4 replies to this topic

[dTraderB]

I missed almost all of yesterday's trading because of urgent business matters but I will be shorting today, mainly QQQ puts, while daytrading NQ

 

I may take some profits in my high-risk GE holding of 1500 shares.

 

And, really high risk trades I am considering is AMAZON and/or FACEBOOK bearish spreads.

 

 

 

[dTraderB]

COLUMN-Global economy is headed for recession: Kemp - Reuters News 
16-Jan-2019 13:10:36
John Kemp is a Reuters market analyst. The views expressed are his own 

By John Kemp
LONDON, Jan 16 (Reuters) - Global growth is slowing and the world economy is headed for a recession in 2019 unless something happens to give it renewed momentum.
 
The OECD’s composite leading indicator fell to just 99.3 points in November, its lowest since October 2012, and down from a peak of 100.5 at the end of 2017.
 
Growth momentum has been easing for some time in Britain, Canada, France and Italy and there were tentative signs of slackening momentum in the United States and Germany in November.
 
The composite indicator is likely to fall even further when data for December are published next month, given the weakness already revealed in equity markets and business surveys.
 
The OECD composite leading indicator has been weakening consistently for the last year and now points unambiguously to a contraction ahead (https://tmsnrt.rs/2HfQKH5).
 
RECESSION READING
 
In the last 50 years, whenever the index has fallen below 99.3, there has almost always been a recession in the United States (1970, 1974, 1980, 1981, 1990, 2001 and 2008).
 
The one exception was the weakening of the index in 1998, when the United States continued to grow, despite the weakening global economy in the aftermath of the Asian financial crisis.
 
Even in this case, however, the interest-rate setting Federal Open Market Committee noted “the economy has been holding up but is now showing clear signs of deterioration.”
 
“When we feed this information into our various models, they inevitably, as we might expect, engender a quite considerable softening.”
 
The observations are contained in the transcript of an unusual, out-of-cycle conference call held by the Federal Open Market Committee in September 1998.
 
One week later, the Federal Reserve responded to signs of a weakening economy by cutting U.S. interest rates.
 
FREIGHT SLOWDOWN
 
Most of the world’s major economies outside the United States showed clear signs of slackening growth in the fourth quarter of 2018.
 
Even in the United States, the Institute for Supply Management’s manufacturing index for December showed the sharpest deceleration in growth since the recessions of 2008 and 2001.
 
Global trade volumes showed signs of slowing towards the end of 2018 after strong growth in 2017.
 
Air freight through Hong Kong International Airport, the world’s busiest air cargo hub and a proxy for global trade, was down 1.6 percent year-on-year in the fourth quarter.
 
Air freight volumes in Hong Kong were down by a massive 5 percent in December compared with the same month a year earlier, according to the Civil Aviation Department.
 
HARD LANDING?
 
Most economists now forecast a period of slower growth in 2019 but policymakers have expressed hope for a soft landing rather than an outright recession.
 
Policymakers almost always aim for a soft landing, in an effort to maintain business and consumer confidence, but there are good reasons to be sceptical about the scenario.
 
Experience shows the economy is characterised by a significant number of positive feedback mechanisms which amplify booms and slumps.
 
Expansions tend to accelerate as business investment, employment, incomes, consumer spending and equity prices reinforce each other.
 
Once the economy starts to lose momentum, however, all these factors tend to interact with each other in the opposite direction to intensify the slowdown.
 
A soft landing is still possible but a hard landing is more likely unless something happens to kickstart global growth.
 
If policymakers want to avoid a recession, they have two principal options:
 
(a) cut U.S. interest rates to ease global financial conditions; or
 
( conclude a trade agreement between China and the United States to ease trade tensions and boost business confidence.
 
But unless policymakers intervene with one of these alternatives, the global economy’s momentum will continue to slacken and push it towards recession. 

[dTraderB]

The Bear Market Rally Is Almost Over - Prudent Investors Should Reduce Their Risk Exposure

Despite the twelve-month equity bear market, we believe that the market continues to offer a poor long-term risk-reward because stocks remain overvalued, economic growth is slowing, and profit margins are poised to decline as they regress to the mean. While we remain circumspect in the long term, we believe that the Christmas Eve panic low was the end of the three-month 20% correction, and stocks are poised to move higher in the short term.

 

Typically, sharp market declines end when investors capitulate and drive stocks to an oversold level that is rarely seen. These capitulation lows provide a floor for the market and create a positive short-term risk-reward. It appears that on Christmas Eve, investors panicked and created a capitulation low, which provided us with the opportunity to increase our equity exposure and participate in an oversold rally.

Given the extreme fear exhibited by investors, we expect a solid rally, which will retrace more than 50% of the decline and rebound to roughly 2700 on the S&P 500. We believe that this will be a bear market rally and not a new bull market. Importantly, we will closely monitor the quality of the rally and performance of the yield curve, and credit spreads to determine whether or not there will be another significant leg down in the bear market.

In conclusion, our asset allocation remains defensive and consistent with our view that risk assets are overvalued, the market offers a poor risk-reward, and the business cycle is decelerating. As value investors, we believe that the historic asset bubble that was created by the profligate Fed has ended, and as the asset bubble deflates, we will focus on preserving capital and providing positive absolute returns.

https://seekingalpha...e-risk-exposure

[dTraderB]

8 QQQ MARCH puts 

 

 no animals pics

Edited by dTraderB, 16 January 2019 - 12:08 PM.

[dTraderB]

choppy in a narrower range

 

TIM ORD thinks there could be a reversal at SPX 2620 but he is LT bullish with new SPX highs later on

 

He also thinks SPX might revisit a gap at 2450 (yeah, about 170 handles lower than current price)