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‘bump in the road on the way down to Lehman-like drop'


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#1 dTraderB

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Posted 08 August 2019 - 04:17 PM

says the NOMURA analyst:

 

 

This rebound is a ‘bump in the road on the way down,’ says strategist predicting ‘Lehman-like’ drop
KEY POINTS
  • The rebound, supported by dip buying and technical positioning by speculative traders, is bound to be a short-lived one as market sentiment continues to deteriorate, Nomura strategist Masanari Takada says.
  • “We see the rebound in US stocks as a mere technical rally that looks like no more than a bump in the road on the way down,” Takada says.
  • The strategist garnered much attention this week for his call for a “Lehman-like” sell-off as soon as late August.
  • Hedge funds and other players are set to flee the market once when their algorithms are triggered, the strategist said, adding their major trigger line is at around 2,960 for the S&P 500. The index closed Wednesday at 2,883.98, erasing a loss of almost 2% to eke out a gain.

https://www.cnbc.com/2019/08/08/this-rebound-is-a-bump-in-the-road-on-the-way-down-says-strategist-predicting-lehman-like-drop.html

 



#2 dTraderB

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Posted 08 August 2019 - 04:21 PM

a few days of rallying, if so many, then it is down again:
 

The yield curve everyone’s worried about is inches away from flashing a recession signal
KEY POINTS
  • The Treasury yield curve — the obscure plot of U.S. interest rates based on maturity dates — is sloping even more downward, threatening to send 10-year rates below 2-year rates.
  • An inversion of the 2- and 10-year yields has preceded every recession over the past 40 years.
  • While any inversion doesn’t guarantee a recession, “it’s a harbinger of elevated recession risks,” Bank of America’s Mark Cabana tells CNBC.

https://www.cnbc.com...ion-signal.html



#3 dTraderB

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Posted 08 August 2019 - 04:23 PM

Could go as high as SPX 3000 before resuming decline

Larry Summers warns we could be at the ‘most dangerous financial moment’ since 2009

 

Summers added: “Markets are now suggesting the highest risk of recession since 2011. …The collapse in medium- and long-term interest rates is ominous.”

Analysts at Goldman Sachs said Monday they do not expect the world’s two largest economies to reach an agreement over trade before the 2020 election. As a result, the investment bank is projecting two more rate cuts this year, in September and October.

 

“The Fed has been increasingly responsive this year to trade war threats, bond market expectations, and global growth concerns,” Goldman Sachs said in a note.

“In light of growing trade policy risks, market expectations for much deeper rate cuts, and an increase in global risk related to the possibility of a no-deal Brexit, we now expect a third 25 basis points rate cut in October, for a total of 75 basis points of cuts (this year),” the bank added.

https://www.cnbc.com...rrency-war.html



#4 dTraderB

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Posted 08 August 2019 - 04:25 PM

Global macro trader who nailed the 2008 crisis says next 3 months mark ‘edge of the cliff’ for markets—and ‘we’re there right now’

Raoul Pal tells MarketWatch that we are at ‘most fragile point in global financial markets since the eurozone crisis in 2012’

Financial markets are at a crucial inflection point and Wall Street investors should look no further than the U.S. dollar for the clearest sign of the increasing stress on the system that could ignite a financial crisis a la 2008, says Raoul Pal.

The former GLG global macro hedge-fund co-manager, who was among the few investors that predicted and profited amid the 2008-09 mortgage meltdown, told MarketWatch in a Wednesday interview that the current set up has led him to a grim forecast for the economy and markets.

“The conclusion has to be that this is the most fragile point in global financial markets since the eurozone crisis in 2012, and potentially the start of the Great Recession in 2008,” he said.

Pal says the U.S. dollar’s relative strength, measured on a trade-weighted basis, is rippling around the world, particularly as global central banks adopt easy-money policies that appear to be more accommodative than even the U.S. Federal Reserve, driving local currencies lower against the buck.

MW-HO978_trade__20190807133501_NS.png?uu

The dollar is hovering around its highest level since 2002 as of July 31, according to the most recent data from the St. Louis Federal Reserve via Fred on the greenback’s trade-weighted strength against other major global currencies (see chart attached).

A Wednesday note by currency strategist at Bank of America Merrill Lynch said currencies, or foreign exchange, have become a prominent theme for all assets now. “FX has moved from the sideline to the center stage with escalating trade tension,” said BAML analysts including David Woo, Claude Piron and Adarsh Sinha.

 

On Wednesday, government debt yields plumbed new depths after central banks in Thailand, India and New Zealand cut policy interest rates more than investors expected. Concerns also mounted after Germany reported lower-than-expected industrial production for June, pushing the country’s 10-year sovereign debt, known as bunds TMBMKDE-10Y, +4.71%, to record lows at around minus 0.58%.

The surprise move by the central banks helped to drive the New Zealand dollarNZDUSD, -0.1234%, known as the kiwi, down 2% against the U.S. currency at its lows, and briefly put the Australian dollar AUDUSD, -0.2646% under severe pressure in early Wednesday action in New York.

Pal, a former Goldman Sachs trader, who also co-founded Real Vision TV, says this backdrop of weakness in global currencies has been a key driver for the downbeat mood in markets.

The $5.1 trillion currency market is the biggest of all financial markets and the majority of trade is conducted in bucks, so the “movement of the U.S. dollar is the most important financial input to the global economy,” Pal told MarketWatch.

A focus on currencies and its impact on global economies and markets intensified earlier this week after the China’s onshore yuan USDCNY, +0.0000%  sank to a record low of 7.1 per dollar, breaching a so-called line in the sand for the monetary unit of the world’s second-largest economy and indicating that Beijing may be prepared to unleash a variety of tactics to combat the U.S. in a yearlong tariff dispute.

Read: Why a falling Chinese yuan crushed the stock market and intensified the trade war



#5 dTraderB

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Posted 08 August 2019 - 04:33 PM

  1. Best NYSE breadth since 1/4 More

  2. Naz had more new lows than highs today. Amazing.



#6 opinionated

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Posted 08 August 2019 - 05:32 PM

Tuning my Cycle charts I think this top these people talked about,... Quoted  

 

IMHO are a bunch of noise.  The highs at least for the next 3 months has been seen,  I had two cycles a minor that I posted in several blogs (One On Stocktwits) I post all my trades that one topped on 7-30 I said weakness until the 5th-6th then A rally until the 12-14th at that point the second and longer cycle kicked in and It was (Is) one exactly like the one the first week in Oct. 2018 I would not consider a long after the 13-14th As I think some event is going to Rock the Markets hard and will be prolonged until about Oct 21st to the 31st. There will be brief bounces but only to catch the bulls then roll over to the next level. I see an eventual 2474 target.   I am long now and have been at 2790 ish ES and added to that long yesterday morning in DRI 120c Exp 8-16 @ 116.50 Both positions are being very kind to me.  My targets since that entry were/are 2952-2978 and my target for DRI is 124-125.50 I really hope we hit those numbers tomorrow so I can go out the weekend flat waiting for the 12th to go full short. After the 12th I would not under any circumstances hold an over night long position unless your prepared for a morning gap down that will shock many bulls an bears alike.  Anyways that the Road Map....  We're half way there....  I really hope some will fade this 110%  Good Trades DTrade...  



#7 dTraderB

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Posted 08 August 2019 - 07:18 PM

Tuning my Cycle charts I think this top these people talked about,... Quoted  

 

IMHO are a bunch of noise.  The highs at least for the next 3 months has been seen,  I had two cycles a minor that I posted in several blogs (One On Stocktwits) I post all my trades that one topped on 7-30 I said weakness until the 5th-6th then A rally until the 12-14th at that point the second and longer cycle kicked in and It was (Is) one exactly like the one the first week in Oct. 2018 I would not consider a long after the 13-14th As I think some event is going to Rock the Markets hard and will be prolonged until about Oct 21st to the 31st. There will be brief bounces but only to catch the bulls then roll over to the next level. I see an eventual 2474 target.   I am long now and have been at 2790 ish ES and added to that long yesterday morning in DRI 120c Exp 8-16 @ 116.50 Both positions are being very kind to me.  My targets since that entry were/are 2952-2978 and my target for DRI is 124-125.50 I really hope we hit those numbers tomorrow so I can go out the weekend flat waiting for the 12th to go full short. After the 12th I would not under any circumstances hold an over night long position unless your prepared for a morning gap down that will shock many bulls an bears alike.  Anyways that the Road Map....  We're half way there....  I really hope some will fade this 110%  Good Trades DTrade...  

 

Still not seeing the typical extreme sentiments for a top. But there is exuberance, not 100% irrational, and many are congratulating themselves on picking the bottom

I still maintain only the FED can save this market with a 50bps and opening the QE spigots. That rally may last until October.



#8 dTraderB

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Posted 08 August 2019 - 07:18 PM

Good chart. A bottom made in 3 days; a top can also be made in 3 days !

 

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Here is a chart I showed in my Daily Edition on Wednesday. It makes a pretty good case that there has been a sufficient sentiment washout to mark an important price bottom.

EBezULFVAAAGxG9.png
3:29 PM - 8 Aug 2019

Edited by dTraderB, 08 August 2019 - 07:19 PM.


#9 dTraderB

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Posted 08 August 2019 - 07:22 PM

 Again, this was made in 4 days, hence a top can also be made in 4 days!
 

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The markets have been volatile, so we've unlocked this morning's premium blog post for a limited time. Click to get a look at one of the features our premium members have access to. Thursday Color - Islands, Emerging Streak https://www.sentimentrader.com//blog/thursday-color-islands-emerging-streak-breadth-signs-of-anxiety-gold/  via @sentimentrader

 

1565276044369.jpg



#10 dTraderB

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Posted 08 August 2019 - 07:40 PM

I join the crowd waiting on the main evening event: the PBOC YUAN FIX at 9:15pm EST

 

Hope this does not last too long or it becomes dull & boring