Dec 30 & Dec 31 2020 Reports: Gearing Up For A Final Yield, Equity Breakout Rally During Early January 2020

Summary

• We still have no idea whether this terminal pattern in the 10yr yield is a triangle (red lines) or an ascending wedge (purple lines).
• If it is triangle, then equities will likely make a new high on a rally after a sell-off probably from where we are right now.
• It the yield EWP pattern is a wedge, it should produce a top much earlier than a triangle.
• We are therefor not touching the dedicated long hedges, and are leaving some of the long overhedges intact. Last night, we unloaded most of the overhedge, and so if we get a prospect of a triangle making new high, we will build the long overhedge level again.
• Tim and I thank everyone for their support the whole year. We have had some bad times, but we also had very good times. We promise to do better this coming year, and a focus on the trading styles that were very successful in 2020. That also means we will try to avoid the mistakes that we (more properly, I) made, and we will make it up to you this coming Year.

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Here are the latest year-to-date trades of the PAM flagship Swing Fund (it may be late by one update cycle).

During the twelve months of 2020, PAM delivered phenomenal real-dollar trading performance, the best at Seeking Alpha:

PAM's flagship Swing Portfolio, year-to-date (December 31, 2020) delivered $100, 181,522.77 net profit on $11,172,813 operating capital.

Year-to-date performance: 754.20%, on 888-98 win-loss trades.

December 2020 spreadsheet here: 

Year to date 2020 spreadsheet here.

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GOOD MORNING ASIA / GOOD EVENING WEST COAST

DECEMBER 30, 2020

Markets are getting close to our sell orders.

robert.p.balanModeratorLeaderOwnerDec 30, 2020 4:57 AM

We may yet get another uptick before a broader sell move.

We've decided to put some protection to the long RTY overhedge exposure, which we now can do following the exit of some big ticket long trades. RTY is so weak, can't even get a decent rally.

stecbeckDec 30, 2020 5:03 AM

Robert if you have time and it is not too much trouble could you post your ES EWP chart

robert.p.balanModeratorLeaderOwnerDec 30, 2020 5:04 AM

all PAM SELLS 2500 CONTRACTS RTYH1 AT 1961 LIMIT OR BETTER, OR AT BREACH OF 1947, OCO, GTC -- ALL FUNDS.

robert.p.balanModeratorLeaderOwnerDec 30, 2020 5:12 AM

PAM SELLS 1600 CONTRACTS YMH1 TO EXIT LOCAL/GENERAL HEDGES AT 30345 LIMIT OR BETTER, GTC

*Modify this to:*

all PAM SELLS 1600 CONTRACTS YMH1 TO EXIT LOCAL/GENERAL HEDGES AT 30325 (FROM 30345) LIMIT OR BETTER, GTC -- ALL FUBDS

stecbeckDec 30, 2020 5:16 AM

thank you

robert.p.balanModeratorLeaderOwnerDec 30, 2020 5:17 AM

PAM SELLS 1600 CONTRACTS ESH1 TO EXIT LOCAL/GENERAL HEDGES AT 3733 LIMIT OR BETTER, GTC

*Modify to:*

all PAM SELLS 1600 CONTRACTS ESH1 TO EXIT LOCAL/GENERAL HEDGES AT 3732 (FROM 3733) LIMIT OR BETTER, GTC -- ALL FUNDS

RTY already doing Wave 4 so it will recover ahead. In the ensuing recovery, the wave 1 of RTY to the upside maybe the Wave 4 of other indices to the downside.

robert.p.balanModeratorLeaderOwnerDec 30, 2020 5:46 AM

PAM SELLS 1600 CONTRACTS ESH1 TO EXIT LOCAL/GENERAL HEDGES AT 3732 (FROM 3733) LIMIT OR BETTER, GTC

*This order was filled.*

*ESH1 -- DONE AT 3732.25 SOLD 1600 CONTRACTS ESH1 TO EXIT LOCAL/GENERAL ES HEDGES, FOR ALL FUNDS. *

robert.p.balanModeratorLeaderOwnerDec 30, 2020 5:52 AM

PAM SELLS 2500 CONTRACTS RTYH1 AT 1961 LIMIT OR BETTER, OR AT BREACH OF 1947, OCO, GTC

*This order was filled.*

*RTYH1 -- DONE AT BETTER 1962.27 SOLD 2500 CONTRACTS RTYH1 TO TEMPORARILY PROTECT THE LONG RTY OVERHEDGES , FOR ALL FUNDS*

robert.p.balanModeratorLeaderOwnerDec 30, 2020 6:11 AM

PAM SELLS 2000 CONTRACTS NQH1 TO EXIT LOCAL/GENERAL HEDGES AT 12,885 LIMIT OR BETTER, GTC

*This order was filled.*

*NQH1 -- DONE AT 12,885 -- SOLD 2000 CONTRACTS NQH1 TO EXIT LOCAL/GENERAL NQ HEDGES, FOR ALL FUNDS. *

robert.p.balanModeratorLeaderOwnerDec 30, 2020 6:27 AM

PAM SELLS 1600 CONTRACTS YMH1 TO EXIT LOCAL/GENERAL HEDGES AT 30325 (FROM 30345) LIMIT OR BETTER, GTC

*This order was filled.*

*YMH1 -- DONE AT MUCH BETTER 30,343 -- SOLD 1600 CONTRACTS YMH1 TO EXIT LOCAL/GENERAL YM HEDGES, FOR ALL FUNDS.*

robert.p.balanModeratorLeaderOwnerDec 30, 2020 6:37 AM

*We have modified the reset levels of the long overhedges:*

all PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF ESH1 AT BREACH OF 3748 TOP (FROM 3740), GTC -- ALL FUNDS

all PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF NQH1 AT BREACH OF 12,917 TOP (FROM 12,905), GTC -- ALL FUNDS

all PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF YMH1 AT BREACH OF 30,450 (FROM 30,400), GTC -- ALL FUNDS

Orders done, done, and done.

I will see u in Europe trade. GN everyone.

robert.p.balanModeratorLeaderOwnerDec 30, 2020 11:27 AM

We still have no idea whether this terminal pattern in the 10yr yield is a triangle (red lines) or an ascending wedge (purple lines).

All that I am getting now is that if it is a wedge, then we get to have a chance of this equity outlook coming true (chart below).

But if it is triangle, then equities will likely make a new high after a sell-off probably from where we are right now.

It the yield EWP pattern is a wedge, it should produce a top much earlier than a triangle.

That means RTY may still make it five wave decline.

But NQ will probably just power on, after making a flat correction.

And ES will complete a zigzag (A-B-C)That goes for the YM as well.

We are therefor not touching the dedicated long hedges, and are leaving some of the long overhedges intact. Last night, we unloaded most of the overhedge, and so if we get a prospect of a triangle making new high, we will build the long overhedge level again.

Here is a picture of raw liquidity flows, just rearranged to highlight the inflection points in time when the inflows/outflows are strongest. No modeling, no data manipulation. Just rearranging the data -- flows are liquidity positive (bond prices cheaper, yields higher) until mid-January.

"Nesting" Inflection Points of Fed Balance Sheet, Bank Reserves Plus, Treasury Cash Balance

Also watch Gold (XAU).

It might be forming a wave 4 triangle. A gold sell off might precede an small equity sell-off.

Whatever, it will be, it will not be dull year-end finale.

Back by 2.30 pm Swiss time.

robert.p.balanModeratorLeaderOwnerDec 30, 2020 5:36 PM

PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF YMH1 AT BREACH OF 30,450 (FROM 30,400), GTC -- ALL FUNDS

*Modify to:*

all PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF YMH1 AT BREACH OF 30,492 TOP (FROM 30,450), GTC -- ALL FUNDS

I will see you guys in Asia. GN everyone.

DECEMBER 30, 2020

GOOD MORNING ASIA / GOOD EVENING WEST COAST

Looks like RTY and other indices due for another uptick.

*Yields have completed a mid-point EWP consolidation and should resume the yield rally soon. Equities will follow suit.

**There is a mismatch between RTY hedge and overhedge of 275 contracts (PLUS). We would like to build upon it to deal with this yield/equities uptick (if it happens).

*all PAM BUYS 225 CONTRACTS TO BUILD UP LONG TRADE IN CASE RTY AND OTHER INDEX MAKE ANOTHER UPTICK, DCC DISCRETION*

RTYH1 -- DONE AT 1975.4 BOUGHT 225 CONTRACTS TO BUILD UP RTY LONG TRADE TO 500 CONTRACTS, FOR ALL FUNDS*

robert.p.balanModeratorLeaderOwnerDec 31, 2020 7:09 AM

all PAM BUYS 288 ESH1 SCALPERS TO FRONT RUN WHAT COULD BE AN EQUITY/YIELD UPTICK, DCC DISCRETION, ALL FUNDS

all PAM BUYS 288 YMH1 SCALPERS TO FRONT RUN WHAT COULD BE AN EQUITY/YIELD UPTICK, DCC DISCRETION, ALL FUNDS

all PAM BUYS 288 NQH1 SCALPERS TO FRONT RUN WHAT COULD BE AN EQUITY/YIELD UPTICK, DCC DISCRETION, ALL FUNDS

*These orders were filled.*

*ESH1 -- DONE AT 3725.50 BOUGHT 288 SCALPERS FOR ALL FUNDS*

*YMH1 -- DONE AT 30,328 BOUGHT 288 SCALPERS FOR ALL FUNDS*

*NQH1 -- DONE AT 12,849 BOUGHT 288 SCALPERS FOR ALL FUNDS*

OK See u later in Europe trade

robert.p.balanModeratorLeaderOwnerDec 31, 2020 9:48 AM

*There is a mismatch between RTY long and closing short trade of 13 contracts.*

all PAM BUYS 13 CONTRACTS TO CLOSE THE MISMATCH BETWEEN TWO PREVIOUS TRADES, DCC DISCRETION -- FOR ALL FUNDS

*RTYH1 -- DONE AT 1970.5 BOUGHT 13 CONTRACTS TO CLOSE THE MISMATCH BETWEEN TWO PREVIOUS TRADES, ALL FUNDS*

robert.p.balanModeratorLeaderOwnerDec 31, 2020 7:42 PM

Tim and I thank everyone for their support the whole year. We have had some bad times, but we also had very good times. We promise to do better this coming year, and a focus on the trading styles that were very successful in 2020. That also means we will try to avoid the mistakes that we (more properly, I) made, and we will make it up to you this coming Year.

We both wish you the best the new year has to offer. The Bossman sent his best wishes too. Not to forget the Accountant -- he said it was fun watching the community all year. He means well.

nick.88Dec 31, 2020 7:50 PM

Happy new year! thank you both for your guidance, been one hell of a year, bring on 2021!

Scott007Dec 31, 2020 7:54 PM

Ditto master jedi

robert.p.balanDec 31, 2020 7:54 PM

Thanks nick, Scotty

alexis.zacharDec 31, 2020 7:44 PM

Happy New Year and tks PAM and community...

sri2020Dec 31, 2020 7:45 PM

Thanks to you RB and Happy New Year!! Wishing well for everyone in the community!!

paradigmDec 31, 2020 7:55 PM

Robert, Thank you for sharing your decades of accumulated knowledge and wisdom with us all. Best wishes to you and your wife for a Healthy and Prosperous New Year. Looking forward to 2021 with this wonderful community.

crowfeverDec 31, 2020 7:56 PM

Robert, Happy New Year, I greatly appreciate what you do for PAM members. I'm learning a ton. Also, thanks to all the PAM members who contribute fantastic trading advice, I hope all have great New Year.

robert.p.balanModeratorLeaderOwnerDec 31, 2020 7:59 PM

Colette, crow -- thanks a lot for the kind sentiments. Thanks for your support and wishing you all the best in 2021.

Thanks alex and sri -- we will do better this coming year. Our promise to you.

centexlifeDec 31, 2020 8:03 PM

Robert (and all PAMers) have a blessed and prosperous New Year. Our politicians aren’t worth a sh!t in Texas but we have faithful and great friends across the planet and particularly in Switzerland through PAM. Blessings one and all.

robert.p.balanModeratorLeaderOwnerDec 31, 2020 8:25 PM

Thanks a lot Tex for the kind sentiments -- from all of us.

fourscoreDec 31, 2020 8:25 PM

Happy New Year RB to you and your family. It is great to be still learning(and earning)through your great sharing. Looking forward to an outstanding 2021!

robert.p.balanModeratorLeaderOwnerDec 31, 2020 8:27 PM

Thanks fourscore -- and wishing you the best of health and wealth creation this coming year.

user.10917311Dec 31, 2020 9:23 PM

Happy New Year Robert and our great PAM community.

salmixDec 31, 2020 9:47 PM

Happy New Year robert.p.balan and all of PAM. I've been having a great time here and learned a lot. Many thanks for all the guidance! I'm looking forward to continuing in 2021.

stecbeckDec 31, 2020 10:02 PM

Best wishes to everyone for a healthy, happy and prosperous New Year

robert.p.balanModeratorLeaderOwnerDec 31, 2020 10:03 PM

user.10917311 , salmix -- thanks for the kind thoughts. We will indeed be better in 2021 -- lessons from 2020 re-learned- Thanks to you both and best wishes for the new year. Would really be a great start in Jan if you guys were long equities along with most of PAM (I hope).

Hello Gail -- same to you and family. Best wishes for health (and wealth) for 2021.

greg.irvingDec 31, 2020 10:08 PM

Happy New Year, Robert and Tim, and the rest of the PAM community. Thanks for your guidance and support. We are learning plenty and looking forward to continuing the journey in 2021.

robert.p.balanModeratorLeaderOwnerDec 31, 2020 10:17 PM

PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF YMH1 AT BREACH OF 30,492 TOP (FROM 30,450), GTC

*This order was filled.*

*YMH1 -- DONE AT 30,494.30 BOUGHT 500 CONTRACTS YMH1 TO RESET PART OF OVERHEDGE, FOR ALL FUNDS*

PAM RESETS BUYS 500 C0NTRACTS OVERHEDGE OF ESH1 AT BREACH OF 3748 TOP (FROM 3740), GTC

*This order was filled.*

*ESH1 -- DONE AT 3748.75 BOUGHT 500 CONTRACTS ESH1 TO RESET PART OF OVERHEDGE, FOR ALL FUNDS*

Still working until the very last minute of the 2020 last trade day.

greg.irving -- thanks for your support; we will do better in 2021 -- that's a promise.

robert.p.balanModeratorLeaderOwnerDec 31, 2020 10:36 PM

OK gals/guys -- have a happy (and safe) new year's celebration. I see you all in Jan 4 in Asian trade. GN everyone.

tradeenthusiastDec 31, 2020 11:16 PM

Thanks Rb for all you do. Hope you spend quality time with your family.

youcefk.shaJan 1, 2021 9:20 AM

Happy New Year robert.p.balan and to all PAM Community. Recent joiner, I had a great time following you guys from Shanghai and did learn a great deal... ! Keep it up guys and wish you all Good Health, Joy and Happiness !

Manu.PJan 1, 2021 9:48 AM

All the best for everyone and special thanks to Robert!

plavacJan 2, 2021 4:45 PM

Happy New Year robert.p.balan and to all PAM Community. I am with Robert maybe 5-6 years, before PAM, Robert is hard working and always is interesting, thank you.

robert.p.balanModeratorLeaderOwnerJan 3, 2021 10:17 PM

tradeenthusiast Manu.P youcefk.sha plavac -- Thanks a lot guys, wishing you the best 2021 has to offer.

2020 trading comes to a close.