We had a nice move going around 2:45pm but it dissipated into the final half hour — as people got flat ahead of Asian trade which I still believe will be a non-event.
We are now coiled tightly and anticipation is in the air and most want to see Evergrande dealt with one way or another this week — which should pave the way for a clear and concise and resolute direction for stocks.
For the session, I closed +45bps with 32% cash, heavily long in all 3x upside ETFs.
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Liked my Tweet reply from @mark_dow:
“It’s ridiculous on its face. Anyone who knows China’s reaction function at all knows that internal stability is everything. They’re not going to put that at risk
Besides, at least China is smart enough to know Evergrande isn’t globally systemic enough to have that kind of effect”
It’s quite possible this whole thing is just a big excuse to selloff because GDP is turning down everywhere.
Doubt many care what happens in China. This has deeper history and probably showed signs before covid-19. Earnings and inflation; with earnings excellent inflation has rooted in the meantime. We are exiting the sweet spot for equities.
Okay, Evergrande paying onshore bonds tomorrow (noticeably silent about foreign investors).
And now, we wait to see if the sellof was ever actually about China.
Late in the day selloff was not about Chiner but about what FED might say tom
Con Dorleon: “We have people in the press don’t we Tom? A story of a dirty America, where the Taliban (when they’re not raping 9 year old girls & imposing sharia) are actually the ‘GOOD guys’ might just sell, right?
CNN Hagin: “You know Mikey, it just might…”