(March 10 & 11, 2021): PAM Resets Long Equity Trades On Moderating Bond Yields, As Core CPI Is Set To Fall Until Late Q2 2021

Summary

• Headline CPI met expectations, but Core Headline was again an upside miss. Core was lower than expected. Core CPI will continue to disappoint to the upside until late Q2 2021.
• Stimulus money (some of which will float into crypto) unlikely to offset the forced-month-end-selling and 1.6T in capital gains digestion that have to be absorbed into April 15th.
• We reset our long equity scalpers on the assumption that passage of the COVID-19 stimulus bill will push equity valuations further, as well as the beneficial effect of lower yields.
• Congress passed the stimulus bill using a procedural loophole called "reconciliation" which is only allowed to happen once per year. Normally this is saved for the yearly budget but this bill is really important to Biden / Harris since they tend to get more lame as time goes on and need to get whatever they want done in the 1st 100 days.
• However, any future stimulus/funding bills may not be quite as easily passed unless they get rid of the filibuster. Many on both sides of the isle are against doing that. We'll see how long they can keep their party line voting intact.

Robert P. Balan runs Predictive Analytic Models, #1-rated trading unit at Seeking Alpha. PAM trades Swiss HF funds using Federal Reserve, US Treasury, and term (money) market liquidity data flows as basis for trading decisions. He is domiciled in Zurich, Switzerland.

Robert Balan has 5 decades of experience in the financial markets. Education in Mining Engineering, Computer Science & Engineering, M.S in Quantitative Finance, and training in Economics led to a commodity analysis career during the commodity boom of the early 1970s. Robert made a switch to global macro focus in the early 1980 when the commodity bull market waned, with specialization in foreign exchange. Robert wrote a very high profile daily FX analysis while Geneva-based (Lloyds Bank Int'l) in the mid-1980s (the first FX commentary with a real global readership, "most accessed" in the Reuters and Telerate networks from 1988 to 1994).

He worked for Swiss Bank Corp and Union Bank of Switzerland (precursors of today's new UBS) as head of technical research in various finance centers (London, New York, and subsequently, head of prop trading at SBC in Toronto ) from the late 1980s to mid-1990s. A stint at Bank of America as head of global technical research followed in late 1990s to the early 2000s. 

Robert returned to Switzerland in 2004 as head of technical research and strategy, and FX market analyst for Swiss Life Asset Management in Zurich. Robert wrote FX analysis and capital markets commentary for Saxo Bank (Denmark) in the early 2000s. He joined Diapason Commodities Management (CH) in Lausanne in 2008 as senior market strategist, and subsequently Chief Market Strategist, utilizing fundamental macroeconomic drivers and structural/technical data in modeling asset price and sector movements. 

Robert wrote a book on the Elliott Wave Principle in 1988, which has been hailed by the London Society of Technical Analysts as best ever book written on the subject. Robert is a member of the National Association for Business Economics (NABE), U.S.A.