36 replies to this topic

[dTraderB]

3 trades this morning - 2 short, one long, looking for a possible NQ long setup.... or the surprising NQ drop in the past 30 minutes or so to continue....

 

[dTraderB]

Trouble Year for Credit Continues in October

By Joseph Wallace, reporter

 

Companies are finding it harder to issue new debt, as the volatility battering global stocks adds to existing concerns in credit markets.

U.S. investment-grade issuance slipped 34% from September, according to Dealogic, while high-yield issuance was down 50% from October 2017. Even before last month’s turbulence, American companies had been raising less money. By the end of September, total investment-grade issuance in 2018 was down 12% compared with the first nine months of last year and high-yield issuance had fallen by almost a third.

Meanwhile, investors pulled $3.1 billion from investment-grade corporate-bond funds during the week ended Oct. 24, according to Bank of America Merrill Lynch, bringing outflows over the past two months to a record $25.2 billion. By contrast, equity funds drew in $8.5 billion last week despite stocks’ fall.

“From a fixed-income perspective, 2018 is rapidly turning into a year best forgotten,” said David Oliphant, an executive director at Columbia Threadneedle Investments. “We’re getting to the end of a very protracted and mature credit cycle.”

Bond prices have drifted lower through much of the year, after a yearslong rally. Some of the concerns hitting credit caught up with equity markets in October, sending major indexes to their worst month in years.

The selling in bonds was less dramatic than in stocks. But on Tuesday, the spread between yields on investment-grade bonds and those on safer government debt had still reached 1.51 percentage points in the U.S. and 1.46 points in Europe, according to IHS Markit’s iBoxx indexes. That’s up from post-crisis lows of 1.08 and 0.82 points reached in early February.

High-yield bonds, until recently a rare bright spot in fixed income, have declined particularly sharply in recent weeks. The spread on the Bloomberg Barclays U.S. Corporate High-Yield index has shot up 0.62 percentage point since Sept. 20, the day the S&P 500 closed at its last record high.

Corporate bonds still have much lower spreads than they did during the selloff of early 2016, let alone the global financial crisis. Bankers also say refinancing risk is relatively low since many companies locked in funding early this year, anticipating that markets would move against issuers during 2018.

But some investors believe corporate spreads will continue to climb, even if stocks stabilize.

Are you worried about higher corporate bond spreads? Let the author know your thoughts at joe.wallace@wsj.com. Emailed comments may be edited before publication in future newsletters, and please make sure to include your name and location.

[dTraderB]

First of 3 known market events during the next 4 trading days, after the close today. Of course, there are unknown factors ...

 

IPhone prices have positioned Apple for another record quarter. Apple is scheduled to report results for its fiscal fourth quarter after the market closes. Analysts will be watching to see if pricier iPhones continue to boost results.

 

2. NFP (jobs report) tomorrow, before opening

 

3 Elections Nov 7

[dTraderB]

here are five plausible reasons why markets have given up most or all of their gains for the year:

 

No. 1. Remember 2017: The gains of last year were very unusual. Not only were the double-digit increases much stronger than the median returns over time, they came about with almost no volatility. My best guess is that a market that leaves 2018 with little or no gain simply represents mean reversion at work.

 

And, that’s a great deal! Imagine the God of Trading came to you and promised 20 percent gains in year one, followed by no gains in year two. You would take that offer in a heartbeat.

 

No. 2. High volatility follows low volatility: Similarly, the low volatility of 2017 was teeing up the higher volatility once the calm had run its course. As economist Hyman Minsky argued in his essential book “Stabilizing an Unstable Economy,” booms and busts are the natural tendency of complex, capitalist economies. Said differently, stability inevitably begets instability. We have no idea about the timing, but the move from low volatility to lots of volatility is a cyclical phenomenon we have seen time and time again.

 

No. 3. Extreme optimism: Record profits, tax cuts, deregulation, low interest rates, low unemployment — it’s all so great. When stock prices are at record highs and the crowd is enthusiastic, Mr. Market will do what he can to humiliate investors. As legendary investor Bernard Baruch said, “The main purpose of the stock market is to make fools of as many men as possible.”

 

Markets demand humility — the acceptance of how little we actually know about the present, and an admission that we know nothing about the future. When the U.S. president is tweeting about all-time highs for markets, rest assured there is very little humility in the marketplace (that’s my hindsight bias).

 

No. 4. The era of cheap money is ending: The post-crisis period of zero interest-rate policy ended in 2015. The Federal Reserve has been quite transparent in telling markets that higher rates were coming as policy makers shifted from their post-financial-crisis emergency footing. How fast rates rise would be a function of the economic data — including President Trump’s tariffs and trade war, which are fundamentally inflationary. As we discussed last week, filling the Fed with inflation hawks guaranteed that rates would rise somewhat faster than they might have otherwise.

 

No. 5. The global economy is slowing: Lastly, growth in most of the world’s major economies is losing a little bit of steam. This doesn’t mean a recession is imminent or that a catastrophe is on the horizon. But it does mean that much of the sugar high we have been experiencing thanks to things like tax cuts, record corporate profits and huge share buybacks are already reflected in stock prices. The market isn’t perfectly efficient — I am fond of saying it’s kinda, eventually, sorta, mostly efficient — but it gets the really big issues more or less right over time.

 

With all of those factors already incorporated into share prices, what is going to drive the next move up in markets? I have no idea, but candidates include further economic expansion, more deregulation, another tax cut, increasing innovation, more buybacks, higher dividends and rising profits. But what if none of those materialize? 

 

Baruch also famously said, “I made my money by selling too soon.” Most of us are not Baruch, in which case it is probably too late to sell and too early to buy. Unless you have done nothing amid all the noise and commotion, in which case you will end up ahead of almost everyone else in the long term.

 

https://www.bloomber...et-has-declined

 

[dTraderB]

NQ tries to rally but failed, now another mini down move; still think there will be a good rally today but the CLOSE at 4pm EST matters most, and then APPLE after

 

Thursday Thoughts – Holding Nasdaq 7,000 is up to Apple (AAPL)

Well, we got our weak bounces – now what?

October ended with a bang with the indexes rushing up to the weak bounce levels which, for the sake of an update from yesterday's (and last week and the week before's) predictions are:

• Dow 24,300 with a weak bounce at 24,800 and a strong bounce at 25,300
• S&P 2,640 with a weak bounce at 2,710 and a strong bounce at 2,780
• Nasdaq 6,870 with a weak bounce at 7,080 and a strong bounce at 7,230
• Russell 1,485 with a weak bounce at 1,530 and a strong bounce at 1,575
• NYSE 11,880 with a weak bounce at 12,150 and a strong bounce at 12,400

So the only change from yesterday, despite the "massive" rally, is that we have now turned the S&P and NYSE weak bounce lines green with /ES at 2,723 (still the low end of the bounce range) and the NYSE right in the middle this morning at 12,250.  Until the Nasdaq and the Russell confirm their lines – it would be crazy to buy into this bounce and anything less than strong bounce lines is still a very dangerous market to go long into.

[dTraderB]

Quick NQ short whoosh down, went in late, got to be ready to exit ASAP when it turns around, 23.25 points.... fast reversal, did not catch the long trade t and did not chase...

[dTraderB]

long in& out, short in& out, captured only about 50% of both moves but I will take that anytime

 

crazy wild gyrations!

[dTraderB]

SHORTS shoud be alert and super cautious, there is concerted buying, strong buying, and it is not unplanned.

 

Wait until you see a breakdown without much buying ...

 

LONGS should ride it as far as it goes....

[dTraderB]

"talk of trade talks' rally

 

LOL

Just forget the BS and trade whichever way it goes, make profits

[dTraderB]

QQQ 171.54 is my target to exit 1 or 2r QQQ call

am now net 3 puts  (6puts /3calls)

 

Would like to get at least $1500 on that JAN 2019 162 call but may not and I do not have the patience to ait much longer

 

waiting for NQ breakout, more likely up but be prepared for any move