. Now is premature.

No doubt Trump will someone who thinks high rates a moral good.

The prospect of a 200-300 basis point uplift should give the market a good kicking, but it's unlikely to happen before the new appointment looms. IMO.

If we've learnt anything over the past year (), it's that upside risk can hurt as much as down. Recommend two way bets.

M

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Nico G
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February 1, 2017 at 6:54 AM ×

johno

great so see your positive read on France - i spent first 26 years there once phd completed i did what so many do - i left as soon as i could. US attracts the best brains in the world, France loses them. To give you an idea London is the 7th French city, so every French politician grabs the train to campaign there and promise 'so many changes' that would inspire the French diaspora to come back. I agree on the French education system though it is way up there. Neighbour in Hawaii is a former Morgan Stanley boss who hired countless French engineers on his quant desk. French do good maths (cf. the amiable Villani, recent Fields medal)

Macron is a lunatic. He is too young. i do not trust someone who fucks his high school teacher what the hell is that, a president who has no kids. A second round Macron/le Pen would be quite a head scratcher. Polls show le Pen losing to anyone alive on second round. The problem with le Pen is the same as with Trump. Many people who vote for her shut up about it for fear of being attacked. They patiently wait for the voting booth and the polls can't grasp that reality. Neighbours in super democrat Hawaii had to hide to celebrate Trump inauguration. They didnt tell anyone they support Trump and they would not tell pollsters.

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Up_Side Down
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February 1, 2017 at 7:38 AM ×

adamantic

Re AUDGBP agree, personally I have the inverse economic imperative to you but the pair does look far from par in a long term context.
In the 15 years to 2010 when the Aussie vs USD traded mostly in the 70s (as it is now), it traded mostly around 40 and up to 50 of those GB pee. So today's 60 p offer does suggest an opportunity.

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abee crombie
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February 1, 2017 at 1:35 PM ×

Interesting thoughts on GBP. Have some ppl in the office wanting to buy it but I am still a bit cautious. When a currency makes a new 30 year low I'd rather wait for dust to settle a bit. FX over shoots happen so often

US tech earnings to save the day again?

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IPA
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February 1, 2017 at 2:34 PM ×

Tops are a process not an impulse. Hence we have many V bottoms but very few blow-off tops. I continue to believe that Monday gap down was a warning shot, albeit not a very loud one. But with low vol it is quite expected to have a muted selling to begin accelerating at an increasing pace and result in a crescendo. So... I think that's the scenario unfolding here. Traders are to watch the following SPX levels for entries on index shorts or individual stocks (on sympathy):

2288.88 (bottom of the island)
2291.62 (Friday low)
2294.69 (Friday close)
2298.37 (ath close)
2299.02 (Friday high)
2300.99 (island top & ath)

A close below 2278.87 opens up the following short-term targets: 2254 & 2233.

Quickly on Dollar. DXY is scooping stops below 100. Very classic major level play. 99.43 stop scoop did not even happen. Fed will probably sound hawkish (especially after ADP) and up above 100 it goes and stays there.

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Polemic
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February 1, 2017 at 2:43 PM ×

IPA,
The USD, if really volatile, should be seen as a direct SPX driver. If USd gets really whippy it can easily smear the value of your chart points that are as effectively assumed to work off a steady dollar.
eg .. 5 % collapse in USD should see US global stocks 5% higher without anything else changing.

I just feel that the noise from USD FX will make the accuracy of your chart points somewhat spurious

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washedup
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February 1, 2017 at 3:06 PM ×

@Pol on "5 % collapse in USD should see US global stocks 5% higher without anything else changing"

Kind of surprised you think that - wouldn't that require a fairly big shift in narrative? The correlation between risk and dollar, especially USDJPY been strongly positive last few quarters - I guess one could argue that EURUSD could bear the brunt of that adjustment, but in any case major correlation shifts like that are accompanied by pretty high volatility - the shift from 2013/14 (commodities/EM) to late 2015 (US Tech and then US rates) is a good example.

Right now the Fed, Mr 'trade war' Navarro, and Mr 'tax cut) Trump are all pulling at the dollar in different directions, and not gently at that - the most dangerous thing may be to have an opinion on it at all!

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MANU
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February 1, 2017 at 3:59 PM ×

@Polemic - a quick look at correlation DXY vs SPX since the US elections shows +75%. I would say that USD negative is negative for US markets, at least under current market conditions.

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Polemic
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February 1, 2017 at 4:35 PM ×

MAnu - yes for now as all part of the trump trade as one unit. My concern is that in the long run equities negatively correlate to their local currency on a comparative strength basis to other indices. FTSE is a classic case, or Nikkei.
So I just think to sell or buy both local curr and stocks is a double big call. I rarely be long nikkei AND jpy,

I know US structure is much more dampened but the logic still is lodged in my brain.

Washed . I was just using the example to illustrate the above point re nikkei or ftse.. it was hugely generic with everything riding in teh erveything else being equal bit.

To a great extent I have been amazed at how dollar and equities have been screaming up post trump in the total USA trade, so yes, they can come down in a 'total USA trade' unwind.

But my point that FX led fuzzying of spuriously accurate chart points still stands.

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IPA
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February 1, 2017 at 5:40 PM ×

Polemic, just to make sure you understood my stance from the my earlier comment on SPX and DXY levels. Dollar up equities down.

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Leftback
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February 1, 2017 at 6:11 PM ×

"That which does not kill you makes you stronger". Good blog post title there, totally original… ;-)

Mr Bond is hanging tight today after that strong ADP number. Perhaps the market suspects that the ADP number is an aberration and the BLS number is going to miss its now upwardly revised expectations on Friday. BOND is above the 50 day and has been steadily making a series of higher lows that marks a slow recovery off the long bottom. IQI is having a very decent week, too.

Duration is having a harder time finding a bid, but TLT isn't being killed even after the employment data. Unless Dame Janet goes full on Screaming Eagle today, we are likely to see a bounce in the Long Bond into the close. Treasury shorts, beware!

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Leftback
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February 1, 2017 at 6:29 PM ×

With 12y-o HFMs coining it, anons trolling, bear baiting and now the YOLO wolf:

http://www.marketwatch.com/story/apple-trader-loses-massive-bet-or-did-he-2017-02-01?link=MW_latest_news

Can one be forgiven for thinking that it is probably getting very late in the cycle? Btw, the Twitter joke about YOLO wolf joining Pershing Square as a risk manager is pure class. OK, back to waiting for the Dots and scrutinizing the length of Dame Janet's nails…. ("yes, more than 1cm today, she looks hawkish, Bob").

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IPA
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February 1, 2017 at 6:51 PM ×

Leftback, don't know about her nails, but I expect her to be wearing a green outfit after all the jawboning of the dollar we got yesterday. It was doing their job for them, now they have to make up for the headwind created by the DJT administration's full-blown assault. Noway Fed lets this train get derailed and stays quiet.

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Leftback
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February 1, 2017 at 6:59 PM ×

Another sign of late cycle markets: people stop believing that you need to think to make money. Just let the computer do it.

http://www.marketwatch.com/story/computers-are-taking-over-this-list-of-the-worlds-10-greatest-hedge-fund-managers-2017-02-01?link=MW_latest_news

Machines, quants, algos etc.. always out-perform active managers in quiet, low volume bull markets, BECAUSE THAT'S WHAT THEY WERE DESIGNED FOR. No machine has ever been designed that can negotiate a bear market - because it can't be done.

We still need the pilot for take-off and landing, even though the autopilot may be on for 90% of the flight.

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hipper
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February 1, 2017 at 7:29 PM ×

The ball is back in your court, Mr. Dove (even when the cycle based on time should in all likelihood be finished within a couple of years):

https://twitter.com/zerohedge/status/826868455433445379

At least it's now probably easy to determine there are no ulterior political motives to throw bricks into the Trumponomic's machine, I'd say 1 hike max, and that in December. If EUR goes up significantly, that should really throw a nice dose of excitement along with the Dutch and French elections, especially with periphery yields rising.

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IPA
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February 1, 2017 at 7:58 PM ×

No green outfit, but there are a couple of green bottles on the table in front of her. Does that count? She looks very tired.

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Polemic
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February 1, 2017 at 7:59 PM ×

Sorry IPA
"I seeeeee" I reply blindly.

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johno
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February 1, 2017 at 8:02 PM ×

Not much movement in the Fed statement. No setup for a March hike.

Thought DB's FX Daily today was quite good. Gist of it is that Trump appointments to the Fed will be crucial for DXY. Dove => DXY down, curve steepens. Hawk => DXY up, curve flattens. Buzz is that he'll appoint a hawk, but we'll have to see who he picks to fill the two empty seats to get a firmer idea of what kind of Chair we'll have in 2018. All a statement of the obvious, but with so much noise getting reported, it's good to be reminded of what's really going to matter.

PMIs super strong. Fed as dovish as could be hoped. And US equities selling off here. Interesting that MF and ETF flow data don't show flows going into US equities. Like IPA, I'm looking at the island bottom to invalidate my short.

W/r/t to Macron, I think I was inaccurate yesterday when I wrote "bye, bye to the 35 hour workweek." He wants to make "adjustments." Also "adjustments" to the wealth tax. Better than Holland, but maybe wouldn't be "Morning in France" with him. Interesting to read that Nico thinks there's a similar silent support for Le Pen that Trump had.

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IPA
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February 1, 2017 at 9:34 PM ×

To further add to my comment on the SPX short levels (not to talk my book, as I am already short and looking to get shorter) and simply observe the obvious. Dow has been the leader of Trumpflation trade, since Nov 8 close it was up 9.8% at its ATH vs 7.5% for SPX. So if we look at its structure vs SPX on this mini selloff, then it may be the leader on the way down as well, as it's down 1.2% vs 0.9% on SPX. Looking at today's Dow high missing the close of Monday's gap down day by just 3 points (front running), never even getting to the bottom of its island, makes me believe that even more. Just to make it clear, I am not a big Dow follower and watch SPX more, but the fact that we now have 3 consecutive daily closes below 20K has to make longs very concerned here. All of this seems like a voodoo art to some, but may be accepted by them later as a no-brainer should we break down from here.

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Nico G
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February 2, 2017 at 12:02 AM ×

the biggest big story regarding US equities is Ray Dalio's change of mind regarding Trump... i was so surprised he embraced Trump election with three hands calling for screaming economic activity higher. It was very uncomfortable to go short while Dalio was going full momo up. Now he is finally scratching his head like we did right after elections, pondering how protectionism and a slow kill of world trade could dwarf whatever well intended policy 'at home'.

i do not want to jinx it but we might look back at January 2017 as the best short opportunity that ever was in the last and next 8 years. at least i feel this way, the dust is slowly settling on the peril of a Trump presidency. Exciting time!

(note the exclamation point, Trump tweet style)

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Polemic
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February 2, 2017 at 12:03 AM ×

Nico .. had the same feeling
Making shorts great again!

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IPA
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February 2, 2017 at 3:11 AM ×

I would like to point out that we have a perfect cup and handle developed on 10-yr yield TNX daily chart. The distance measures the target at roughly 2.8%
There have been numerous cup and handles since the bottom (in the yield) in July of 2016. All of them (without an exception) broke out and achieved their targets. Buy DXY and sell TLT on this, imho. Now, can one be short TLT and SPX at the same time? I think we may get a surprising answer soon.

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Polemic
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February 2, 2017 at 3:13 AM ×

And after saying he had a better call with Putin than with Turnbull we see that Ukraine is under assault agsin. Class.

Ukraine, Greece, periphery debt.. there is a chance the old favorites will all fall out of the bear toy cupboard as the door catch breaks.

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Nico G
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February 2, 2017 at 12:02 PM ×

after years of hunt i finally identified 12 y o HF

introducing the Ian's Million Fund:

http://seekingalpha.com/article/4041847-fund-kicks-2017-wrong-foot

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Rossco
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February 2, 2017 at 12:07 PM ×

Somewhat interesting that commodities continue to do well with China on holidays.

Feels to me like $¥ through 112 dxy low 90s accelerates the commodities as a hedge against stagflation theme.

Short s and p long materials working alright

R2K. Like my own jgb widow maker trade. Tho the widowing will be due to being bored to death

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Rossco
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February 2, 2017 at 12:08 PM ×

Should say low 99's

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hipper
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February 2, 2017 at 1:10 PM ×

re. Ukraine, just before the recent offensive Arizona homeboy McCain and fellow Graham were spotted there, which always seems to be a source of trouble. Probably irrelevant for the market though as all geopolitical events so far, for any longer than a day or two:

https://pbs.twimg.com/media/C3pX0STXAAAgFUZ.jpg

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Rain
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February 2, 2017 at 1:20 PM ×

I think on balance we still don't know enough about trumps policy implications in practice. There's still a lot of rhetoric, especially as he bemoans his cabinet picks being delayed by congress, and little actual real action.

I like SPX here but more so DXY. DXY is close/at to the 38.2 retracement on the weekly chart although part of me feels like i need kevlar gloves!

(formerly 'Rain' before new anti troll policy)

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washedup
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February 2, 2017 at 2:10 PM ×

@Nico re: Ray Dalio nice to be the king till the mob comes for you, which may or may not be imminent - smart or not, there is no FW some of these managers get out of their mammoth 35-40 BN $ books without leaving a trail of blood and excrement. I like how some of them are now running around stating 'active' investing is back - oh because when its time to raise cash u'd rather be in 7 extremely illiquid holdings that no one else has ever heard of.

As MM recently commented, I know 'how' this ends, I just don't know 'when' this ends.

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Polemic
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February 2, 2017 at 2:49 PM ×

I can only assume that Dalio has had his payback, whatever it was. The billionaires who backed Trump will be supprting him until he pushes through whichever bit of legislative payback they were after. Once done they'll probably not care less.

So on that basis the more legislation he passes the less support he will have left from the big boys.
Just a thought..

GBp is falling. But it isn t it wonderful to see it fall not because of impending disaster but because the future according to. BoE is just sooooo Goldilocks they won't be having to raise. Upping growth forecasts and predicting strong employment whilst calling inflation too low to need a hoke is pretty Carneylocks.

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Nico G
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February 2, 2017 at 3:21 PM ×

Pol talking about the billionaires who backed Trump there is no other than the highly secretive Robert Mercer, number 2 of rentech and a legend in his own right

so between him and say, Erik Prince there are very dark and interesting figures driving Trump's agenda

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IPA
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February 2, 2017 at 6:03 PM ×

DJ Transports neckline of double top is @ 9K, IYT @ 162, and XTN is chewing on it @ $53.70 as I type. Starting to look a bit ugly for longs here.

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washedup
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February 2, 2017 at 7:55 PM ×

Meanwhile, I am sitting here marveling at Mr McHenry's letter to Janet Yellen - not that I am a fan of the global central banking cabal, but it would be interesting if one of these days some Trump emboldened republican with a rudimentary knowledge of financial interconnectedness (not to mention the Orange blob himself) goes bitching to the Fed about their propping up foreign banks and they go - um ok, all urs then.
On second thoughts, after the resulting stench of napalm dissipates, they will probably blame everything on a girl being allowed to run things.
@IPA doesn't get any more textbook than that IYT chart - a couple false alarms on that recently though so lets see what happens.

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February 2, 2017 at 9:55 PM ×

Guys, how are all your shorts doing? It's almost like the markets refuse to go down isn't it?

Look, if you want to just wire your funds to me direct, we could save everyone a lot of time. Bwahahaha

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IPA
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February 2, 2017 at 10:48 PM ×

HH, come see us after the close tomorrow.

Also, I hear that after it gets dark on the island, margin clerks come out of the jungle. Watch out, you may get swallowed alive.

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Polemic
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February 2, 2017 at 11:13 PM ×

Re McHenry letter. Fits with the theory of rule change to auit Ts biggest sponsors.How many bankers in his pack? It's like watching a bank robbery.. in reverse.

Hand over that money to the banks or else.

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Rossco
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February 3, 2017 at 3:06 AM ×

Chinese NY over - Commodity rally over ? I'm out

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MANU
admin
February 3, 2017 at 8:29 AM ×

@HH - Happy with my shorts and puts in SPY, XHB and XRT, also shorting USDMXN.

If I was you I would be buying some puts for your longs too.. you know, just in case.

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Celeriac1972
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February 3, 2017 at 1:40 PM ×

The mother-of-all-short-squeezes in ICE.L means 12yo & his posse will have cleaned up again today. No doubt he'll be along to share the great news shortly.

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Jim
admin
February 3, 2017 at 1:56 PM ×

It has been one whole day and Deutsche Bank has not been caught committing another crime

BBG: "Deutsche Bank to Cut Equities and Fixed Income Trading Staff

Cuts said to affect up to 6% of FI staff and 17% of equities"

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February 3, 2017 at 3:49 PM ×

IPA, MANU etc

How're those short equity index trades coming along? Do you still think I need those puts? lol

Celeriac
I don't know about 12yo HFM (wasn;t he a parody account?) but I do know I'm cleaning up. My offer for the members of this board to just wire me their funds direct and cut out the broker/exchange fees still stands bwahahaha

Have a great weekend guys!

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johno
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February 3, 2017 at 6:40 PM ×

Yes, you're a genius, HH. Moving on ...

I completely missed this footnote from Yellen's January 19 speech:

“17. Based on estimates generated using the term-structure model developed by Li and Wei (2013) and the procedure discussed in Ihrig and others (2012) and extended by Engen, Laubach, and Reifschneider (2015), the Federal Reserve's holdings of Treasury securities and agency mortgage-backed securities continue to put considerable downward pressure on longer-term interest rates. However, this pressure is estimated to be gradually easing as the average maturity of the portfolio declines and the end-date for reinvestment draws closer. Over the course of 2017, this easing could increase the yield on the 10-year Treasury note by about 15 basis points, all else being equal. Based on the estimated co-movement of short-term and long-term interest rates, such a change in longer-term yields would be similar to that which, on average, has historically accompanied two 25 basis point hikes in the federal funds rate.”

So, Yellen footnoting a study suggesting that this year's autopilot duration shortening of the Fed's holdings is equivalent to 2 rate hikes. Any thoughts on that?

EURUSD can't hold 1.08, gold can't break 1220, USDJPY after breaking 112.5 has stopped short of 112 three times now. USD keeps us in suspense.

Anyone expecting Trump to openly criticize the BoJ's monetary policy as de facto FX manipulation during his pow wow with Abe on the 10-11th?

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washedup
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February 3, 2017 at 7:03 PM ×

@HH - yes - u were right and deserve credit for calling it - you are extremely good at forecasting short term moves - did you know participants here all publicly make fun of you but then quietly just copy your position?

@Johno - this is an interesting one because there are more than a few inconsistencies in Yellen's stance - in August she is making a case for being allowed to buy stocks and further QE at Jackson Hole and then she is out talking about rolloffs? Anyway - I think the global picture matters in terms of the impact on yields given the marginal demand seems to all be relative to JGBs/bunds, so the standalone analysis is kind of meaningless - that said, this year around $200 BN will rolloff from the Fed, but far more than that (say $750 BN) will be purchased by BoJ and ECB - one really has to be a believer in the power of the 2nd derivative to think it would constitute a tapering - 2018 is the 1st year when you could say the combined effect of all CB's actions amount to negative liquidity (unless of course, SPX declines a few bps and they all sh@t their pants again). That raises the further question of how the market would price in an upcoming global liquidity taper to be preceded by an ongoing glut - you would think 2's/5's would steepen, not so sure further out.

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February 3, 2017 at 8:02 PM ×

washed

Thx, I'd love to take credit for my forecasting abilities, but it was just so glaringly obvious. Having made v large returns being long equities on this continual move up, it wouldn't bother me if others here were also doing v well. However, I know they have not. The reason so many fail in this business is that their ego clouds their judgement. Constantly trying to prove their macro skills, calling tops in the market and suchlike is a losers game - and as we have seen time and again, many here consistently lose. I trust you personally have been more astute.

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johno
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February 3, 2017 at 8:16 PM ×

washed -- Don't let our secret out! If the unknowing trolls become knowing, then my algorithms that use their posts to this site to adjust how much I leverage my long equity exposure (always long of course, just a question of how levered!) will be thrown off.

Big round trip in rates today, driven by ... Williams is the story, but I presume it's more to do with the equity market. The USD lives to die another day. Speaking of USD, the other day GS came out defending it. I appreciate several of their arguments, but their argument that real rate differentials have been supportive of the USD doesn't match what I'm looking at. 2Y US-German differentials look to have gone against the dollar since December.

Interesting to think about what inflation break-evens and real rates are telling us and what the implications for the USD are. Look at US 5Y real rates. Trending down from the December peak. Would you say that's the bond market's verdict on real growth? Or something else? Supposing it's growth, then the bond market is telling us we have more inflation coming and lower growth, which sounds like stagflation. the '70's weren't a good time for the USD, I remind you all. Nor for stocks.

Not to beat a dead horse but, the most beautiful trend in markets that we aren't all playing directly? No, not equities. Short the 30Y JGB. Seven months in a row going in one direction, and counting. Last time that happened on my BBG price history going back to '99? Never.

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johno
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February 3, 2017 at 8:23 PM ×

Just saw HH's post after I posted. A penetrating and worthy observation. Reminded of this great PTJ quote: “Certain people have a greater proclivity for [macro trading] because they don’t have the need to feel intellectually superior to the crowd. It’s very hard to find a pure fundamentalist who’s also a very successful macro trader because it is so hard to have a hit rate north of 50 percent. The exceptions are in trading the very front end of interest rate curves or in specializing in just a few commodities or assets.”

Just to add a twist, and to keep what is confusing, well, confusing -- PTJ made a killing being short from the '87 crash.

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IPA
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February 3, 2017 at 9:21 PM ×

HH, sorry for late reply, was busy losing money all day. You are a winner in equities today. But I also trade other vehicles which may offset my wrong calls on equities on daily basis. So keep this in mind before asking me to wire you the money. Also, my equities shorts are nascent and not something I am going to kill myself over when they go against me 0.7%
We brought the boat back to the island to get you off of it. Your desire to remain on it may result in your being stranded for many months. I hope you have enough provisions to stay alive.

washedup, I personally mirror HH's positions. But I know exactly what you mean ;)

johno, PTJ lost shitload of money before he made a killing on that short.

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Up_Side Down
admin
February 4, 2017 at 12:22 AM ×

IPA's comments on 1987 action got me looking at an old trend analysis from 1950 of the SP500 that I did exactly 9 years ago, before the worst of the 08 Downturn. Interesting that a full cycle later the updated Log regression shows a -10% change in the trend value for Feb 2017 (SPX = 2285). So in those terms it sits right on trend here.

The gradient from 09-17 looks very much like both July 82 - Sept 87 and 1995-2000 to my eye.

In the now 67 year trend the 1987 peak was little above trend, as is now. 2000 was way above 2SD (by my primitive math calc). The HHs are too young to remember down 20+% in 1 day (19 Oct 1987, a day engraved in my memory)

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IPA
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February 4, 2017 at 4:31 AM ×

Up_Side Down,

I hear you... HHs may also not know that 7s are wild in stock market history. 1987, 1997, 2007 are famous for their abrupt precipitous declines (all starting overnight in Asia). Not sure what's with the number as it's not a fib. Anyway, there are some things here that just worry me and feel weird. We have news like today from China get completely ignored. Metals took it on the chin: iron ore down almost 7% and copper almost 3%. Producers got demolished as well (and at the time when we are about to embark on the biggest, aka yuuuge, infrastructure spending of our lifetime). Chinese equities sold off, albeit not much as some traders are still on holiday. It was all due to a move by PBoC to rein in the excess liquidity and reduce rampant speculation on borrowed money. US market instead deeply considered a hope of the law repeal which will probably add the rampant speculation back in. I know, we also had NFP, but ADP has already given us heads up, this was hardly a surprise based on how accurately ADP has predicted NFP lately, the only difference was the wages (prompting a thought about Fed staying put in March). We'll see about that...

Trade what you see and not what you think. Many times I catch myself saying it and then I come across a previous chart pattern that reminds me what I am seeing now. That's thinking. It's essentially what PTJ did back in 87 (with a big help from Peter Borish). They thought, and studied, and acted proactively rather than reactively. By no means am I comparing my stupid-ass brain with the ones of those geniuses, but I have something in mind that looks like it's about to play out. I've been talking about the transports for a while...

Some similarities are at play on currency front as well. In 87 and 97 currencies played a key role immediately prior to the decline. US, Germany and Japan were involved in 87. I don't expect DJT and Merkel to kiss and make up. We are in for a doozy. China and Japan are also not about to curl up in a fetal position and succumb to DJT's pressure to stop their devals. These are all export economies.

And speaking of 7s, cycles, and similarities: 87 and 97 crashes both happened in October (exactly ten years apart). And what happened in February of 2007, exactly ten years ago? Flash crash. HHs were already alive back then, albeit only two years old. The selloff started in China due to authorities' plan to clamp down on speculative trading with borrowed money. Oops...

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koolbong
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February 4, 2017 at 6:33 AM ×

I daresay I find value in the various HH, 12yo postings (esp 12yo, who also seems to have a rare talent for satire)... but on a broader note, they serve to remind us of a fairly important fact.. that macro trading is more than macro analysis...

I'm more an FX trader myself than equities but 'keeping it simple' (which can also be roughly translated to 'don't break your head trying to call tops and/or bottoms') is something that works across product classes...
case in point - my personal pnl from the USDJPY moves last year... I was short at 120 and long at 101, but I made a fair bit less than those two positions should have because I kept using my 'brains' to call the reversal... exiting the trade and stopping back in multiple times...

on a related note I found it interesting that Warren Buffet went ahead and bought a truckload of stocks post the Nov elections... talk about 'keeping it simple'..!!
https://www.bloomberg.com/news/articles/2017-01-31/buffett-bought-12-billion-of-stock-from-election-through-friday

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IPA
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February 5, 2017 at 5:28 PM ×

MM, sorry for posting the link from competition. Goldman circulated this late on Friday:

http://www.cnbc.com/2017/02/04/us-political-economic-risks-mounting-against-trumps-agenda-goldman-sachs-says.html

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Nico G
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February 6, 2017 at 12:41 AM ×

IPA and the bear club all we need to do is support the Atlanta falcons. i stopped in Osaka airport to watch the superbowl


Superbowl indicator beats any quant

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IPA
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February 6, 2017 at 4:36 AM ×

Nico G, isn't it all the way around? I thought if Patriots win it's down for the stock market this year.

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Leftback
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February 6, 2017 at 1:34 PM ×

Whether it is the result of PBoC tightening or increasing political risk in France or Germany, there is no doubt that Treasuries are bid this morning, TLT will not just bounce off the Friday pull-back but gap open - perhaps Mr Bond is about to take off? We hope to be back later in the week with another technical analysis of recent trading in US fixed income instruments.

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washedup
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February 6, 2017 at 2:02 PM ×

@Left - perhaps Mr Bond is about to take off - or perhaps its doing the same thing its done for the last 4 mondays this year - try to get up and run in the morning (with a corresponding gap down in equities), only to be trampled senseless by the running of equity bulls for the rest of the week, starting Tuesday.
I'm not holding my breath, but I do look forward to your analysis.

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February 10, 2017 at 10:09 AM ×

Given the outcome of the ruling yesterday, it is conceivable that Trump may quit within 100 days and the markets ought to factor this in asap.

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