Jan 28 & Jan 29, 2021 (Pre-NY Open): Breaking Even On Short Equity Trades, As Yields Signal The End Of The GME Saga; Equities Will Rally; We Shift To The Long Side
Summary
- The key to the downside for equities is still the evolution of yields from here. The downside in equities not a given until/unless yields break 1.03% to the downside.
- But further equity declines aren't signaled by the rising long bond yield, and so its either go for minuscule profit or just go breakeven, then look for buy levels thereafter.
- I am starting to doubt if we will get another downtick in the 10yr yield at this time. For the first time in recent weeks, it is not leading equities.
- After the 10Yr yield surged to new higher high for the day, it will probably pull back some, and it will not surprise me if ES and YM will make marginally lower lows still, or at least test the current lows.
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---------------------------------------------------------------------------------------- Here is the current status of the PAM flagship Swing Fund, which includes open and closed trades.
During the twelve months of 2020, PAM delivered phenomenal real-dollar Hedge Fund 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 margin capital.
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December 2020 spreadsheet here:
Year to date 2020 spreadsheet here.
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JANUARY 28, 2021
GOOD MORNING ASIA / GOOD EVENING WEST COAST
robert.p.balanModeratorLeaderOwnerJan 28, 2021 5:51 AM
robert.p.balanModeratorLeaderOwnerJan 28, 2021 5:51 AM
Bifurcation point at 1.00 % coming up.
all PAM BUYS 288 CONTRACT TNH1 AT BREACH OF 155-06, GTC --- FOR ALL FUNDS
Just in case we get a breakdown of yield support at 1.00%.
nanobrainJan 28, 2021 9:49 PM
Robert, is this GTC or day order?
robert.p.balanJan 28, 2021 9:51 PM
I revised it to GTC NB
GOOD AFTERNOON EUROPE / GOOD EVENING WEST COAST
robert.p.balanModeratorLeaderOwnerJan 28, 2021 12:32 PM
NYSE and NYSE Advance-Decline, Market Breadth plus FANG
The decline in market breadth yesterday was similar to its decline which preceded the October 27 sell-off.
I will be looking out for this consolidation pattern, above.
john.derJan 28, 2021 4:20 PM
Robert, the schema above is in direct contradiction to the models you recently showed forecasting a 5-10 trading day bond bear market. Please explain.
tradeenthusiastJan 28, 2021 4:21 PM
I had the exact same question. thx for asking
robert.p.balanModeratorLeaderOwnerJan 28, 2021 4:36 PM
That decline does not seem to be a zigzag. It it morphs into a five, then it is better as part of a large irregular, chart above.
To me that is not wave 1, wave 2, and part of wave 3. It looks like an inverse irregular with a long tail. We will know it soon enough (chart above)
john.derJan 28, 2021 4:40 PM
OK. Thanks.
robert.p.balanModeratorLeaderOwnerJan 28, 2021 5:03 PM
This talk about Silver as next target of the "mob" is pushing up GC prices. We have a hedged situation between a 1921 long and 1835 short hedge, but if silver is pushed up by the "mob" then its time to long hedge the short hedge so that we can play with the long GC underlying if rumor becomes fact.
all PAM BUYS 1500 CONTRACT GCG1 AT BREACH OF 1875, FOR ALL FUNDS, TO SERVE AS LONG HEDGE TO THE ORIGINAL SHORT HEDGE, GTC --- ALL FUNDS.
Albert.FoodJan 28, 2021 5:11 PM
Would you consider going long silver directly on this rumor or is best to stay away from this kind of game?
robert.p.balanModeratorLeaderOwnerJan 28, 2021 5:19 PM
Not my investment style Albert, sorry. I have been scarred enough by one-off, get-rich quick, trade schemes that turned bad. So thanks, if you want to do it, please do it yourself. This plodding, old fashioned directional trades off the large markets deliver more than enough to the table, so I will stick to it. I already have had enough excitement in my life, trading-wise.
stecbeckJan 28, 2021 5:35 PM
Robert time to look at NG again?
robert.p.balanModeratorLeaderOwnerJan 28, 2021 5:42 PM
robert.p.balanModeratorLeaderOwnerJan 28, 2021 5:42 PM
RTY -- Odd man of the lot.
Gail -
NG looks like a wave 3 in the making, but we already have enough (underperforming NG longs) and Mr. TK is wary of adding to the bleeding bunch. So if you have no exposures, looks like a time to do it.
plavacJan 28, 2021 6:08 PM
US 10y 1.057
plavacJan 28, 2021 7:45 PM
US 10y 1.067
robert.p.balanModeratorLeaderOwnerJan 28, 2021 10:14 PM
I will see you guys in Asia. GN everyone.
JANUARY 29, 2020
GOOD AFTERNOON ASIA / GOOD EVENING WEST COAST
robert.p.balanModeratorLeaderOwnerJan 29, 2021 7:16 AM
*Looks like the markets are finally going our way. Time to add a little more oomph to the short punt.*
all PAM SELLS 288 CONTRACTS RTYH1 AT DOWNWARD BREACH OF 2070, GTC -- FOR ALL FUNDS.
User.12330911Jan 29, 2021 7:21 AM
Robert, do you some updated estimated charts patterns on RTY, NQ and ES? Also, are you still thinking a market top in the first to middle part of Feb. Thanks
robert.p.balanModeratorLeaderOwnerJan 29, 2021 7:24 AM
1233 -- We will do that. Let me have some coffee first-
robert.p.balanModeratorLeaderOwnerJan 29, 2021 8:16 AM
The key to the downside for equities is still the evolution of yields from here. The downside in equities not a given until/unless yields break 1.03% to the downside. We wait for more data.
Hopefully we see that when Europe opens.
See u then
GOOD MORNING EUROPE
robert.p.balanModeratorLeaderOwnerJan 29, 2021 10:05 AM
I am starting to doubt if we will get another downtick in the 10yr yield. For the first time in recent weeks, it is not leading equities, which are still being pummeled by the GME saga. Looks like the bond market may be reading that situation as abating soon -- the MOTUs and bond market makers may have decided to go for liquidity issues, from here.
After the 10Yr yield surged to new higher high for the day, it will probably pull back some, and it will not surprise me if ES and YM will make marginally lower lows still, or at least test the current lows.
EWP illustrations of ES above and YM below.
But further equity declines are not being signaled by the long bond yield, and so its either we go for a minuscule profit or just go breakeven, and look for opportunities to go long instead.
robert.p.balanModeratorLeaderOwnerJan 29, 2021 10:19 AM
The greedy thing to do is allocate a little risk/loss allowance and go for the bottom of the expected move. Or if you are risk averse, just go for breakeven.
*Meanwhile, we cancel the RTY order to go short. But if you are willing to watch this trade (as in the greedy stuff) then keep it but do not overstay short positions.
*all PAM CANCELS THE ORDER TO SELL 288 CONTRACTS RTYH1 AT BREACH OF 2070, FOR ALL FUNDS.
all PAM BUYS BACK 288 TO EXIT SHORT SCALPER CONTRACTS YMH1 AT 30,170 LIMIT OR BETTER, FOR ALL FUNDSMODIFIED TO 30,170
all PAM BUYS BACK 288 TO EXIT SHORT SCALPER CONTRACTS ESH1 AT 3734 LIMIT OR BETTER, FOR ALL FUNDS
But with yields looking very firm (see chart below), on second thought, do not touch the RTY short -- we may not see new RTY lows today.
robert.p.balanModeratorLeaderOwnerJan 29, 2021 10:42 AM
*I asked XXX boys to buy back the ES and YM shorts at breakeven*
all PAM ASKS XXX TO BUY BACK ES AND YM SHORT SCALPERS AT BREAKEVEN, ALL FUNDS
ES WAS DONE AT B/E.
*ESH1 -- DONE AT 3744 -- BOUGHT BACK 288 SCALPER SHORTS AT 3744 (BREAKEVEN) -- FOR ALL FUNDS.*
robert.p.balanModeratorLeaderOwnerJan 29, 2021 11:06 AM
YM WAS DONE AT B/E
*YMH1 -- DONE AT 30,237 -- BOUGHT BACK 288 SCALPER SHORTS AT 30,237 (BREAKEVEN) -- FOR ALL FUNDS.*
PAM BUYS 288 CONTRACT TNH1 AT BREACH OF 155-06, GTC --- FOR ALL FUNDS
all PAM CANCELS THE ORDER TO BUY 288 CONTRACTS OF TNH1 AT BREACH OF 155-06, ALL FUNDS
*So now we wait for the right time and right level to go long equity scalpers.
john.derJan 29, 2021 11:14 AM
And, short TN?
robert.p.balanModeratorLeaderOwnerJan 29, 2021 11:15 AM
And short TN -- you are early John.
Good morning.
john.derJan 29, 2021 11:17 AM
Good morning, Robert. Just catching up over a cup of ☕ before enduring the task of waking up teenage boys.
robert.p.balanModeratorLeaderOwnerJan 29, 2021 11:21 AM
There should be a small pullback in the yield providing levels to short TN,
. . . which may provide levels to go long equities.
We will be on the lookout for those opportunities.
On the long side, we will use NQ and RTY as trade vehicles, or ES.
After two days of incubating the short trades, it was disappointing to merely breakeven, but we did have some fun, ain't it. Also, B/E is better than a kick in the teeth.
(TO BE UPDATED AFTER NY CLOSE TODAY)
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