Here is what I am looking at to gauge the current investment appetite.
European yields:
Italy (on the brink)
Spain
France
Germany
Czech
Finland
Austria
Poland
Hungary
Belgium
If yields rise from current levels, I am a seller. If they come in, I will hold my positions.
If the Euro goes below $1.31, I am a seller of stocks. It needs to consolidate here or trade up to $1.36 in short order to get risk appetite going.
Banks
I am watching ING, BAC, MS, JEF, GS, BCS. Some foreign banks worth monitoring: Unicredit, Intesa, BNP Paribas, SocGen, amongst other stupid European banks.
I’m watching the price of gold and silver closely as a barometer of risk. When gold and silver are up, I feel good about stocks. Silver is like a 3x gold ETF, in terms of volatility.
I’m watching “global growth” plays like JOYG, CLF, TEX, FLS, BHP and CAT. Big tech names like AAPL, GOOG, ORCL and CRM are also on the watchlist.
Commodities
I am watching Copper, Oil, Coal, Aluminum and Lithium.
Finally, I am interested in corporate. government and municipal credit. You can view this via JNK, LQD, HYG, PCK, MUB and TLT.
Before I sell some silver and allocate my cash reserves into high beta names, I need to see all of the things above move in the right direction. There are market tells everywhere. Don’t be so stubborn about the possibility of a smash your skull in rally. If there is one consistent aspect to trading this tape over the last three years it is to have faith in the central bankers to attempt to reflate. Granted, this is a very tall order. However, I don’t see how they keep their jobs in an unorganized, catastrophic default.
They will throw the kitchen sink. Bank on it.
When the ball gets rolling again, I will bulk up on names like WNR, FFIV, DECK, FLS, and a plethora of heavily shorted stocks. For now, I have 60% of my assets in precious metals and cash–with a side order of LULU, GSVC, RBCN and a few others.
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i’m not liking the price action in silver and gold ah.it’s red
The Fly goes long silver then short it is, target $27…deflationary spiral will take hold
How is deflation going to happen when everyone’s printing
unemployment, recession….printing just filling giant sinkholes inside banking system
Why did gold & silver rise during QE 1 and 2 then, and unemployment was at 10%. Please explain how deflation is going to occur.
Deflation will occur once it become apparent inflation policy and stimulus arent possible anymore and that the only way out is austherity.
Printing solve the asset price problem but it doesn’t raise the working masses salaries aka the nein nein percents.
We all know that austerity is a joke:
http://news.investors.com/Article/588254/201110170805/The-Austerity-Myth-Federal-Spending-Up-5-This-Year.htm
IBD counts the stimulus spending (and all other Fed transfers to the states) twice – once at the Fed level and again at the state level.
Absent the Fed money, state spending declined in 2009 and 2010. That’s in nominal dollar terms. Adjusted for inflation and for population increase, the decline is substantial.
Now that stimulus spending has passed its peak rate and is declining, it has a negative contribution to GDP growth, though the money is still a positive amount.
Good info, appreciate the facts… I still have a difficult time believing that our government or any other will reign in spending.
We have deflation or near deflation because people and corps are holding onto their money, keeping large cash reserves. When the money is not spent prices have to fall and the economy slows, employment picture gets worse. It is the murder hole of murder holes. The central banks try to avoid that by printing and dumping cash out there. But those that gets, keeps it instead of turning it over.
Expanding monetary base does not lead to inflation. Credit leads. With 9-10% unemployment, deleveraging by the private sector, and more stringent requirements to banks’ capital there credit won’t appear for a long, long time. Instead the newly obtained reserves from the Fed (which exchanged them for MBS and related junk) had been directed to high-risk asset plays, like PM, commodities, probably to equity markets as well.
BANNED
I thought you were switching over to Food & Beverage, no?
Things changed.
Nice post. Very good cross section on market breadth.
People only concerned with European yields remind me of all those clamoring about CDS spreads last fall. Never mattered.
Screw the banks other than WFC and USB. Maybe not the technical setup but, the quality issue fully covered. Better yet, CDEC, supporting my booze passion.
CEDC … already into the vodka, huh?
Do you watch LIBOR at all, or is this not as important if you monitor yields and share price of the banks?
Awesome post, Fly. These are the types of posts I learn the most from. Thanks!
I’m going out on a limb and predicting physical gold tested its short-term low last week and will eventually rise. I wish I had a timeframe; if I could guess I’d say by mid next week we’ll be happier campers than we are right now.
Flyaway, we shall hold your feet to the fire! ;))
where did you buy your crystal ball? 🙂
COMING IN???? *#*#&@&#*#;$
Fly, you quadrupled your WNR position and you regard it as a “side order and others”…am I missing something?
I hardly had any. To get full position, I ‘d need to make it 5X bigger.
Nice summary. Thanks.
“a side order of LULU, GSVC, RBCN ”
You better watch your Carbs
In the immortal words of that great Commodities Trader, Patrick Henry …
“Give me Lithium … or, give me Meth” !!!
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lol……
SQMish
Dr,
Italy (on the brink)…?
or they want you to believe this so badly? …
7th largest economy in the world
3rd largest gold bullion holder on the planet
and 1/2 of Italian debt they borrowed from themselves, learned from Japanese… unlike good old US of A, which borrows money from every Dick and Harry… or Vladimir lol
They cannot afford these high costs to borrow. They will default by the end of January if this isn’t resolved.
true,’but it will get resolved…
IMF or ECB or you and me..
somebody will print… 🙂
if it is not resolved we’ll have bigger problems than stock market – Armageddon ala The Fly…
If Us faces japanese style lost decade (s) DJIA should be at 2600 .. now that is scary…
only 6 more years to go. you can wait that long, no.
Any thoughts of market movement if mortgage securities are bought during QE3 as reported? Assuming Europe kicks the can a little longer, and the run-up to 2012P POTUS election do you expect a big early 2012 rally?
When will gold/silver reach bubble status? Have we not seen this before, with investors relying too heavily on the “safe” alternative?
sorry wrong spot
Fly, may I ask you an honest question without you going all “BANNED” on me ?
.
… …
.
… apparently not !
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Alf..your wasting valuable space here and on this planet.
… uhhh … “you’re” smegma breath !!!
A-game you illiterate fuckface !
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Ahhhh, classy……from the alfie….are you on meth or lith?
… is there no end to ALL the alf44 stalkers ?
Where do they all come from ?
Am I REALLY that charismatic ?
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You losers need to get a fuckin’ life !
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Leave ALF alone. He hasn’t worked in the biz since his TV series ended in 1990, and he’s too short for Dancing With the Stars.
hum, dont read here much do ya?
ment fer tic tock
… good ta seeya back, razor !
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… I guess Señor Fly is knee deep in “Rosetta Stone” lessons … boning up on his German … and, too busy to respond !
Oh well !
No biggie !!!
Maybe I’ll try another time …
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Just post your fucking question!
Exactly Jesse.
Alf, just ask your idiotic question already.
Like previous posts, I am sure it will be as boring, monotonous, irksome, tiresome and humdrum as all your previous but for the love of God…be done with it.
Any thoughts of market movement if mortgage securities are bought during QE3 as reported? Assuming Europe kicks the can a little longer, and the run-up to 2012P POTUS election do you expect a big early 2012 rally?
When will gold/silver reach bubble status? Have we not seen this before, with investors relying too heavily on the “safe” alternative?
LULU= Trash short it
What about Capital Controls? Maybe not formal ones, but controls that will make it much more difficult to move money around. Europe seems to heading there, perhaps investors will be required to buy the Salvation Bonds.
No one cries for speculators.
and kim kar-bash-me-in, sucks.
Fly,
That was a post with some meat on it.
shallow family shallow show….americans lob dat chit,,,lol
future son-in-law came back from 2 tours in iraq, to see what hes fightin for…hummm,
… tell him (as a veteran) I said … “thank you” … for his service !!!
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alf , thanks,,
Thumbs up.
As a fellow OIF veteran, I second ALF’s sentiment…
he asked for my daughters hand, it was touching…
i told him he’d have to take all of her…
🙂
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What a great post. Just concentrated all inclusive rationality, in the midst of incredible uncertainty.
Mother market is a bitch. But we are all each other’s bitches. Bull Bear we’re all in together.
Happy end of 2011. Standby 2012
http://youtu.be/jqqsU_OH6C0
http://youtu.be/o7rfoH2o1v4
What happened? How did the print on this web site suddenly get all tiny like the fine print in a credit card agreement? Smallest print I’ve seen on a web site lately.
sorry frog, some things r more important than the market.. as least for a min….
“Frog” … uhhh …
Some pills make it LARGER
And … some pills make it small !
But, the ones your Mother gives you …
Don’t do ANYTHING at all …
Go Ask Alice !!!
.
Hit CONTROL & 0 at the same time to bring it back to normal.
Control & + will enlarge
Control & – will shrink
Oh !
BTW !!!
Did I mention that the NY Giants are proving … once again … how LOUSY they are !!!
BWA-HA-HA-HA-HA-HA !!!!!
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Go Cowboys !!!
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They will sweep the Cracks. They are not yet that sucky.
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it is interesting how everyone is suddenly an expert on how the fix works. seems like a massive case of hubris from the internets ibank followers. hard to imagine a market collapsing just so you can “get in” because it was just so “obvious the world is over”. listen to the fly he will help you.
Neva’ offense TRUE amish boy.
You can pick my crop, but never close shop.
Go pick sum sun.
As I prepare to turn in for tha night … I am suddenly stricken with a sense of … inadaquacy … of, a feeling that I am unworthy of my trading success !
Should I feel guilty for consistently pulling money out of the Market ?
Should I be focusing ALL of my attention events I can’t control and obsessing over European Bond Yields ?
Maybe I should stop looking forward to my “After Market” ritual of sitting down with my lovely wife, a glass of wine and an hour or so of King Of Queens reruns !!!
Nahhhhh !!!
See ya’ll tomorrow !!!
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fuck off alftard. it gets annoying dude
i think most REAl amish would cook Yo ass fo wolves son.
FU
X ?
The dollar will eventually side-kick us into a plate glass window 50 floors up…
Sir Fly: greatest. post. ever… or at least for the few months I’ve been reading.
not really, but your mom can rub my feet.
Poof!
Your Bullshit rally in Silver is gone.
You’re gonna have to shake harder than that, Istari.
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1.3100 not 1.31…we always take the eur/usd to four places. Not sure why Fly is taking 1.3100 as key support…I have a lot more important ones. We are just waiting to see what the EU group does and the Autumn statement out of the UK.
Watching Soc General (GLE). Positive reaction to Italian bond sales, yet negative reaction to Belgian bond news….what to do then?
Comex Copper up, Comex Silver down??? I agree the banks with throw the kitchen sink, but at the moment the lead indicators dont seem to be consistent in showing what to do
Stay long and trade by your rules.
Facebook IPO coming…. GSVC has to be good here.