If you only listened to the Fed, you’d never know what the economy was really doing. Here’s our Fed Chair, Jerome Powell, attempting to have his cake and eat it too today.
Source: CNBC
In his semiannual testimony on the state of monetary policy, the central bank chief noted that he and other officials are watching the state of affairs closely and are prepared to adapt policy if warranted.
“While we view current economic conditions as healthy and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals,” Powell said in his prepared remarks to the Senate Committee on Banking, Housing and Urban Affairs. “Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year.”
China and Europe are particular areas of concern, and the Fed also is watching how Brexit negotiations and trade talks play out.
“We will carefully monitor these issues as they evolve,” Powell said.
In other words, and I touched on this before, heading into 2019, the economy was slowing in a very abysmal way. However, since then, things have improved. Alas, we circle back to the narrative I am trying to compel you to consider. Everything we’ve just undergone is at a cross-roads now. If Q2 ends up being a disappointment, we’re heading back towards the fucking lows, and much more.
Having said that, I’m not shorting this shit now — knowing fuckheads like Powell are out there trying to grab the market’s jock-strap. Best thing for me to do is eat some eggs, some black coffee, and perhaps smoke my estate pipe — waiting for resolution.
I sold out of my NUGT position today for a +5.6% gain on a triple sized position.
Top pick: Cash (presently 55% cash in trading account).
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Sold half of UVXY +4.5%
Sold GDX calls at a loss. Small position.
Never see a fed chair pussyfoot around like Powell. Not talking about a fungus.
Cash heavy here too. You’re right about Q2, pivotal. Hell, they’ll all be pivotal. It’s late cycle.
BELIEVE it was a mistake to sell. look at chart… gap now CLOSED.
UP SHE GOES ME THINKS.
why not short VIX???
OOPS ; meant to say buy UVXY.
I made good last few months. Cash is nice, ‘specially when waiting for market direction.
“Here’s our Fed Chair…”
“ours” …good one.
Flattest day in years.
Cash is one choice, but I’m in TLT. With a 2-year time frame, paying 2.5% until the recession actaully hits. Obviously not a “trader’s” perspective.
In tersm of trading, cash now until 2800 it behind us (up or down) is the best call.
Both these sources are extremely biased and often full of sh!t, but nonetheless, here are the bull and bear cases:
http://fat-pitch.blogspot.com/2019/02/fund-managers-current-asset-allocation.html
https://www.zerohedge.com/news/2019-02-25/institutions-dump-stocks-nomura-uncovers-four-drivers-breathtaking-rally
TLT looks great here.
TLT looks decent but if money market is paying 2.2% with zero risk I’m not sure the risk / reward of TLT is worth it. I do have money in ultrashort bond funds which are paying 2.64% – about the same as TLT. All still better than a cash account paying 0.5% though.
The market is only “forward-looking” when it comes to the bull case because the natural tendency is to be bullish and for stocks to go up. But the market is completely retarded when it comes to seeing economic slowdowns coming, until they smack it in the face.
Actual S&P earnings growth slowed to +11.7% in Q4, down from +24.5% the prior quarter, but CEOs have been telling Wall St. that the “2nd half will pickup.” Its just pure hope but that has been enough for investors to buy and the markets to rally big time off the December lows. When the stark realities of poor Q1 and Q2 earnings smack it in the face, I think market heads back down to the December lows.