iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
16,044 Blog Posts

Brazilian Stocks Clobbered to Death; America Jogs On

Brazil might have an actual Presidential scandal, which is lighting their index on fire now — off by a staggering 11%. How are your BRIC trades working out? US markets are shrugging off all bad news, whether it be a horrendous CSCO warning, Trump in turmoil, a rancid China Unicom cooking the books, plunging copper. It does not matter. Cognitive dissonance is a very powerful mentality, especially amongst the beta amongst us.

Bovespa, clown-raped

Following a 370 point drubbing, one should expect an attempt to bounce here. Traders are accustomed to making money on dips, so it would not surprise me to see it attempted now. But at some point along this winding road, fundamentals will matter.

All that aside, the model that I’ve assembled takes the emotion out of my decision making process. Ergo, if stocks deserve to be bought, I will buy them. I am chasing alpha, but have given myself an out by buying hedges in TLT and GLD when the numbers demand it. As of last Friday, the numbers demanded it.

Whether Trump gets impeached or not is immaterial to the bear case being talked about on Wall Street now. The worry is the economy and all of the stimulus that was supposed to happen looking grim with all of these distractions. Plus, the NASDAQ is higher by 11% YTD predicated on some sort of reflationary lift. Should things continue to spiral lower for Trump, coupled with seasonal factors, markets will get shredded to pieces this summer.

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24 comments

  1. john_galt

    This is not the time to buy dips yet, but rather the time to sell rips. A BTFD opportunity will show itself when Gartman announces that he is now short risk. 😛

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  2. matt_bear

    in a world full of HIV and AIDS, the US has a mild case of the herp.

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  3. no_logic

    Curious how you think about this dynamic, so pardon the seriousness of the actual question – just thinking fundamentally, earnings have improved modestly since November, but multiples have expanded given future expectations. If multiples simply revert to pre-election, it implies ~10% downside based on another 2 qtrs worth of slightly improved earnings. Are you of the view that this “overshoots” fundamentals on the downside given momentum, margin leverage, sentiment turning, etc. or do you think there’s material risk of this being the beginning of the end and this selloff leads to full blown recession, which leads to further selloff, which leads…..?

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  4. john_galt

    Another very interesting post by moonofalabama about the current political clustefuck:
    http://www.moonofalabama.org/2017/05/the-special-council-investigation-will-be-bad-for-trump.html

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    • frog

      He ought to call himself moonofRussia. Like Fly, he is more concerned about what things mean for Putin & Russia than about anything else. And it’s a lie that Russia didn’t influence our elections. At the very least, they swarmed us with propaganda and fake news. Fake news does influence people at lot. Most people who comment on this site believe it firmly.

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      • bearraid

        I’m sure you have some proof of this.

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        • frog

          I’ve mostly given up citing proofs of things. I’ve cited scores of them in the past. And people can’t counter-argue, so in response they just insult me. A waste of my time.

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          • sarcrilege

            Perhaps you missed it in my last response to similar post of yours:
            Stalin’s propaganda chief Willy Munzenberg: “All news is lies
            and all propaganda is disguised as news.”

            thus, what you cited as proof were lies.

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          • frog

            Bullshit.

            You, Sacrilege, obviously trust news from some source, like the anti-semitic sources you cite sometimes here. So you don’t believe yourself that all news is lies– only news from sources that disagree with you or challenge you to think.

            All news is NOT lies. Something really did happen today. My sources are far far more trustworthy than your absurdly anti-semitic sources.

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          • sarcrilege

            @frog, I just don’t know if you’re putting everybody here on just for the sake of it or if you are really for real…because it is almost impossible not to see that we live in Orwellian times. Everything is inverted..vis-a-vis your anti-semitism charge.
            Do you really not know that the zionists regard the jewish rank-and-file as pawns to be manipulated? How about this:
            “Anti Semitism is indispensable to us for the management of our lesser brethren,” says the author of Protocols of the Elders of Zion (9-2) a “forgery” (quote/unquote) that reads like the blueprint of the New World Order.
            https://tinyurl.com/mzx8ndb

            and since this is inverted world, yes, I get my alt-facts from “fake” sources so I am up-to-date on reality. Did you catch the double inverted negative there?

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  5. frog

    Essay by a poet on how fake news threw the election to DT.

    Yeah, I know, the election is over. It is, but it’s important to understand how we got this ignorant incompetent mentally unstable president whom we will certainly have to impeach.

    https://travelingpoet.net/2017/03/20/clinton-have-courage/

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    • bennyhill

      It’s amazing how ignorant Fly’s readership is – no matter what happens, it’s just denial. No wonder most stock traders lose all of their money, they are morons.

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      • sarcrilege

        that comment should earn you a lot of warm and fuzzies around here…if not for anything but pure generalization

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        • frog

          There are not any warm fuzzies here. This is a fake news site, populated by Right Wing snowflakes pretending to be strong and insulting others whenever the subject of politics is brought up.

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        • ferd

          Good ….good. Generalization is bad. Bad when Froggy does it, bad when you do it.

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  6. unrelated

    I didn’t vote republican but Trump seemed to be running against those who killed Seth Rich and rule with an iron fist of terror. Did I miss something?

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    • frog

      Yes, you missed reality. The story of Seth Rich was killed for political reasons is false. It’s fake news. No evidence for it whatsoever. You missed the real news, by consuming fake news like Breitbart, Fox, Drudge, Alex Jones, LImbaugh, or whatever similar site you are reading or viewing or listening to.

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      • ferd

        Interesting that you were quick to believe that Trump and his Russian masters were the source that supplied DNC emails to Wikileaks, but you dismiss Assange’s assertions that it was not the Russians and you dismiss his implication that is was indeed Seth Rich. Assange has a far better record of providing truthful intel to the public than do our intel agencies. Get out of your bubble!

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  7. frog

    Inside Russia’s Social Media War on America

    http://time.com/4783932/inside-russia-social-media-war-america/

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  8. ferd

    Frog, we can just turn on CNN and hear your stories right from the source. You are just a wind-up toy humming the tune that you’re programmed to hum. Learn to think for yourself.

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  9. roundwego

    Market is convulsing and gasping for breath. It will roll over soon.

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  10. roundwego

    Canadian home loan bank run by Chinese and now bankruns close to home. The cleansing is on its way.

    http://www.zerohedge.com/news/2017-05-18/chinese-insurer-warns-mass-defaults-social-unrest-due-mass-redemptions-run

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