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Macroeconomics

DXY - Dollar Squeeze into Q4Idea for DXY: - Why there may be a dollar squeeze into Q4 2021: - June 30, G-SIB banks begin stock buybacks. - Capital returned to investors nearing $200bn as estimated by Barclays. - $200 billion less of banks’ demand for reserves, Treasuries, MBS, and deposits. - "With a 5% SLR minimum at the holdco level, banks run 20-times leverage, which means that $10 billion in stock buybacks means $200 billion less of banks’ demand for reserves, Treasuries, MBS, and deposits" - Zoltan; That's 20x leverage = $4T of leveraged capital. - $1T o/n RRP usage continually drains systemic liquidity. - Zoltan: " So the sterilization of reserves begins, and so the o/n RRP facility turns from a largely passive tool that provided an interest rate floor to the deposits that large banks have been pushing away, into an active tool that “sucks” the deposits away that banks decided to retain." "And here is why the problem is similar to the repo crisis of 2019: soon we will find that while cash-rich banks can handle the outflows, some bond-heavy banks cannot. As a result, Zoltan predicts that next “we will notice that some banks (those who can not handle outflows) are borrowing advances from FHLBs, and cash-rich banks stop lending in the FX swap market as the RRP facility pulled reserves away from them and the Fed has to re-start the FX swap lines to offset.” Bottom line: whereas previously we saw Libor-OIS collapse, this key funding spread will have to widen from here, unless the Fed lowers the o/n RRP rate again back to where it was before." "the Fed turned “unlimited” quantities into “money for free” and started to sterilize reserves." "we are witnessing the dealer of last resort (DoLR) learning the art of dealing, making unforced errors" - China consumer spending as a % of GDP was only 54% last year (2011-2019 avg. of 53%) vs consumption in advanced economies averaging 70-80%. - YoY % deceleration means stagflation/deflationary positioning. - China has been the global economy driver since 2008, and were first to tighten monetary policy, so this a more accurate assessment of global economic health. - Spending problem in China fuels the demand for USD and US bonds, as they are seen as more secure than other DM/EM debt. - Previously forecasted the DXY Bounce in May: - Price is in sync with the Technicals: Predict 6000~ pips DXY squeeze into Q4. GLHF - DPT
TVC:DXYLong
by UnknownUnicorn1043646
Black Swan - Inflation is TransitorySpeculation for Macro: I argue that price and consumer price inflation do not influence equities as much as the dollar. Investors who are betting on stocks because of 'inflation' will be in for a shock. Yields indicate we may be entering stagflation. Economic slowdown and rising dollar will prove a stronger force than consumer price inflation. After all the Eurodollar market is the market. Not used cars, not meat, not even gas. Investors going on margin to buy stocks because of the inflation narrative are making a grave mistake. (Monetary) Inflation and QE are frauds designed to get force investors into riskier assets and distribute risk onto them. QE does not lead inflation. Credit leads inflation. QE is just a swap of reserves, so even if media is blaring that Fed is 'printing money' and 'hyperinflation' it does not leave the banking system. In fact, commercial banks hoard it all. We can see by reverse repurchase agreements that banks are stuffed with money and would rather take the overnight rate than trade it for risk. Money enters the economy through lending by the commercial banks. QE does reduce volatility by backstopping banks and guaranteeing solvencies. For a time, it forces investors into higher risk assets to search for yield. It affects investors' psychology and creates speculative bubbles by making them believe they are hedging against inflation. Jerome Powell was even mentioning the VIX in one of his interviews. They watch that. What is inflationary is credit. Investors, being deluded into complacency and invincibility, will take loans and buy more and riskier assets backed by lower quality collateral. We are not just talking about stocks either, but people will buy bigger homes, better cars, etc. More risk and more liabilities. All will be paid back. We know that the global credit impulse has peaked and China's Credit Impulse has turned negative. The Credit Cycle is reversing and debt will be called. Debtors at the front of the curve are harvesting their liabilities, and it will create a collapse in the credit bubble. Credit leads the economy. Credit is going down. Recession is coming, as indicated by yields. M2V has collapsed and is not even shown anymore. While seemingly complex, the economy is just a series of transactions. Low velocity of transactions is deflationary and signals a demand for the dollar, rather than goods or services. Furthermore, QE has a side effect of reducing the top tier collateral (US Treasuries) from the system. When the credit bubble collapses, the low quality collateral which investors have been forced into will suddenly become illiquid and bidless. The dollar actually rises with QE and the Fed Balance sheet (especially since 2008): Investors, particularly foreign sovereigns need the dollar to hedge US investments and creates more demand for it. It is the Eurodollar market that drives the price of the dollar and the global financial market. Just an aside, the Eurodollar market is all digital, it is the real Bitcoin. Sovereigns want dollars not Bitcoin. It is the Eurodollar market which drives risk-taking and currencies. QE is a tiny drop in the ocean. While certain commodities are heating up and there is a lot of 'news' about demand and supply chain shortages, I believe that commodity demand will rather decline to follow the price of the dollar, not the other way around. Shortage expectations are assuming a nation running at full capacity, but productivity is slowing and the labor market is revealing tightness. Shortages are typically followed by gluts. News follows price. Watch for big busts in 2022 similar to lumber in many commodities. It is more a speculative bubble, rather than a fundamental one. Credit leads the economy, which leads dollar demand, as banks and sovereigns hoard it because they know recession is coming. Real rates will continue to fall, offshore dollar shortages are showing, as massively leveraged businesses like Evergrande collapse, and it may only be just the beginning. It is a Lehman moment for China. With defaults, there is more forced demand for the dollar. When dollar demand rises to uncontrollable levels, there can be no more lending, and there will be a cascade of insolvencies by junk bond issuers. At this point, yields may indeed spike. The dollar will continue to rise, and the only thing that can stop it is the US defaulting on its debt. Watch for the debt ceiling, but remember that has been raised almost every year for 100 years. Technically, the dollar is in a demand zone, with a double bottom and testing resistance. Unless the debt ceiling is not raised, I doubt it will go back to 80. When dollar demand rises to uncontrollable levels, there can be no more lending, and there will be a cascade of insolvencies by junk bond issuers. Being long inflation, you are basically short the dollar right now. This cascade can happen slowly... then all at once. Fund managers are FOMOing into risk, as you can't miss a quarter by being bearish if you are managing money. Damn the consequences. When it blows up, everyone will blow up, and they will be bailed out anyway, right? You aren't in a worse position than anyone else. However, when it ends, everyone will want out, and fast. The first one out wins. My point is that credit contraction, followed by a rising dollar which is about to break out will crash this bubble. The bottom line is that there will be a collateral squeeze, as there is more that has been lent out (leverage) vs the high quality collateral that creditors desire, as indicated by margin debt at ATH... While retail believes that the opposite is happening and they willingly destroy themselves by taking on risk for collateral. What is so different from now than 08? NFTs and cryptocurrencies are similar to the CDOs of subprime mortgages. They are just highly leveraged packages of lending backed by low-quality collateral, or even nothing. The product, or ticker, might change, but they are just units of credit, which are dictated by the Credit Cycle. I've been hearing that the market can't go down until there is a blowoff top. What do you think this is? When it comes to debt, you can't just 'not pay it back'. Federal budget deficit doesn't have much to do with it. The money that is 'printed' by the Fed is just hoarded by banks, and Treasury and Fed are separate. However, more Treasury debt just means citizens pay more in taxes, as it is paid for by tax revenue as it matures. It will only increase the cost of borrowing for corporations, causing more downward pressure on the economy, which will make banks hoard even more. Again, on top of that you have default risk (watch the debt ceiling), and reduced government spending outside of debt servicing. Military, social, and economic influence will decline. China just continuously buys US debt to devalue the yuan and gain a trade surplus. Increasing the US federal deficit will increase debt servicing and decrease military spending, and in the case of a default, while China will lose revenue, they will gain share of global influence. That's the game that's being played between them, so you can't just default. What happened in Afghanistan? In the end, it's really all just a ruse for those that lead the Credit Cycle to harvest more wealth and assets. Since when did people believe markets can't go down, Fed has your back, you have to be in stocks to beat inflation. It's not different this time. There is nothing new under the sun. I guess you could say that inflation was an attempt to use credit to boost the underlying economy, which failed. The real black swan will be a deflationary shock. "Inflation is transitory." - Jerome Powell GLHF - DPT
TVC:DXYLong
by UnknownUnicorn1043646
17
COVID IN THE USA: REALITY IS A HARSH PLACETradingview has some amazing data on COVID. This chart is of importance for long term investment purposes (see fat disclaimer below). Importantly this is about total of all cases infections and deaths. Some may say that's meaningless. But there are important features on the chart. Say what you see! I'll say what I see. If the war on COVID was being won, one would expect to see at least clear plateaus. That makes sense because it means there is no massive set of new cases to increase the total. I hope folk get the point. Watch the red arrows. 1. On death total - it's accelerating. Certainly no plateau. 2. On case total - it's accelerating. No plateau. Of course this does not mean that the numbers won't plateau. The point is that the trajectories and the power of the numbers means they're not winning the war. A plateau would probably have been expected in the post-vaccination era. Some say, the plateau is coming soon. How would they know. Do they know the future better than everybody else? All I know is what I see: There are no plateaus. Do we stay with evidence or do we believe rhetoric repeated in lamestream media? Well, the choice is yours. Disclaimers : This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions intended to assure you of an advantage. No predictions and no guarantees are supplied or implied. The author trades mostly trend following set ups which have a low win rate of approximately 40%. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
C
by Captain_Walker
4
Macro - BDRYModel has given entry signals for Dry Bulk Shipping: - The investment seeks to provide investors with exposure to the daily change in the price of dry bulk freight futures. - We expect a boom in the shipping and freight sector with the pandemic backlog, and nations increasing their industrial production to meet new initiatives. - We are very excited about opportunities in the commodities and shipping sectors, as we believe a macro turn is approaching in the nearest future. - Technically has broken out of a channel, retested the support possibly finding a new channel top. GLHF, DPT Disclaimer: We absolutely do not provide financial advice in any shape or form. We do not recommend investing based on our opinions and strongly cautions that securities trading and investment involves high risk and that you can lose a lot of money. Loss of principal is possible. We do not recommend risking money you cannot afford to lose. We do not guarantee future performance nor accuracy in historical analyses. We are not registered investment advisors. Our ideas, opinions and statements are not a substitute for professional investment advice. We provide ideas containing impersonal market observations and our opinions. Our speculations may be used in preparation to form your own ideas.
AMEX:BDRYLong
by UnknownUnicorn1043646
Baltic Dry Index UpdateThe Baltic Dry Index Continues to soar following my call for a breakout at 3,200ish (July 2021). I think the BDI remains a good indicator right now for a few reasons: 1. From a technical perspective, it is behaving exactly as expected (hence the call from 3,200 - it was an easy read) 2. The breakout and move higher is consistent with a bottleneck in global shipping 3. The #bullish price action is yet another harmonious variable in my view of the global macro repricing; although I am still treating the idea of "re-pricing" as a theory. I am going to not this as a continued long until we reach the 4,700 threshold; at that point, we can reassess.
INDEX:BDILong
by ChiefMacro
2
Thoughts on macro conditions for European banksIt is no secret that in the Basel III era, the core profitability of European banks has not been satisfactory. While European banks' return on equity is not even close to the pre-07 levels and falls short on their cost of capital, US banks enjoy double-digit ROE and significantly higher valuations. This mismatch made me wonder whether the current macroeconomic landscape gives EU banking some hope for a rebound and closing the US-EU profitability gap. At the first sight, forward-looking macro indicators seem to be favourable for EU banks. GDP growth rapidly accelerated after the 2020 slump, inflation is remarkably high and the central bank will have to increase interest rates sooner than later. But still, return on equity and consequently, valuations of European banks still look quite modest when compared to their US equivalents. The underlying problem behind the profitability underperformance of European banks is overcapacity. Competitive pressure is high and additionally, banks have to deal with the increasing fintech sector. The problem could be targeted by the supervisors (higher capital requirements for new entrants, lack of “credible integration plans'' etc) but market forces are necessary to successfully combat low concentration. Historically, the years following implementation of more strict regulation (Basel III) should result in decreased profitability of banks (no surprise) and consequently more movement towards higher market concentration. However, last year M&A volume in European banking was far from impressive. According to the KPMG European Banking Consolidation report, the volume of mergers and acquisitions involving European banks in 2020 reached its lowest level since the 07-08 crisis. To be clear, a strong downtrend in the M&A volume has been observed since 2010 so the COVID-19 outbreak in 2020 was not a direct cause. The current financial landscape seems to be favourable for mergers and acquisitions volume increase. Low interest rates, relatively cheap bank equity, loosening of M&A regulation and need for restructuring in response to digital transformation. Thus, forecasts for the M&A volume in banking are relatively generous. The exogenous determinants I described are only a fraction of the whole banking landscape. Bank-specific factors and digital transformation are equally valid components. Nevertheless, bearing in mind the historical tendency of banks to concentrate more in response to new regulations and promising M&A volume outlook, I am optimistic.
XETR:CXPBLong
by UnknownUnicorn27189777
💡🎓1929-2031: The Fractal Macro Economic Expansion Cycle🎓💡The 2 major Expansion Cycles of the 20th Century, both expanded exactly +2509%. & both over exactly 18 Years from ATH Breakout!! In this analysis, I compare the size and duration of the 2 major economic expansions cycles of the 20th Century, identifying the key components of each individual cycle to draw Observations, Parallels and Predictions with the 3rd major economic expansion cycle currently happening in the 21st Century. Observations; All 3 Macro Economic Cycles have 4 key Components; Correction A. Crash, Recession & Recovery Expansion Phase 1; B. Breakout from ATH C. Double Micro Wedge Expansion Phase 2 D. Single Macro Wedge Parallels; The 2 completed Expansion Cycles (1 & 2) of the 20th Century both have exactly the same traits; 1. Both start with a Correction: Crash, Recession & Recovery (of varying lengths / %) 2. Both expanded by exactly 2509% by the ATH / Next Correction, compared to previous Low (previous correction) 3. Both expansions lasted exactly 18 years from breakout of previous ATH to next ATH prior to correction 4. Both expansions were broken into 2 Phases of exactly 9 years each , defined by the same following characteristics: a. Phase 1: First 8 years of expansion - Breakout of from ATH, succeeded & Double Micro Wedge b. Phase 2: Second 8 years expansion - A Single Macro Wedge Expansion Cycle 1 & 2 Details Expansion Cycle 1: +2509% / 219 Bars ATH Breakout: 1954 to Correction: 1972 (18 Years) Previous ATH: 1929 Previous Market Low: 1932 Expansion Cycle 2: +2509% / 217 Bars ATH Breakout: 1982 to Correction: 2000 (18 Years) Previous ATH: 1972 Previous Market Low: 1974 Prediction: Expansion Cycle 3 started in 2013, with a Break out from Previous ATH, that was quickly succeeded by a Double Micro Wedge, all leading up to today (September 2021), which is roughly the end of a Expansion Phase 1 of 9 Years (half of 18 Year historical Expansion duration) Expansion Cycle 3; Phase 2 will start in 2022 and last until 2031, during which we could expect to see a major wedge form within the market, combined with a exponential expansion to reach a Market ATH of +2509% in 2031 (compared to previous market low in 2009) that will catalyse the next major market Correction: Crash Recession & Recovery from 2031 through subsequent years. Expansion Cycle 3 Details Expansion Cycle 3: +2509% / 217 Bars ATH Breakout: 2013 to Correction: 2031 (Predicted 18 Years) Previous ATH: 2000/2007 Previous Market Low: 2009 Conclusion; The market is essentially a self repeating algorithm, a fractal!! First defined by Robert W. Brooks in 1978, then first visualized by Benoit Mandelbrot in 1980, this has since been known as the Mandelbrot Set, and can be observed all across complex systems both natural and synthetic, with this mathematic miracle providing the foundation for CGI (Computer Generated Images) so advanced/complex that they can emulate real world expressions of complex natural formations such as mountains, human movement and almost anything you can think of! Yea fractals are awesome, I've seen them a bunch while tripping and have come to understanding of their fundamental role in creating the realities & universe we experience :D I guess the question is, will they play out in the current and future Macro Economic Cycles as well? What are your thoughts? yemala
TVC:SPX
by Yemala
6
COVID-19 - Evolutionary Curve ForecastIdea for COVID-19: - We believe that the fight against COVID-19 has entered the mid game. - Can COVID-19 be beaten in the game of evolution? We think so. Viruses are rational actors, and will behave as a population in the interests of their evolutionary fitness. - While the media's narrative of "wave 3" of COVID-19 has spread and is widely known, Motive Wave 2 of COVID-19 will begin in June 2021 (new wave 1 2 3), which will end at the end of 2022. Speculation: - Global vaccinations and pandemic responses have introduced strong selective pressure on the virus since the beginning of the year. - From summer to the end of the year, the virus will select a new dominant variant to dominate. Expectations for the end of Motive Wave 2 (2022-2023): - Uncontrolled Growth: 1.3 Billion+ infected, 21.8 Million+ deaths. - Infectivity and Vaccine resistance: 900 Million+ infected, 21.8 Million+ deaths. - Lethality: 470 Million+ infected, 16.4 Million+ deaths. - Severity/and or Vaccine resistance (without infectivity): 320 Million+ infected, 10.9 Million+ deaths. - Successful Vaccination: Infection should drop rapidly, but 5.4 Million+ deaths. To model total deaths , we fit the % curve of the moving average: Disclaimer: We absolutely do not provide financial advice in any shape or form. We do not recommend investing based on our opinions and strongly cautions that securities trading and investment involves high risk and that you can lose a lot of money. Loss of principal is possible. We do not recommend risking money you cannot afford to lose. We do not guarantee future performance nor accuracy in historical analyses. We are not registered investment advisors. Our ideas, opinions and statements are not a substitute for professional investment advice. We provide ideas containing impersonal market observations and our opinions. Our speculations may be used in preparation to form your own ideas.
C
by UnknownUnicorn1043646
4
Inflation TradeIn the chart below you have the TIP and IEF the IEF ratio. IEF is Ishares 7-10 year treasury bond ETF and TIP is the TIPs bond etf. On the right side of the chart you have the 10 year inflation breakeven. Now looking at the two you can see that they track pretty closely. Now generally the IEF 7-10 year has a very similar duration to that of the TIP etf. Some people are wondering how to play the inflation hedge as with some of the largest tech stocks P/E multiple compression could pose an issue to high P/E ratio trading stocks. What does this mean, and what is multiple compression. Well what happens as inflation rises that inflation starts to be built into P/E multiples, and as that happens you start to get compression of those P/E multiples this can pose a massive risk to equity holders. So my thesis would be you could short IEF, and be long TIP. This is something to look into, and I believe that spread that you can see below is going to widen tremendously. So it is something to watch out for, and a trade you might want to consider setting up.
AMEX:TIPLong
by tahirg0010
1
Will FED Taper?Fed tightening 10 year surged to almost 3.2% when Powell tried to tighten this can be seen on the chart below. Now following that measure to tighten you see the S&P fall 20% this miscalculation of the FED to increase rates. Powell was out to pop the equity bubble, but again this miscalculation caused them to stop tightening, and on the chart below you can see this was followed by the cutting of rates. Low growth married to market expecting liquidity has allowed us to see huge growth. We are stuck in the circle of asset growth over strong economic growth.
SP:SPX
by tahirg0010
AUDUSD: This could get seriousSome never look higher. I always look higher. I've fond that in general the higher time frames behave differently than those below 15 min, in terms of volatility. The 3D and above time frames (like the weekly) are macroeconomic time frames. They tend to be slow and not as choppy as say 15 min time frame. When stuff happens on large time frames, expect trouble on the lower time frames which they tend to rule over. Large time frames are useful because they can give a steer on where 15 min to 1 hour price movements get into difficulty. Have you ever wondered why price just stops and reverses at some weird point? That's becuz the big boys know what they're doing.
by Captain_Walker
Simple Credit Indicator to Watch Out for Equity InvestorThere is a classic saying that credit markets tend to lead equity markets. The rationale is that credit investors are solely more concerned about downside risk (as they worry whether coupons will be paid and whether they will get their principal back at maturity) and measure risks and determine spreads - over the risk free/benchmark rate - by factoring in the probability of default into the spreads amongst other factors. While equity investors, given their ability to participate on the upside as opposed to debt/credit investor, tend to be more forward looking with an optimistic bias (glass half full attitude). Hence, credit tends to turn first when risk is slowly bubbling in the cauldron. That's what I've been told anyway. Without further ado, if you refer to the chart published, you will be able to see how credit has played out during the past few crisis. Data used are S&P500 and ICE BofA US High Yield Index Option-Adjusted Spread (inverted)
TVC:SPX
by RinjaniCapital
2
BB - BBB spread offers opportunitiesIn a world where everything seems expensive the BB bond still seems Attractive in comparison to BBB rates corporate debt. The BB continues to offer a nice spread 143 BP spread over its BBB relative. Now with that in mind one must remember recently for the first time ever HY (high yield) corporate debt now yields below the rate of inflation, however with the FED backstopping the risk associated with HY by buying up junk bonds it definitely deserves a look. The BB offers a possible opportunity similar to short term yield, but the risk would be classified as closer to investment-grade. As BB is obviously the highest level of HY debt out there. The leverage ratios of BBs are closely related to BBBs. Default rates for BBs also have only been about 50BP higher than that of BBBs. BBs also have a low risk premium in comparison to the rest of the HY corporate debt sector. It is definitely something to look into further.
FRED:BAMLH0A1HYBBEYLong
by mehmetoguz0010
Macro - Reading The CurveForecast for Macro: - Falling Wedge Breakout must be re-tested. - Bear Flattener coming as short-term rates rise with Fed tightening expectations: - 2x ATR spike in US02Y: - The Fed members will probably all have their turn to make comments, leaning hawkish. This should cause a rally in the US02Y. - Bonds Volatility Technically Bullish: - However, this will be followed by a steepener, respecting the Falling Wedge Breakout, as the Fed implements monetary policies to control Deflation, creating a Stagflation environment. - US30Y, this is bearish and deflationary: - USOIL, deflationary. The US economy depends on Oil: - US Manufacturing Employment Index, looks to be at the top of the range, and on a decline: - Capital goods are the heart of every economy. Without manufacturing employment, no capital goods. No capital goods, no innovation. - CN30Y, also bearish and deflationary: - China's Credit Impulse, and consequently - global credit impulse turns negative. - No more credit flows means no more liquidity to flow into risk assets. - M2V declining, if the economy was booming and growing, money velocity should be increasing: - Business destruction cannot be inflationary. Thriving tech businesses lead the recovery, but Tech is inherently deflationary. - Reading the curve will be critical to see the macro turns coming! GLHF - DPT
TVC:US05Y
by UnknownUnicorn1043646
1
Black Swan - US-China Phase 1 DealSpeculation for Macro: - 2018: Trump began trade war with China, and the market had the worst year in a decade (at the time). - 2020: US-China Phase 1 deal is signed, market crashes shortly after. - 2021: Market immediately rebounds and has the greatest bull market in history. IMO it was a run-up then sell the news by insiders, then BTD for the bull run to come. That deal is to expire 2022, and will likely be assessed soon. Check out the behavior of SKEW/VVIX/PCR right before the Trade Deal... Does somebody know something? Even if it is renewed, it is bullish long term but very likely a big flush for insiders to BTD. If China withdraws, it's recession - returning to a situation similar to 2018 with a tariff tit-for-tat except with current supply chain issues, pandemic, massive debt levels, and slowing global economy. One part of the deal entails China refraining from competitive devaluation of their currency. However, US is devaluing their currency through inflation (speculated). That is bullish for US equities, but CNYUSD is now at the top of a range: Should the deal expire, and China devalues their currency, the US will need to respond with more debt. Can the world handle more debt? Phase 1 Deal: www.reuters.com Full text found here: web.archive.org GLHF - DPT
SP:SPXShort
by UnknownUnicorn1043646
8
Macro - Global Inflation Expectations Rolling OverSpeculation for Macro: These are the underlying conditions: - Inflation expectations are what leads risk appetite. After all, who would hold or buy an asset expected to depreciate in value? - Global inflation expectations turning down and have been in a downtrend for decades. Of course it is deflationary. If DEBT fueled GDP growth (for appearances over results) misses expectations vs. the underlying conditions, what can you really do? - AMZN missing expectations is a hint. Bonds and currencies lie less than stocks. Stocks are the last to get the message. AMZN - This is a pattern prevalent globally right now. Look how it resolved in HSI, and now AMZN: - Druckenmiller says that funds position for 18 months in advance. The sell-off in tech and lack of interest is a huge tell. In decelerating markets, sector losers will be sold off heavily. - If you cant stimulate earnings & job growth by dumping money into stock buybacks, then you have failed. You will have price inflation ONLY, but it is not creating GDP growth nor lasting means to do so. Only raising DEBT, and then when you take away QE/negative rates you are left with nothing but high prices, and a big asset bubble. Now, we are to assume that investors will keep bidding up assets that are expected to depreciate in value? No they will just sell, and money managers see what is coming just from AMZN + GDP missing expectations. - When you only have price inflation, but the population not accumulating capital, it will lead to consumers being priced out of discretionaries and demand will decrease. You will revert society back to demanding bare necessities, rather than creating innovation. - You can keep pouring in money through QE, but rates cant go more negative... CBs will just eventually hold all of their own negative yielding debt and keep printing money when nobody is actually giving you money for the debt? How does it create GDP growth when the money they print is depreciating in value vs. existing debt which needs to eventually be financed? - Debt is the deflationary force that money printing is fighting against. They need the economy such that it can eat away the debt without them pouring money into it, but if companies fail to produce increasing revenue while debt is increasing, they have failed. - Then for the next crisis, your are left with no options except to lie down and take it. - Institutional money will begin to sell off as they realize what is happening and data factors begin to confirm this trend. Global Liquidity Providers with a red flag: Softbank: Evergrande: Bitcoin/Blackrock - US equities have yet to factor in the selloff in Bitcoin (Bitcoin is the US liquidity provider/Shadow Bank IMO): - What is the Trigger to actually sell the US equities though? How to action this global shift? Its very tricky obviously, but I am looking at the leaders (FAANG) which have upheld the bull run up till now as hard supports vs. the weakening market breadth. That's why AMZN is an important cue for me. - Asia is the key. As we know, China is attempting to pop their asset bubble, and it is creating a deflationary wave which has reached HK and now Japan. It will spillover to EU and US without question. - You can see the COVID and other fears being set up to be blamed as a 'catalyst' to blame, rather than CB's blatant failure to navigate the crisis. - Of course, stocks aren't the economy... but when smart money realizes that revenue will decline, and no value will be created for them, of course they will sell. i.e. Its going to translate to revenue, innovation, dividends and stock buybacks. I expect a correction at the very least in the near future in US equities, and a big one in the mid-long term. All I can do is short the setups and prepare for the big one. But where will investors put their money then? - Dollars, housing and bonds from the looks of it. Anything to escape the tail risk in equities. Even the junkiest of yields are below inflation as investors seek yield. - It is a bit sinister, because the Fed is buying bonds and MBS's, and eventually it will be returned in theory. So they retain the ability to strike down the havens. When new instruments which are riskier and riskier are created so that investors can obtain yield and institutions can sell their risk to them, it piles on more risk into the system, such that the threshold for a tail event is lowered. That is probably where the liquidity eventually flows to. Just because there is an immense amount of money in the system doesn't mean investors won't sell that risk. When everyone is risk-on, wouldn't it create more yield to just flush risk assets first and then buy the dip? The great Black Swan here is that inflation is indeed transitory. It would mean that even QE Infinity and negative rates cannot stimulate the economy. How it Unfolds: - While M Money Stock has increased, it has done little to reduce debt vs. money, nor increased GDP (growth YoY). - The Credit Cycle is the beginning of liquidity flows. The global credit impulse is negative, meaning new inflationary credit is not created, and eventually, debt will be called instead. Inflation will be destroyed. Debt is at an all time high. - For debt to be serviced, those institutions which have sold debt must now pull liquidity from assets in order to service the debt. While the assets have appreciated in monetary value, they have depreciated vs. debt, meaning that they will need to return more M Money than they borrowed. This means that at the end of it, there will be a money SHORTAGE! GLHF - DPT
TVC:US30YShort
by UnknownUnicorn1043646
35
Market Outlook WeeklyTVC:SPX using a log chart I channeled the market since it's inception. The top of the channel (in red) is exclusively where the major stock market crashes have happened. The bottom channel (in green) is "crash free." The bold purple line is where 3 of last 4 market crashes have happened. Since the "Nixon Shock," $spx has failed to breach this line, except during the "dot-com bubble." U.S. inflation rates are rising, the Buffet Indicator (divide by US GDP on the chart) is at an all time high, and the CAPE (SPX ECY on chart) is starting to. rise, like it has at the top of every crash. However, a major crash has not when CAPE is above that black line, excluding COVID. Note: Not claiming a crash now, just saying there are some warning signals and to be cautious.
TVC:SPX
by StkMktBulldog
DXY 4W/1D/4H : DETAILED CHART Hello Everyone, If You Like The Idea, Do Not Forget To Support With A Like And Comment . Save Idea To Check In Futures Also . We Will Add Fundamental Ideas Also But For Now Focus On Technical Analyze . Let's Start With 4W Chart : Sometimes Basic Things Can Play Big Role On Your Prediction So Please Focus On HH/HL Of Chart . This Stage Can't Go Higher Than 120.128 And For Now Got Heavy Rejection From 102.992 . Double Top Formation Worked But Still Not Finished . Personally Waiting Next Bearish Impulse To Enter Next Stage . - RSI : Already Under 50 Point - MAcd : About TO Confirm " M " Formation 1D Chart : If We Are Going TO Break 94.422 Point We Will See Quick And Impulsive Movement To 94.472 . We See Red Candle At The Moment But We Can Take Power Between 92.628 - 91.796 Range . RSI : Bearish Divergence 4H Chart : Pattern Needs To Break Maximum End Of The July In Conclusion : Personally I'm Very Bullish On DXY But After Fed's Falcon Talks We Sow Some Bullish Impulse . In A Bigger Picture Its Clear That We Are Going To Do LL And Double Top Is Our HH For This Stage . In A Short Term We Can See Dump And Pump But In A Mid Term Bat Formation Is Our Maximum Point Where We Can Touch . Its Hard To Predict Time In TA But Chart Says That 31 August Our Final Day Or Nearest . Important : Please Use RM (Risk Management) and MM (Money Management) If You Decide To Use My Ideas, There Will Always Be Unprofitable Ideas, This Will Definitely Happen, The Goal Of The System Is That There Will Be More Profitable Ideas At A Distance.
TVC:DXY
by Cryptorganism
14
Black Swan - US Debt DefaultSpeculation for Black Swan: - Liquidity being sucked out of the system o/n RRP nearly 1T. - G4 Central Banks' liquidity (B/S YoY %) rolled over globally (Global liquidity peaked and collapsing). - US Debt and global debt at ATH and parabolic. - Global Credit Impulse turns negative. - Global productivity stagnating, through debt-fueled artificial economy. - Rates more negative than housing boom of 2000s. - All asset classes parabolic and market at a 100Y resistance. - "Central banks have bought $900 million of financial assets every hour in past 15 months" - BofA No more room for debt for next crisis. Won't be long now. Debasement of USD coming. en.wikipedia.org www.bloomberg.com GLHF - DPT
TVC:DXY
by UnknownUnicorn1043646
4