Tuesday, September 29, 2015

Bear market still has much more downside risks

THE S&P: How Ominous Is This Chart? There are still many who deny that this is a bear market, but it is that and we fear that it has a good distance to the downside yet to travel. Merely to get to “The Box” shall take the S&P to 1420-1550! Rallies are to be sold; weakness is not to be bought.

CRUDE OIL PRICES ARE WEAKER OF COURSE as the trading world is in liquidation mode but we cannot and we will not be bearish of crude when the term structures move bullishly even as the price of a barrel of crude weakens. Since last Wednesday morning when crude oil prices were effectively $2/barrel higher than they are today, the averaged front month contango has held absolutely steady at $6.07. Under normal  circumstance, a $2/barrel break in prices would send the contango out, and out rather sharply. More interesting is that prompt delivery WTI has actually gone to a small backwardation and we’ve not see that in quite some while. Further, since Friday, with WTI and Brent down perhaps 75/barrel weaker, the contango has narrowed by 37. This we find very, very interesting.

NEW RECOMMENDATION: Perhaps we are very wrong, but with the contango in WTI narrowing even as prices weaken we think the crude has made its low and we wish to be a buyer… of November WTI this morning $44.63. We wish to risk no more than 2% on the position on a closing basis, or to $43.75.


via http://www.zerohedge.com/news/2015-09-29/why-market-poised-rebound-gartman-says-bear-market-will-take-sp-1420-1550

Monday, September 28, 2015

VW incident a loss of face for German manufacturing and Auto industry

The loss of face by Volkswagen is extraordinary. The impact upon the German economy, and by extension Europe generally, shall be material.

via WSJ

Friday, September 25, 2015

Gold is higher because of Mario Draghi comments

Gold has been in a phenomenal, unending, malevolent bear market since November 2011. If you have owned gold in dollar terms it has been a terrifyingly bad trade.

There's a real strength in the gold market when you look at it in non-U.S. dollar terms. The difference is enormous.

Why Gold is rallying higher

I think what we are seeing is that the monetary authorities have no choice. They're fighting a deflationary trend. Draghi's comments yesterday saying again he would do everything he could to fight the deflationary tendencies .... to me was the precursor for the rally in Gold. 

Tuesday, September 22, 2015

Impressed by US Dollar strength recently

In the end, the Bank of Japan and the ECB shall have to trump the Fed's easier policies with even easier policies of their own. In the end the dollar's longer term bullish trend shall prevail.

via benzinga.com

Thursday, September 17, 2015

No idea if the Fed will raise or hold rates

So then, what do we think the Fed shall do? We’ve not the faintest idea and we openly admit that fact. What the Fed will do and what the Fed should do are two wholly separate issues, for we believe strongly that the Fed should have begun to process of “normalizing” rates two years ago and has erred in not having done so, but at this point perhaps it is prudent to wait one or two or even three more months “just to be sure.”

The question is, were we voters on the FOMC what would we do? And the answer is, we’d probably vote to hold rates steady but we’d use the clearest and more certain language available to us to assure everyone that rates almost certainly will move higher before the year’s end. Further, we’d make certain that everyone in the markets knows that we needn’t call a press conference to make a change in the o/n funding rate and that it can… and almost certainly will… come as a surprise when the data has forced us to act.

via http://www.zerohedge.com/news/2015-09-17/what-fed-will-do-today-gartmans-take

Tuesday, September 15, 2015

I want to be long Bonds and short Stocks

Everybody you know is bearish of the bond markets, everybody thinks the Bond market is going to collapse........


The trade I want to do is own the Bond market and be short of the stock market. It's a spread trade.


I want to be short of stocks for the next week, 2 weeks, 4 weeks, 5 weeks, I think that's the trade. I think the Fed will probably tighten before the end of the year. 

Thursday, September 10, 2015

Still flat and nervous

We enter today effectively net market neutral, holding the same position we have held wherein we are long of the same “tanker” stock and long of a small position in coal shares while “short” of derivatives and at this point we see no reason to believe that we shall be changing that position today; however, the randomness of the market’s movements makes even that statement seem disingenuous. 

We are indeed “Flat and nervous,” and that seem quite reasonable and rational under the circumstances.

via ZeroHedge

Wednesday, September 9, 2015

Market moves wearing out professional traders

I'm trying to be as flat as I possibly can and I'm nervous. I was modestly net-short of the market. Its a momentum driven market and as Doug Kass says "a market without memory".

In our retirement fund here at TGL… the only money which we manage directly… we came into yesterday’s session decently net short; not aggressively so, but not marginally so either. 

However, it made no difference; we were short in a rampaging bullish move and we had no choice but to rush to cover much of the net short position immediately upon the opening of trade on the NYSE.

Within moments of the opening we had reduced that net short position almost entirely. Would that we had had the temerity and the foresight to have reversed our derivatives position entirely, but we are neither that insightful nor that heroic.

Today, almost certainly we’ll be covering in a bit more of our derivatives position and at the same time we’ll be buying more of our single “tanker” stock to take our “net” position to one that is modestly, marginally net long. We’ve no choice. The market has spoken and it has  spoken loudly.

via zerohedge, cnbc

Tuesday, September 8, 2015

25 percent correction could be ahead

THE S&P IN MONTHLY TERMS: Trend Line Support, We Fear, Is A Very Long Way Down: This is a sobering thought, but this chart… which we included in our commentary yesterday… should give everyone a case of very real concern for support for the S&P is several hundred points below where the market closed on Friday. Strength is to be sold into.

Repeating from yesterday’s commentary…which we are doing here this morning because such a large number of our readers are here in the US and Canada and likely did not see yesterday’s comments… we ask the simple question: How far down do we expect this bear market to run? Our answer is that we can imagine that the S&P might make its way all the way down toward 1600 which would simply take the market back to the trend line going back all the way to the “generational” lows in ’09. That would be nearly a 25% correction from the highs made earlier this year and within the great scheme of bear markets past this would be quite normal and would certainly not be anything out of the ordinary.

We remain here at TGL (The Gartman Letter) modestly net short of the market generally and we’ve no intention of changing that focus other than to become a bit shorter still as time and market conditions demand.

There is no discrimination in bear markets. They are “equal opportunity” destroyers.

via www.zerohedge.com

$100 crude oil prices is not happening in my life time

We have turned finding crude oil into a manufacturing operation. As more frackable energy sites are discovered, the more obsolete oil will become. We're not going to see $100 WTI again in my lifetime.

Friday, September 4, 2015

This is a real BEAR MARKET

Stock Market

I do think we are in a real bear market. The rallies that we have seen have been in the equities volume on declining volume, the breaks have been on advancing volume. 

I'm afraid that this is a very real bear market and I'm afraid that most people are not prepared at all for it. There's been very little public selling thats going on. I think this is very dismaying.

Rallies are to be sold. End of discussion.

Current Positioning in stock market

I trade only for my own account. I'm long some tanker stocks because that is some sort of a bet on declining prices of crude oil, but at the same time I am short derivatives to get myself on balance slightly net-short of the stock market.

Crude Oil 

Two weeks ago I was very bullish [on crude]—I'm not anymore. If crude oil continues to fall, that will argue that demand is declining, that will argue badly for the economy in general and I think that's one of the coextensive indicators of a bear market in the equities market

Tuesday, September 1, 2015

Carl Icahn, Stan Druckenmiller reveal bullish gold trade

Greece, thankfully, remains in the “wings” of the international stage and for that we are grateful for we’d had our fill of Greek related events and trading environs over the course of the past several months. However, just because Greece has moved off the center stage and away from the klieg lights does not mean that the problems there have been resolved for clearly they have not been. Elections are coming next month and wholesale realignments within the Greek Parliament are almost a certainty. We do expect that Mr. Tsipras will be the next Prime Minister, but his “party” shall be wholly different than the Syriza Party of recent vintage. He has been abandoned by his own far left-wing, many of whom have moved off to form their own independent far left wing organization, but he seems capable of forging a better working relationship with the political parties to his right and in the end shall remain the Prime Minister.

Also in the end, we’ve not seen the end of Greece’s fiscal problems for certainly they’ve not been resolved even modestly. The Greek tax payer will remain as reticent about honestly paying their taxes as they’ve been previously, although with better government surveillance they will have to pay more than they’ve paid previously, they will simply “cheat” less. Too, the government will remain manifestly left- of centre and that of course means that the “austerity” forced upon Athens in recent months and years shall in the end be shunted aside. Further, Greece and Russia…two nation’s allied by religion… shall find themselves turning to each other, to the dismay of Berlin, Paris, Brussels and even Washington. In all, the problems that were Greece and which so dominated the news in recent months and which has subsided for a while will soon come back to the fore. Count on it.

As for gold, we are fascinated by the fact that Carl Icahn has begun taking an interest in the gold market by announcing that he’s taken a rather sizeable position in Freeport-McMorRan. This follows the recent disclosure that Stan Druckenmiller has recently taken up a sizeable position in gold [GLD ETF].

We are quite certain now that the lows made in US dollar denominated gold several weeks ago at $1075-$1085 are important lows that likely shall not be violated.

via http://www.etftrends.com/2015/09/greece-good-riddance/