Land Of The Rising Yen
As the Brexit drama unfolded we remarked that it would be difficult to come up with a topic that sounds more boring than “British politics.” That said, “Japanese fiscal stimulus” would be right up there on the “snoozers” list if you didn’t know the context. Of course if you do know the context, you know…
Junk Energy: Too Rich For My Tastes
Two weeks ago, we issued a “Friday chart challenge” in which we showed you the following graphic: The point, of course, was to demonstrate that the market is pricing in less relative default risk for HY energy than at any other time since late 2014. That of course is absurd given the global deflationary supply…
Signs of Volatility and a Trade Setup
Signs of volatility slowly slipping into the market. The overall market continues its sideways move as it has over the last 2 weeks. Tonight let's look at a few canaries in the coal mine and a trade set up...
Now Everyone’s Calling A Top
Ok, so let’s get to a couple of things you might have heard making the rounds on Monday. For one thing, Goldman said sell some stocks last night. The bank has “tactically” downgraded equities on a 3-month time horizon. We’d love to know what an “un”-tactical downgrade looks like. It’s the same old story, but…
Weary, Wary Investors Cast Suspicious Eye At … Everything
Over the weekend, we characterized markets as “despondent.” Some of that’s probably seasonal but you get the increasingly palpable sense that everyone is just waiting around on something to snap. We kind of bump along from data point to data point with nothing really making a dent in terms of risk assets, a fact which…
Market Shrugs Off Bad Data
Even if you think bad news is good news because the Fed will start another round of QE the risk continues to be to the downside. I've made my entire trading career around selling volatility and collecting premium. I have never seen volatility this low. With all the risks out there in the market you…
“Wishy, Washy” Kuroda Fails To Deliver: Are We Near The End?
Remember what we said two days ago about "expectations?" They can be dangerous things. Going into Friday's BoJ decision, expectations were in fact running so high it wasn't even clear what they were. ”If the BOJ doesn’t move this time, there’s a possibility that the yen will strengthen further," Hiroaki Muto, chief economist at Tokai…
AMZN and GOOGL Earnings Trade Setups
After hours today AMZN & GOOGL reported earnings. Both companies beat their expectations and have moved close to 1 standard deviation to the upside. As we have talked about if you look at earnings trades over 1000s of occurrences there is no statistical edge in Iron Condor trades. However, there is an edge in placing…
“Japanification”: A New Interpretation
Ok, we’re just going to level with you here because there’s really no way to spin this: that was all kinds of silly. If someone showed you this chart… ...and then subsequently asked you whether you thought the Fed statement was dovish or hawkish what would you say? Well, you’d probably say “dovish,” right? You’ve…
Meet the New Boss, Same as the Old Boss
Earnings season in full force as stocks like Facebook rockets higher based on earnings news. There was little news from the Fed announcement today. The market has become sensitized to the veiled threats of increasing rates. If we look at the Fed watch tool we can say market is expecting a low probability of a…