Assessing the state of the market 5/20/17

 The main things to see here are that the long-term trend remains up. Also SNP earnings are above their 12 month average. Unemployment continues downward although we are reaching the limit of what to expect. And finally that rates are still effectively stimulative in real terms. Once the fed funds rate gets close to or exceeds the two-year bond you will know that the Fed is announcing the end of the party. 

Here you see that reviewing internals through the summation indexes reveals that /nq or ndx remains the place to be.

Dow theory is really old school and I only follow it out of nostalgia. But notice the 8% difference in performance between the industrials and the transport. Hmmmm…

Finally. Yield spread. Orderly. 

Risk appetite spread…

More to come…

Finger-tape Chronicles

Confession: I am in an abusive relationship. I’ve been obsessed with Brazilian Jiu-Jitsu for six years. It ranks right up there with surfing and rock-climbing in terms of people willing to live in a van in order to do it full-time. I tell stories here about the struggle. For the struggle is real…

Trade Log

This blog is for entertainment only. I am NOT recommending you to trade futures. Hire a pro. Do not pay 2 and 20.

5/19/17 Partially closed /nq positions — booking profits — still long oriented. Breadth is thinning.

5/10/17 Bought some AAPL puts. Got to hedge. Mr. Market gets carried away with coke and strippers. Expect to lose $. Still. Don’t call it a hedge fund if it doesn’t hedge.

5/2/17 Long /zn as a static hedge against geopolitical craziness. Currently enjoying some return. But I don’t care if I lose here. I’ve got to sleep at night and America is in grip of an intemperate blowhard. Character is destiny.

3/28/17 Long /nq again. Back to max risk exposure

3/13/17 Partially closed /nq — booking profits

1/17/17 Long /nq — reentered after booking profits from early nov election rip, which I did not believe in and had to hold my nose to buy.



Important Futures Trading Disclaimer

Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures, options, currencies, or any type of financial derivative.

Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.

High Risk Investment

Trading futures and foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. Think Global Macro is blog, and as such will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

The content on this website is subject to change at any time without notice, and is provided for the sole purpose of education and/or entertainment.

The goal is to ride winners, not pick winners. Because unless we have opportunity to get in early, in the first rounds of the capital structure, our money is not locked up. We can switch horses in the middle of the race. Admittedly, most of us fail to do well here. But that is the goal. So currently the race all about

1.) Internet of things

2.) Machine learning (think AI or robotics)

3.) CRISPR and related genomic fields (nearly impossible to find easy trades because of government regulatory involvement.)

4.) Monetizing big data


— Beliefs are a mixture of assumptions, the narratives we tell ourselves, memories, influences, with a small amount of actual data stumbling about like drunks in church.

Worth considering 

Google’s New AI Is Better at Creating AI Than the Company’s Engineers – Futurism
The story above points out the difficulty of investing in emerging markets. But portfolio volatility maybe the necessary price we pay for Alpha going forward. A world awash in bank reserves (if not money supply, which is why no inflation and slow growth) has seemingly dampened volatility in developed the markets 

The Stock Picker Behind the S&P 500

Story above reiterates an exhausting truth –there is no passive investing. But go ahead keep deceiving  yourself It’s Not Just Chris Cornell: Suicide Rates Highest Among Middle-Aged Men – 20m ago The news that 52-year-old Seattle grunge rock icon Chris Cornell had killed himself after a concert in Detroit shocked and saddened fans of the Soundgarden frontman.

The crisis of meaning continues. It is somewhat like a neo nihilism. As if a generation wants to say –nothing matters enough to change anything. Tragic.
Good research. The next time you hear someone say with breathless tone that household debt  is at an all-time high. Enjoy a moment of snooty insight and say to yourself “yes, but debt to income is shrinking.” Nerds just want to have fun too.

Worth understanding (reading)

Opinion | China Is the Future of the Sharing Economy – Bloomberg
Robots Taking Over U.S. Factories Imperil Emerging-Market Growth – Bloomberg
If the above story proves to be true. Utility stocks may lose some of their predictive function in systematic training.
Most of us have been riding the trend in the above story. Tim does great job as usual on research. There will be yet another ETF based on this work in three, two, one,…
The above story is good news. China has surplus construction materials and will have more as they continue tightening their credit. Pakistan needs increasing openness to speed up the Idea Cycle which will help them have a religious reformation.
David Brooks is the best columnist in the world. That’s all.