Daily Trading

Daily Trading
Contributor since: 2009
Company: The Daily Trading Report
I have been writing in SA for about three years now, and for three years I have been writing "bullish" articles on stocks. It seems that every time I write an article I get a wave of comments suggesting on no uncertain terms that I am either an idiot, a permabull, or clueless (or some combination of the three).
It is said that bull markets are born in pessimism and that is exactly what we have from a long term perspective.
All the negativity to my articles on SA highlights this high level of pessimism and has enabled me to remain long the Dow since the end of 2008. Thanks for all your help!
Yes you are entirely correct. I was just trying to prove how stupid valuations for equities and treasuries have become.
Yes you are right, ultimately the most downside will occur in JGBs but that may take some time to occur. The biggest movement initially will come from the Nikkei and the USDJPY.
Yes, I have returned, Japan seems very interesting. I think that there is significant upside in Japanese equities. The trick will be to hang on as the market goes up and resist the temptation to "take profit".
I still hold all those positions today...........fortune does certainly favour the brave!
Yes, it was bold especially since I was talking about Japanese equities since just before the Fukushima crisis. I think the bolder call was holding on to my bullish call on Japanese equities right through last year.
Yes we will have another dip but that maybe only after the Dow has gone 20% higher! Too many people are waiting for the next big dip which means it probably wont happen, well not at least until everyone is fully invested again.
Very interesting to see how the cost base in China is increasing rapidly. I guess the days of cheap Chinese goods on shop shelves are fast disappearing!
There is a thing called the internet.........or World Book!
Noted your beliefs............but are they really your beliefs or someone else's beliefs? I keep trying to explain (and because no one is picking it up I am probably doing a bad job of explaining it) that current consumer confidence readings are pricing in an economic slow down more or less of the same magnitude as that of the GFC. Why? well probably because the GFC is still too much in the forefront of peoples minds.
I don't exclude the possibility of further weakening in consumer sentiment surveys. In fact they are likely to continue to deteriorate for a while yet. I am just saying that in the past major bull markets have developed from consumer confidence readings that were higher than current readings. I would be very worried about being bullish when everyone else is bearish if there wasn't support from cheap stocks and expensive treasury markets. Of course there are a few other things as well.
I was looking more at industrial production, capacity utilization, durable goods orders etc for evidence of a slowdown. I see no evidence of a slowdown.
Holding a bullish view over the last 6 months has been very very difficult, at times a little nerve wracking to say the least! Anyway I find it rather amusing how so many writers on seekingalpha.com are flip-floppers. At any sign of trouble they run for bearish cover.
What do you mean by general?
Yes, all the comments to this article confirm what I thought in the first place........it is too bearish out there. Remember "when everyone thinks alike the opposite is most likely to happen". I don't think anyone is anticipating that in say 3 months from now the Dow will be at a new high. Man I love it when no one agrees with what I have to say!
If you have been following what I have been saying in http://bit.ly/prkkP3 you will know that I have not been ignoring "the back end of the market". I have been referencing junk grade bonds and emerging markets all the time. The weakness in the back end is one of the primary reasons as to why I was short EEM against DIA over the last three weeks.
Yes I have been bullish on equities since the end of 2008, I have not flip flopped like many/most other commentators and I have been mostly invested in the Dow. Tell me how much is the Dow down year to date?
they have come down marginally
First of all consumer confidence numbers reflect sentiment and are not economic stats. Secondly the real sorry state of consumer confidence is ultimately will lead to a very bullish outcome in stocks. Bull markets are born in pessimism(when consumer confidence is lowest) and die on euphoria (when CC is highest).
When everyone thinks alike the opposite is most likely to happen. If everyone is positioned for downside in the Euro (which it looks like they are) then who is left to push it down?
The US Treasury thing is driving me mad as well. Today was a perfect illustration of how crazy the market is........PPI, and Core PPI both came in well ahead of expectations, commodities up (that makes sense) but so to were Treasuries! I thought the worst enemy of Treasuries was rising inflation!
Have a look at SIL, perhaps invest in GDX and SIL in equal amounts
We have been long DIA since Jan 2009, I got out at the start of last week then got back in after Thursday last week when the Dow dropped some 5%. As far as call options go most of them are Jan13 exp on Dow components and Utilities. That is the least of my worries. The big thing that has cost me since Jan09 has been being short US treasuries. Anyway the Global Macro Fund is still up some 42% since Jan09
That is an absolutely disgusting comment!
OK then buy TLT short SPY and hold that position for 5 years. I will sell TLT to you and buy SPY from you
OK flip floppers, if you think that the next Lehmans is coming in with Greece defaulting, go short the Euro, long USTs, short the S&P, and short commodities. Then hold this position until year end...........
No one gets the point and that is we all know what happened as a result of Lehman's defaulting (yes every person on the planet). So if word on the street now is that Greece defaulting will lead to another GFC - do you think that the powers that be will let it happen?
The problem with UNG was due to it investing in front month futures of Natural gas and the roll from one month into another. ETFs which invest in underlying stocks don't have this problem as they are not subject to contango or backwardation.
Yes I think the only way out for the US (and Japan) is to inflate/monetize debt (call it what you will). All trades should be based around this notion.
I think one of the ultimate trades would be to be long calls on the Yield of the JGB 10yr with a strike of 2%. Once the JGB yield goes through 2% then there will be a complete implosion in the JGB market. Of course it depends on how much the vol would be on options. It is all theoretical of course because there is no instrument that retail investors can trade to get direct exp to the JGB 10yr
It is not a case of whether or not to be long XAUJPY rather how much leverage you can get away with!
There have been a few people talk about this trade but there are not many. Don't take too much notice of me because I have been bearish on JGBs and the Yen for about two years. Would be interested in learning how to short JGBs (outside of the futures mkt). I think the only way for retail clients to "short" JGBs is to go long Japanese equities (the Nikkei) and long Yen crosses (like the CADJPY or AUDJPY).