Michael Filighera

Long/short equity, momentum, event-driven, research analyst
Michael Filighera
Long/short equity, momentum, event-driven, research analyst
Contributor since: 2010
Company: Logical Signals
Well stated -- but I would add an additional segment that would likely lean on the negative side of interest rates being raised with regards to a bullish or bearish reaction. That would be the record high levels of margin debt. Once rates begin to rise it would begin to cut into profit margins both realized and unrealized. I believe this will ultimately contribute to an escalation of a market sell off. What would your take of this be? Thanks --
Well said James -- here in your comment and above in your article -- and yes - I would agree -- how high? Perhaps bubble high -- doesn't mean you or anybody else is in favor of it - or needs to defend it -- your statement as to what business you are in was spot on -- whether or not we agree with the fact that the equity markets continue to surge higher should not cloud a decision to participate and make profits along the way. Whether or not I believe the S&P 500, DJIA, or NDX is fairly priced or over priced does not amount to much as the buyers flock in to trade. I don't have to agree with current levels to trade --
Point well taken James -- QE4 would not be a positive signal that "all is well". Like yourself I believe the corner the FED has painted itself into will be difficult to walk out of unscathed. At the moment it seems that long bond holders are living a nightmare that conventional wisdom continues to tell them to sit tight - a mistake that will come back to haunt many in the future.
bbro -- yes selloffs did occur -- here are the periods for the SPX - March to August 2004, April to May 2005, October 2005, May 2006, February 2007, and then June through July 2007. I'm sure if you check the same periods for the DJIA, NDX, and Russell you will find they also experienced sell offs --
Oh, BTW --Currently, I don't believe the broader indexes have seen the highs yet.
Well stated Wyostocks --
Tom -- thanks for another great article -- as an analyst I appreciate your insight and depth on inflation, gold, silver, US Bonds, and ECB Bonds -- of course it helps to stand in total agreement as well! Next week should be very revealing as to the various cycles now coming into play. I agree with your analysis on the EUR and the 140 level has returned to the realm of reality.
Tom - great article - well researched. Thanks for presenting many over looked facts regarding silver's monetary implications with respect to gold dominance there. As a technical analyst I have been tracking a corrective pattern in both gold and silver off of the 2011 highs. In gold that pattern has been a "triangle" (classic Elliott pattern btw) which stands a high probability of being complete or nearly so. Silver while also tracing a range bound pattern may also have completed the correction with the next rally phase in its beginning stages.
The inflationary factors that will ultimately burst the remaining economic bubbles (US $ and Bonds) should remain beneficial in pushing precious metals prices higher -- I also stand in agreement with your "initial" targets of $2000+ in gold and $50+ in silver for 2013.
I look forward to reading additional research from you.
Michael
James -- thanks for a well written, well researched and thought provoking article. As the country and DC players emerge from their prospective "bubbles" and increase their anti-depression meds it would be with great expectation that the country awaits their response to the impending "jumping off the cliff" scenario so clearly defined by many.
I appreciate your take on this subject and more objective and in line with your longer term work. Thank you.
Excellent technical analysis -- thanks Matthew!
Roger -- excellent comps -- and a strong point made --
" The job then becomes monitoring the names owned and being on the lookout for serious changes which can include grossly excessive valuations."
Thanks --
Michael
Well written -- brilliant title! Thank you Eric -- your insight is "spot-on" and timely.
George -- thanks for a good article -- after spending the past 2 months on vacation- and free of the market "summer doldrums" - although I admit to scanning SA to feed my info junkie side - your article was the perfect read! I particularly enjoyed your comparison of the S&P 1 and AAPL (very appropriate I might add) --
I look forward to reading more of your work in the future as I add my name to your "followers" list.
Michael
Excellent article James -- I appreciate your willingness to continue to step out and present a clear and important message - one that seems to be lost by so many who don't seem to see the status quo changing right in front of them.
Paul,
HFT trading is huge and provides much of the liquidity within many issues traded on listed exchanges. Computerized trading has become an integral part of how trading takes place these days. As a result the status quo is changing. I have found that most people do not want to hear that the status quo is changing or that a trend change is taking place right in front of them. Why - I suppose there are as many reasons as there are people. In any case my premise is that the status quo is changing and as I quoted "it can not be vetoed". I also have studied cycles on a long, mid, and short-term basis. To deny their existence does not eliminate their happening.

I found your question fascinating - "if you think human beings have any use, or if our time on earth is rapidly coming to an end?" As a person of faith I would have to answer yes to human beings having a use for correct information - I believe that fear (false evidence appearing real) is conquered through educating oneself - being prepared for rather than succumbing to negative thought or actions releases us from the grip of panic and often allows us to be in it - but not of it. I hope that makes sense. To answer the second part of your question I do not think out time on earth is rapidly coming to an end -- for some I'm sure it feels that way and might even be misinterpreted as "the way out" - but it ultimately isn't. The global economies will right themselves - however not without much pain and confusion. I prefer though to be prepared (not surprised) and accept what it may bring and move on.
Paul --
Thanks for your additional thoughts on NYX -- I do stand in agreement with what you've presented! In fact, your analogy regarding "eating lunch" was perfect as was "eating cake".
Thank you for you honest response - it is always a pleasure to have an open dialogue with others who also "do their homework".
Michael
Paul --
Thanks for your comments. I am always interested in hearing what others think or see.
I found your use of the word "terrorism" and doomsday scenario incorrect. It is interesting the labels that get used to invoke fear.
Your statement on the NYX is very true -- but let me pose a question to you - since the NYX is the world's most liquid equities (I question your claim that the NYX also is the most liquid derivatives exchange group - I believe that honor may go to the CME) - in any case -- you are correct the NYX provides clearing and exchange services - and fees are collected on every share or contract that is traded - both from the buyer and the seller - add to that clearing charges - membership fees etc. One would think that the NYX would have participated more robustly off of the 2009 lows. Similar I would think as the DJIA, S&P 500, RUT 2000 or the NASDAQ 100 -- but it hasn't. Why do you think that is?
Your statement regarding government regulation posing risk to market share and operating leverage of the company is in my humble opinion "way off base" -- while the government may impose the regulation - in all fairness it should be included that it was the government that deregulated the markets - the responsibility to enforce compliance should come from regulatory agencies such as the CFTC.
In giving me a jump start -you quote a March 2012 report from S&P restating the obvious revenue generators at the NYX. So again I'll ask you -- if this is the case, which I believe it is in terms of generating revenue. Why is the stock not trading back at the highs seen in 2007? Why has NYX recovered less than 38% of the 2008 - 2009 decline?
I also appreciate you stating your NYX position. May I ask where your stop is?
Again, thank you for contributing to the conversation -- I look forward to your response should you choose to.
Michael
I also agree -- with both Matt and Whitehawk -- volatility will keep "dips" sharp and quick -- short covering may provide upward momentum for a while - if you like trading volatility NG should provide some awesome opportunities -- I tend to turn to UNG to trade --
Absolutely! Thanks for mentioning them. Good volume and volatility - and both trade options as well.
Michael
Thanks for adding to the conversation. It is always helpful to hear what is happening in other parts of the global economy. I am currently doing research on clearing houses in London.
Michael
Thanks Michael -- and thanks for the link to the London Telegraph article and contributing to this ongoing conversation.
Michael
Thanks for the additional companies to consider and for adding to the conversation.
Michael
Excellent article -- great research and analysis! Thank you for a solid view of Ford!
Michael
The risk/reward as outlined in your article appears to strongly favor silver taking over the lead position in moving the precious metals higher. A position I also agree with -- I also stand in agreement with your analysis and research. Thanks for a good article!
Michael
Satyr - well stated -- I agree with you on "opportunities" the market(s) may or may not be presenting.
Michael
While the "leak" of PCX possibly filing or "fielding" bankruptcy pitches may be rumors - their fiscal problems are very real.
It has been reported that Chinese consumers of iron ore and coal are asking traders to defer shipments -- it is reported that some are defaulting on their contracts. Reuters reported that metal storage facilities in China as so full that iron ore is being stored in granaries. Copper is piling up in places used to store cars.
These are not rumors - supply and demand continue to dominate commodities and metals prices - to assume today's trading in PCX was a bear attack by the shorts may prove to be costly --
Great insight Peter -- thank you -- any thoughts on a ripple effect moving across gilts and bunds?
WMARKW -- articulate and to the point -- I agree with your statements and your sentiment!
Thanks for link Peter -- good analysis - well written.
Michael
Thanks Whitehawk!
Thanks for adding to the conversation Peter -- re AIG - I agree that type of derivatives would likely NOT be picked up by a clearing house. Also, your thoughts regarding loopholes - spot on in my book - and a focus point on my statements regarding Title VII not going far enough.
Michael
I agree that when attempting to assess risk there is more involved than notionals. With that said I disagree with your statement "there are practical limits to how high it can go." Volatility is a strange animal and I've personally felt its sting on more than one occasion and have seen the market price reflect lower than zero - I am not saying the market is right or wrong but believe in attempting to "protect" the financial system from abuse and a possible downfall, policy (regulations) can not keep up with the market's ability to get around it.
Michael
aarc - thank you for your comments. I do agree with some of your points made -- first the fall out from 2008 - 2009 taking down many small banks and financial firms is spot on. However, when a larger (TBTF) goes down the amount often is far greater than most of the smaller firms combined - granted journalists and media may need to pump their own ratings to improve advertising cash flow but the reality is no one wants to hear about the small bank in Midwest that goes under versus Lehman Brothers or Bear Stearns.
"Also the derivatives market of $600T to $700T is being hyped by it's notional value not mentioning the positive and negative values thus the actual risk factor is only $350B to $400B instead of the hundreds of trillions being quoted by the pessimists. With a highly profitable business environment, TBTF participants can have ROC more likely much shorter than ordinary business thus even if they lose 100% of their un-hedged capital on low-probability crisis contagion, they are more likely have already earned much more than what they can possibly lose after several years of operation."
-- I'm not sure how you came up with this assessment, but I do disagree -- how did you figure the actual risk numbers of $350B versus $600T - and where are you seeing this highly profitable business environment? If indeed this was the case, I would think that BAC would be trading at $50 and not $8 or BK would be back at its highs. The "market" isn't confirming your statements - which I would add, by itself does not make them incorrect.
Again, thanks for your addition to the discussion. I for one continue to learn from others.
Michael