The trend’s your friend … until it ends. And trends always end. ZeroHedge jumped all over JPM’s note calling a tech correction in July: “The Correlation Is Broken”: JPMorgan Tells Clients To Buy Puts In These Tech Stocks Last week, ahead of the massive Momentum ETF (MTUM) rebalance, we showed something remarkable: momentum stocks had undergoneContinue reading “JPM: “purchase July 95% strike puts on BIDU, PDD, SWKS, QCOM, OKTA, XLNX and/or TSLA””
Category Archives: Market Risk
Achegos Margin Call
Robert Gore teaches some great truths in his “Everything I Know About Business I Learned From The Godfather.” I grew up in that neighborhood so I never needed to read Gore. I got it every day. Bodies dumped in allies, Grazy Joey Gallo, Colombo. I lived within 200 feet of Don Carlo Gambino’s house. VeryContinue reading “Achegos Margin Call”
The Electric Slide
Tim Knight (Slope of Hope) on the “electric slide”: https://slopeofhope.com/2021/03/completely-unplugged.html Not long ago, all you needed to to as a company to guarantee success as a financial entity was to somehow associate yourself with electric cars. That’s over. Just take a look at the corrosive erosion taking place across the entire sector. My view isContinue reading “The Electric Slide”
Jerome Pow
Tim Knight at Slope of Hope: https://slopeofhope.com/2021/03/jerome-pow.html Well that didn’t take long. Yesterday, the good people of our once-great Republic had about half a trillion dollars shoved into their bank accounts. The great hope was that this mountain of “stimmy” would flow directly into equities, pushing the Dow to – – what? – – 90,000 in a few months? AddedContinue reading “Jerome Pow”
Nasdaq “Hull Breach”
As Tyler reports in ZeroHedge, markets are on the ropes: https://www.zerohedge.com/markets/nasdaq-crashes-through-critical-resistance-gives-march-gains Things have accelerated south as the day wears on, with US equities all down hard led by a 2.5% plunge in big-tech. Nasdaa is now down almost 1.5% since the end of February (and down almost 5% from Monday’s exuberant highs)… The losses spedContinue reading “Nasdaq “Hull Breach””
Hull Breach
Tim Knight (Slope of Hope) enumerates the support breaches: https://slopeofhope.com/2021/03/index-omnibus.html#more-194173 With the giant reversal taking place today, let’s take a fresh look at some important indexes, in alphabetical order. First is the $COMP, the Dow Jones Composite. This cracked through its trendline on Friday, but it has sprung right back above it. We’ll see ifContinue reading “Hull Breach”
Ron Burgundy: Boy, that escalated quickly. I mean, that really got out of hand fast.
Was looking so good right up to crashing support. Wedges in bonds and stocks, to be precise. Can you say “fear and loathing?” I see a red door and I want it painted black. Count on Tim Knight (Slope of Hope) to explain this in metaphysical terms we can all understand: https://slopeofhope.com/2021/02/the-problem-with-distortion.html My point isContinue reading “Ron Burgundy: Boy, that escalated quickly. I mean, that really got out of hand fast.”
ERCOT Margin Call
ERCOT is a “just-in-time” energy market without a capacity market and missing the ability to “call” adjacent systems or ready-to-go capacity to cover supply shortages. And so, – surprise, surprise – market clearing prices can get rather spikey when confronted by high demand and limited capacity. As reported by Zero Hedge: https://www.zerohedge.com/commodities/texas-grid-operator-warns-defaults-credit-crisis-develops The Texas energyContinue reading “ERCOT Margin Call”
Mind the Wedgies
Wedges are characterized by a contracting range in prices coupled with a trend – upward is a “rising wedge” while downward is a falling wedge. Wedges are transitive – they form near the top or bottom of a trend and often resolve within ~4 weeks. In the case of an upward trend, resolution can triggerContinue reading “Mind the Wedgies”
Cross-Asset Complacency at 20-yr High
What can possibly go wrong? Well, here’s JPM’s John Normand ,head of cross-asset strategy, (courtesy of ZeroHedge): https://www.zerohedge.com/markets/complacency-20-year-highs-jpm-models-warn-imminent-correction Current readings for individual indicators and the composite are summarized in charts 3 and 4. In Chart 3, four of the seven cross-asset measures have moved beyond the levels that have preceded previous corrections (short and long-term valuation, positioningContinue reading “Cross-Asset Complacency at 20-yr High”
Econophysics2020 