I kind of regret not closing out my shorts on Friday. There appears to be a narrative shift taking place here. While it’s true, Britain’s PM Boris Johnson, once a flu bro, is now in the hospital due to 10 consecutive days of high fever, there is a trend in recent news events.
Infection rates, at least those being reported, in Spain, Italy, and NY have subsided a bit. Additionally, fuckers in Silicon Valley are preparing monstrous buyout funds.
Private equity firm Silver Lake Partners is preparing to seek at least $16 billion from investors for its sixth flagship buyout fund
— The_Real_Fly (@The_Real_Fly) April 5, 2020
On the other hand, oil is down 8% after the much advertised 10 million barrel per day cut by the TEXAS RAILROAD COMMISSIONER seemingly fell flat on its fucking face because Putin hates their guts and wants shale producers to die. But I could see that railroad FUCKER talking shit again this week, so be on edge for that. The weather is improving and we’re entering week 3 of fuckery. Trump is antsy as fuck and wants to send people back to work. There is going to be an explosive rally at some point, which might decapitate plenty of shorts. It will last longer than people think and offer a false sense of hope and blanket of security. The truly bad news will come later, after companies report fucked numbers post crisis.
Nasdaq futs are +122 and anything can happen, literally anything. I am neither bullish nor bearish right now and feel that markets want higher, but should really go lower. My feelings, however, have nothing to do with it.
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This is what winning looks like.
Catchy, but can Bulls quantify what winning *actually* looks like?
Does the market care about the deaths and infection at all (panic/fear), or are they only concerned about the economy? If the economy is the concern, then the only metrics that matters is weeks until businesses re-open.
There are three considerations here:
1) As I stated on Friday, we are in the 1000 deaths Zone. At a minimum, I don’t see how we restart buisnesses with exit until we are out of that zone. It would probably require 3 days below 1000 deaths for confirmation, and the latest projection for that date is May 10. One consideration is that unlike the marrket, the slope up is much steeper on the way *up*, so it will take a lot longer to exit than most people realize.
2) Each state has its own curve. While NY is early on the curve, many states won’t even *peak* until mid-May. Does it make sense to reopen the country in sections? Dr. Fauci and Trump may have disagreements over this. If we ramp up testing enough so that we can truly isolate and contact-trace new groups like South Korea does (3% postive rate on tests), then this is a go.
3) Given the NYT article, it seems that even with *US deaths*, there is widespread undercounting. I did not foresee this, and neither do the data modelers. The issue is the fact that testing is so behind, dead people aren’t gettign tested, as the information gleaned from that is less critical then gettign help to people that need it. While Trump and other short-sighted thinkers may see this as a plus (lower numbers), it won’t turn out that way. **Any** undercount in any metric (deaths, confirmed cases, etc.) only serves to spread the virus further and extend the lockdowns. Look at Japan for a model of how this plays out.
A couple of things I’d add. Mnuchin (Trump really) has big bucks to hand out and he likes favors. Mnuchin is part of the crowd who can deliver favors- buying.
Also, sometimes the market just ignores reality for no apparent reason.
And yes, Japan is now a valid comparison.
Mnuchin will probably give it all to the FED:
1) Less short-term transparency
2) 4x leverage (If Treasury distributes it, $400B -> $400B in loans. For the FED, $400B -> $1.6T in lons)
3) More welfare for the rich (
If Treasury distributes it with a 20% loss: 400B loaned * 80% – $320B paid back to taxpayers, the 1% keep $80B.
If FED distributes it, $1.6T with a 20% loss = $1.6*80% = $1280B repaid -> $1.2B for the FED (100% paid back), $80B for the taxpayers (80% loss), $320B for the 1%)
How exactly does the Fed get 400% leverage? pardon my ignorance here…
Because they say so. They’re the fed. Actually it’s more like 10x, the treasury is handing the fed 450 billion for loss cushion but they’re lending 4.5t.
It’s fuckin’ magic!
It is self-determiined by the FED, based on whatever the FED is willing to lose.
If they makes loans on a 10:1 basis, then the FED, then the FED will lose money on a 10% default. Of course, any interest they collect will help as well.
Debt:gdp is going to be | P U R E | E C S T A S Y | to look at
Showtime, I hope you’re OK. You’re supposed to get help after 4 hours but you’ve had that hard on for a month now.
tjnytApril 3, 2020 at 9:25 pm
WB sold airlines and I am long, also long energy, BAC, WFC, BA call(reload), casinos.
Let’s see if world’s biggest casino goes bust Monday?
Expecting COVID carnage to ease Monday, at least in Europe if not in NYC.
My crystal ball is bigger than….
Let My People Go, games of fuckery& debauchery begin….. again.
Is the tjnyt handle code for day trader davey? Jk, thanks for the posts homie
no
I think you may be right Fly.
Between the BTFD simpletons and the view that corona is the problem and everything will be back to normal when it is beat (LOL), markets could rally. They could be right, too, since the federal government is throwing a half of a year’s worth of GDP at the economy. I doubt it but hard to figure.
But most likely there is enough bad debt out there to take down the economy. Covid is the cherry on top.
I’ll stick with my straddle for now rather than pick one side or the other. I wouldn’t mind a rally at all, I played the plunge like shit and would love nothing more than a second chance. Made money but should have made MOAR!
My regret is not the plunge, but the huge rally that I called two weeks ago. I should have made 15% that week.
I wasn’t surprised that we went lower in the morning despite the FED’s news, because there were a lot of investors’ checking their portfoilo’s over the weekedn. However, the fact that we closed near the lows that Modnay concerned me, so I second-guessed myself. To quote Rumsfield, “I didn’t know what i didn’t know,” so I took the market’s message to heart (I was ~50% long at the end of the Monday and exited on Tuesday)
Sounds like we had a similar problem. I didn’t anticipate the size and speed of these moves. I doubt anyone did.
I got out too quickly with a good profit thinking I’d get a point to reenter but nope, it just ran away.
20% up in 3 days is pretty explosive… doubt we’ll have another with that kind of acceleration.
Bullsih: It does seem as if the public is getting numb to the bad news. In addition, Trump is defintely tryign to pump the market, so a slow drift up could be in the works. Plus we do have $trillions in stimulus.
Bearish: PEs have not gotten to anythign near past bear bottoms, which is especially noteworthy due to the fact that “E” will take a big hit. Bulls have not thrown in the towel. Perhaps if we had wallowed around a bit more near the Mar 23 bottom, but as it stands, this would be the shortest bear market by a wide margin and Bulls are already exclaimign “Mission Accomplished,” – excuse me – “This is winning” (4 thumbs up and counting).
Bad news is being ignored, in terms of the 700k number we hit last Friday morning. Is that bullish or bearish?
Also, how soon will the stimlus be distrbuted to the people that need it?
Looking too slow. Way to slow, for the non-rich.
Those struggling hedge funds probably got their check hand delivered by Powell Friday night.
Here’e another long-term bearish point: many Americans will be getting deferement on rent, mortgage bills ,credit cards, etc.
Note that these are *****deferrements*****, not credits or forgiveness.
Eventually, the unemployed will be re-emeployed, the economy restrats, and the deferrement period ends. Given the fact that a significant number of Americans keep spendign until their debit or credit card is declined, waht happens at the end of the deferremnt period when their bills go from $0 to 2x (new bill + deferred bill) their pre-recession level? Suprise!
My crystal ball says that *if* we don’t retest the lows in April, we’ll retest in the summer, when the consumer is taken off life-support (quite literally).
I agree. At a minimum- consumer demand will slow.
Many can’t even afford 1x.
I’ll trade a rally- I don’t expect it to last.
One of my friends said he was down almost 20%, but didn’t mind. It always comes back.
I wish I could help him. He’ll probably buy more “on sale”.
They never listen. I hope those peeps enjoy the next couple of months or so.
The “CFP/Edward Jones” types will always stick with dollar cost averaging regardless of what happens to the economy until they lose their jobs.
Being 70% GDP, I can’t see the market shrugging this off.
They’ll shrug it off for a while, then the smart money will get out at higher prices, while retail investors will be alte to figure it out.
There will be new lows (with or without a second wave), not just retesting the lows.
No other country’s hoax has a curve as steep as ours. Nothingburger. A million times zero is still zero so…
Let’s rally! Later we get a bonus crash.
Does the market go higher or lower when Dr. Trump ( graduate of Trump Medical College) croaks from the smart, enemy virus? Carry on.
It may be hard to believe, but some think he’s important. I just trade on what happens.
But I’d be a happy mofo.
Churches would fill up with the proof that God actually exists!
/thread
All I need is sign in the clouds.
“Edge, buy TNA.”
https://foreignpolicy.com/2020/04/02/landon-spradlin-coronavirus-pandemic-death-punchline/
The megachurch pastor stuck it to the libs. So he thought anyway.
I saw we give it to Trump, Biden, and Sanders and whoever survives gets to be the president
A bunch of idiots are going to insist on going to church in person on Easter. Its going to be tremendous.
It *is* gold, and it’s going to be YUGE.
Speaking of gold, I am really liking the cheap gold I snatched up last week. New highs in the precious metal space are well on their way.
The gold market is acting a little weird, either people aren’t it as the hedge it once was or ?.
I bought a little NUGT Friday
But I don’t know how well 3x ETFs are going to do in a financial storm.
Leveraged ETFs eat up good chucks of the gains in volatile markets. That’s another reason I prefer futures.
Darwin always wins..
BTW. Jamie Dimon says the market is toast, but not to worry, we’ll come back stronger than ever.
I guess he means relatively. Our economy will be the best smoking hole on the planet. MAGA
Just sold the straddle into the morning pop.
Nice start.
What next?
Beginning to short from /ES 2598, slowly.
Thought about a quick short trade.98% cash, 2% Nugt.
Lost four cents on a SPXU trade. Thanks Narcist.
You’re welcome.
I’m not too ambitious on this one. Sold only 5 contracts at 2598 and another 10 at 2604. Will close the position for 20 points later at 2582.
Take a look at IDN – if immunity certificates get started this will fly
The Corona virus is a giant crash program now. Every government and scientist working on it. Awesome to see. Was thinking of picking up some MSFT, but it’s such a crowded trade, I don’t like it as a recovery play. The best recovery stocks are probably these garbage airliners sitting at all time lows. It’s just so hard.
Trade, don’t hold. My two cents.
Thanks, I’ll buy and hold. I’m young. Oil for the win in 2024.
I think people can see the end now. Whether it’s a mirage doesn’t really matter. Fundamentals are the worst I’ve ever seen I agree.
Mirage. Or wishful thinking.
Small cap value
I’m dropping my long hedges into this rally and rotating into deeper ITM puts further out. Down only 1%.
Investors have a huge optimism over what cresting the hill (and we’re not even there yet) actually means for the economy.