Jump to content



Photo

FF: "Bad news is again Bad" PULLBACK - then Dec/Jan rally


  • Please log in to reply
77 replies to this topic

#1 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 19 November 2023 - 05:46 PM

MARKETWATCH: "This is the bad-news-is-good-news narrative so beloved by equity bulls, where the prospects for lower borrowing costs seemingly trump all. But some commentators are warning that a psychological pivot is fast approaching.

Much of this year has seen an inverse correlation where good or hot data was negative for stocks, while bad data was positive. While lower yields are being greeted as a tailwind for now, that is often what happens ahead of recessions, says Jonathan Krinsky, technical analyst at BTIG.

Krinsky examined all recessions excluding the recent COVID downturn over the last 50 years, those in 1977, 1980-82, 1990, 2001 and 2007, and found that for all there was a period where rates were falling and stocks were rallying.
But, ultimately, as the reality of the recession set in, stocks began to fall. Are we at the bad news is bad news inflection point?, he asks.

Doug Kass, the president of Seabreeze Partners Management, thinks we should be. He notes that while the market has rediscovered its ebullience, as exemplified by the rush into call options, the global bond markets and the commodities markets, especially oil, are signaling recession.

The price of U.S crude (CL.1) this week fell to its cheapest since July, while companies as diverse as Cisco Systems (CSCO) and Walmart (WMT) have in the past few days warned of challenging times ahead.

Meanwhile, U.S. high frequency economic data is eroding including weakening jobs data, souring retail sales, the worsening NFIB data and a rising credit card delinquencies, among many other variables pointing in a southerly direction, says Kass.

These factors may not be such a problem if, as note above, stocks hadnt risen so quickly of late, traders werent so bullish and the market wasnt so richly valued.

A deep oversold in late October has turned into a deepening overbought in mid November as a universal view (which is really nothing more than a feel) is that seasonal strength is upon us now, says Kass.


As traders have chased the upside, the equity put/call option ratio has fallen to its lowest level since July. Meanwhile, the equity risk premium the return investors can get when buying stocks relative to Treasurys is down to levels not seen in several decades. says Kass.

The last soft landing in a period of rising interest rates was during the Clinton AdministrationBuying into a recession at current and inflated valuations seems unwise, Kass concludes.

#2 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 19 November 2023 - 05:50 PM

Her poll is bullish 55/45

Helene Meisler (@hmeisler) posted at 2:04 PM on Sat, Nov 18, 2023:
The results are in and folks lean bullish for the 4th straight week. That is the longest streak since January when we went 5.

Thank you so much for participating!!! https://t.co/BDUImZmTWv

#3 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 19 November 2023 - 06:01 PM

Had a good run with HK & CHINESE EQUITIES. Was flat & the opened new LONGS after a pullback.
Still net SHORT US with ES & NQ LONG HEDGES.
Another great week in NQ daytrading, CRUDE, YEN, and TLT
Will REDUCE NET US SHORTS but not too keen on goint to net LONG US this week unless markets plunge

#4 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 20 November 2023 - 06:27 AM

Key developments that should provide more direction to U.S. markets later on Monday:
U.S. Oct leading indicator, Canada Oct inflation
Federal Reserve Bank of England Governor Andrew Bailey, Bank of France Governor Francois Villeroy de Galhau and Bank of Spain Governor Pablo Hernandez de Cos all speak
U.S. Treasury auctions 20-year bonds and 3-, 6-month bills
U.S. corporate earnings: Zoom, Agilent Technologies, Keysight Technologies, TechPrecision, Symbotic, Remark Holdings

#5 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 20 November 2023 - 06:29 AM

NVDA earnings tomorrow. Will start a LONG STRANGKE today & complete ot tomorrow.


REUTERS:

Key developments that should provide more direction to U.S. markets later on Monday:
U.S. Oct leading indicator, Canada Oct inflation
Federal Reserve Bank of England Governor Andrew Bailey, Bank of France Governor Francois Villeroy de Galhau and Bank of Spain Governor Pablo Hernandez de Cos all speak
U.S. Treasury auctions 20-year bonds and 3-, 6-month bills
U.S. corporate earnings: Zoom, Agilent Technologies, Keysight Technologies, TechPrecision, Symbotic, Remark Holdings



#6 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 20 November 2023 - 06:46 AM

"STORMY SEAS AHEAD"

Summary
Inflation has slowed, but the Fed isn't going to react until well after the "target" has been reached.
Investors have a choice between buying stocks or collecting 5-6% risk-free income. That is attractive enough to keep many on the sidelines.
Some analysts have eliminated 'recession' from their vocabulary. However, it remains a threat in 2024.
Earnings have been resilient, and it's the one factor that can keep equity markets stable in the near term.
https://seekingalpha...ormy-seas-ahead

#7 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 20 November 2023 - 07:37 AM

Good stuff from SENTIMENT TRADER: "...Stocks exploded higher on Tuesday after a relatively benign CPI report. The surge saw over 25% of stocks rise by 4% or more, a level historically associated with a positive turning point for equity markets. Comparable upswings presaged a 100% win rate for the S&P 500 over the subsequent three, six, and twelve months. An analysis using sub-industry data over a significantly extended period confirms the bullish outlook, especially when the S&P 500 is in an uptrend like now. If history rhymes, traders should use any short-term weakness to add market exposure..."

https://mailchi.mp/e...llied-4-or-more

#8 12SPX

12SPX

    Member

  • Traders-Talk User
  • 12,771 posts

Posted 20 November 2023 - 08:21 AM

MARKETWATCH: "This is the bad-news-is-good-news narrative so beloved by equity bulls, where the prospects for lower borrowing costs seemingly trump all. But some commentators are warning that a psychological pivot is fast approaching.

Much of this year has seen an inverse correlation where good or hot data was negative for stocks, while bad data was positive. While lower yields are being greeted as a tailwind for now, that is often what happens ahead of recessions, says Jonathan Krinsky, technical analyst at BTIG.

Krinsky examined all recessions excluding the recent COVID downturn over the last 50 years, those in 1977, 1980-82, 1990, 2001 and 2007, and found that for all there was a period where rates were falling and stocks were rallying.
But, ultimately, as the reality of the recession set in, stocks began to fall. Are we at the bad news is bad news inflection point?, he asks.

Doug Kass, the president of Seabreeze Partners Management, thinks we should be. He notes that while the market has rediscovered its ebullience, as exemplified by the rush into call options, the global bond markets and the commodities markets, especially oil, are signaling recession.

The price of U.S crude (CL.1) this week fell to its cheapest since July, while companies as diverse as Cisco Systems (CSCO) and Walmart (WMT) have in the past few days warned of challenging times ahead.

Meanwhile, U.S. high frequency economic data is eroding including weakening jobs data, souring retail sales, the worsening NFIB data and a rising credit card delinquencies, among many other variables pointing in a southerly direction, says Kass.

These factors may not be such a problem if, as note above, stocks hadnt risen so quickly of late, traders werent so bullish and the market wasnt so richly valued.

A deep oversold in late October has turned into a deepening overbought in mid November as a universal view (which is really nothing more than a feel) is that seasonal strength is upon us now, says Kass.


As traders have chased the upside, the equity put/call option ratio has fallen to its lowest level since July. Meanwhile, the equity risk premium the return investors can get when buying stocks relative to Treasurys is down to levels not seen in several decades. says Kass.

The last soft landing in a period of rising interest rates was during the Clinton AdministrationBuying into a recession at current and inflated valuations seems unwise, Kass concludes.

Yay, I'm back after a little over a week holiday!!  Came back straight into family coming for the entire weekend.  It's nice that Dougy is joining in on what I've been talking about for awhile now about that psychological change.  We'll know its flipped for sure when we see bond  yields continue to move down and stocks go nowhere or down.  The added rally this past week was a bit of a surprise but I guess we shouldn't be surprised as stocks are still following bonds and it looked like a soft landing was in the cards.  In the end I don't see that happening at all next year but I think it will be awhile before the Fed starts cutting although the Canadian government is already getting worried about it now as leading indicators here are getting pretty ugly.  For example a poll came out about holiday shopping and revealed that 78% of people are cutting back and 47% are thinking about not buying anything.  My top level banker friends up here are telling me that with mortgage renewals hitting big next year its going to take out a lot of people with having to double their payments as the average mortgage here is $650,000. In America you don't have that problem because when you buy, your rate is set for 30 years but here the average renewal if your not already in a variable is every 5.  Anyhow, overall I think its going to be an interesting end to the year as we move into the last month of trading.  I took profits on my Nasdaq trade posted on here just before I left and didn't do much all week while I was gone but did double down on trades so currently am short the NDX at 15,600 and the ES at 4450 now.  In the end should be a fun week of trading as we go into the American Thanksgivng!! 


Edited by 12SPX, 20 November 2023 - 08:22 AM.


#9 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 17,802 posts

Posted 20 November 2023 - 09:35 AM

Closed 1 NQ HRDGE LONG 15945

Will open ES HEDGE LONG below 4510

Had a good run with HK & CHINESE EQUITIES. Was flat & the opened new LONGS after a pullback.
Still net SHORT US with ES & NQ LONG HEDGES.
Another great week in NQ daytrading, CRUDE, YEN, and TLT
Will REDUCE NET US SHORTS but not too keen on goint to net LONG US this week unless markets plunge



#10 12SPX

12SPX

    Member

  • Traders-Talk User
  • 12,771 posts

Posted 20 November 2023 - 09:37 AM

Well this is interesting adding to my ndx short, now averaging 15728, easy to add to as I don't have much on lol!!