Down goes the Dow

agip wrote:

gold plunging - down to 2009 levels and 16% in 52 weeks, 8% YTD.

some say this is China selling gold, trying to raise cash in a panic

But doesn't China have say 56 quadrillion in reserves? I can't say I understand how that works. But geez - all those folks who listened to those late night tv ads and bought "safe" "stable" gold have been hosed over and skinned alive. Esp since the conventional stock/bond portfolios they should have been in have done so well.

certainly not much currency fear in the world regarding the greenback.

so probably time to start buying commodities - clearly they are getting dumped

China is not selling gold.

D-E-F-L-A-T-I-O-N

Take a look at high grade copper, which is often considered a proxy for industrial production world-wide. And oil. And GSCI. And the Japanese Yen, among other things. There's also demand-supply imbalance with gold, as there will be with oil when Iran comes on line.

Copper is challenging the support of the January low, and that is the last support level on the charts before the 2009 low waaaaaay down there. I'm going short that one if the Jan low breaks with significant volume.

The way I see it, things look good for English-speaking countries only.

And GOI: You better be really well capitalized if you want to catch THIS falling knife.

Desperately Seeking Alpha wrote:

I want Chemical Reagent to return. I remember gente was riding his axx about trading DDM instead of SSO, so I looked them up today.

As of this moment, SSO down only 0.71%, but DDM down a full 2.24%. Their inverse etf's show the same difference, only positively. I understand volumes and tradeability, but that magnitude of difference, these aren't even in the same ballpark. Yes I know they track 2 different indexes and the dow is down way more today than the sp500. I don't know exactly what Reagent was doing or how, but the movements of DDM/DXD are significant.

As of today, the ATR

of DDM is 1.27 ( the end of yesterday 1.25); weekly volatility .92% and monthly 1.56%

SSO : 1.21 ( 1.24), .93% AND 1.60%.

not identical but close enough. Ironically the current ATR of SPY is 1.91 and the ATR of DIA is 1.70 When Proshares split DDM and SSO on 5/20 their ATRs were cut in half, the only reason to keep trading them as opposed to the underlying index ETFs was you had a small account. When CR made his alleged trade of DDM on 6/17-6/18; 68.66 buy, 69.40 sell, gain .74. Similar trade on DIA would have been 179.57 buy, 180.57 sell, gain 1.00 Incidentally, there was only 1 trade on DDM the 1st 5 minutes 6/18 at 69.40 and it was only for 100 shares.

I know exactly what CR was doing. In the aforementioned trade of 6/17-6/18, CR posts "Bought last night before close at 68.66" on 6/18 at 8:29 AM CDT (which is 9:29 EDT 1 minute before opening bell) and "I'm looking for a pretty big move today, as fed news sinks in" . He is watching the futures market which is showing a big gap opening

He did not post his buy after market close on 6/17 but only in the AM on 6/18 when he was sure the market was opening higher. He used the same procedure when he claimed to have doubled down earlier in the thread. His buys during the trading day were posted about 5-7 minutes after it appeared that DDM was moving up; one time he posted a buy, saw after posting, it had moved lower, claimed it was an imposter, but when DDM moved higher again, claimed to have really made the trade at said price. I am amazed that there are people who post here with backgrounds in finance and could not see CR was a sham.

coach d,

i have a small position in gold outside of wife's jewelry. I am not buying commodities. Currently I am short China.

GOI

I think that's all just sour grapes. While that could have been what he did on his early buy, it probably wasn't, given everything else that he posted.

I have also tracked his alleged trades according to the time stamps on his posts, and both his calls and his timing were legit.

There is no question that he did not actually execute the trades, meaning that there are 2 possibilities: 1) that he was fantasy trading, or 2) that he is being employed as a proxy.

Judging by his explanation, #2 seems to be the case.

I would be curious to know his call record since he stopped posting.

"China" is not selling gold, but many "Chinese" have.

Regarding gold, we may be witnessing the death of the "money talks, b.s. walks" era.

Gold had substantial intrinsic value in antiquity as a workable, non-tarnishing metal with a reasonable melting point. It's "value" today is as a "store of wealth", or as a currency hedge, in both of which categories it has substantial competition. Manipulations are working to tilt the playing field in favor of its competitors.

Ghost of Igloi wrote:

coach d,

i have a small position in gold outside of wife's jewelry. I am not buying commodities. Currently I am short China.

GOI

Take a look at CMD, which is a proshares ETF that is 200% short the Bloomberg Commodity Index. I don't know that I'd actually buy this because the trading volume is very thin, and a bunch of this is the collapse of oil, but ALL industrial commodities are falling like a rock, and, frankly, I'm a lot more concerned about what I see in industrial commodities like high grade copper than I am about stock index PE levels right now.

My sense of the macro theme here is that more supply came on at the end of the big commodity move through 2011, and now the high marginal producers in copper and gold, as well as oil, are not pulling out in response to reducing demand. So, the markets smell blood and are going to go in the same direction until the level of pain is sufficient (just like when the bond market knows the FED "needs" to do something, and it keeps going and going until the FED does the deed--and then that's the end of the move).

I don't have any commodity positions right now, but intend to short copper and buy the british pound - japanese yen cross (long pound + short yen).

I'm afraid that the combination of Greece/Euro, Asia, and commodity deflation puts Janet Yellen in a box, so rates stay low, PEs continue to grow, and one day (not now) everybody says "SELL SELL SELL" all at the same time.

coach d,

Generally see environment in a similar fashion. In my view China over built infrastructure and manufacturing capacity while developed economies matured with declining demographics. A possible outcome is that investors lose confidence that central banks solve these problems with more easy money. If that is the outcome, cash will be the asset of choice.

one of my favorite signals today - small caps up around 40 bps and large caps down around 20

often that is bullish

I've been trying to reduce interest rate sensitivity lately - I sold all my dividend type strategies and replaced them with standard market cap weighted funds.

dividend strategies prob will continue to suffer if rates rise.

They have to rise something, D - the fed knows we need to raise rates so we have a tool in the next recession.

but not much growth or inflation going on anywhere...

agip,

Personally I see the move from large to small caps as big money trying to churn another area of the market. I see it just as speculation, of course reflecting my Bearish view. You saw the same thing the other day in high multiple stocks large capitalization stocks.

I'm no trader, but I follow the chemical reagent proceedings with interest.

La gente, even though you profess to be "in the business", you seem to me to have made a very basic mistake in your analysis, by using the ATR. The ATR is reported as a 14-day moving average, which tells you nothing about the highest ranges experienced during that period. It is obvious that chemical reagent did not trade every single day, hence using ATR as a criticism of his trading vehicle is inappropriate. It is also obvious that he traded across daily ranges, a difference which is not reflected in the comparison you have provided. Furthermore, ATR uses absolute value, yet chemical reagent only traded DDM on upswings, something again not reflected in your criticism.

From where I sit, you have in no way proven that SSO is more volatile, or swings more, in the relevant direction and in the relevant time intervals, than does DDM.

Dow is now negative for the year. Falling oil and copper prices. How many of you will admit the investment environment is changing?

Sally V: "Where are all the "Chicken Littles" now? It's been the same old wailing and gnashing of teeth for months around year, yet the market pushes on."

I guess I wan't alone in my views. Read article on thoughts from Ray Dalio of Bridgewater.

http://www.cnbc.com/2015/07/23/china-crash-is-a-canary-in-coal-mine-strategist.html

Regards,

Igy

Ghost of Igloi wrote:

Dow is now negative for the year. Falling oil and copper prices. How many of you will admit the investment environment is changing?

total stock market up decent 3.4% (VTI)

world stocks up a stronger 4.1% (VT)

why do I think you are looked at all the major indices and cited the Dow because it is the only one in negative terretory? Why?

That's the problem with being a cherry picker, Igy - you lose credibility. What else are you cherry picking in support of your argument at the cost of the truth?

copper? does its price mean anything? in 2014 it was down around 20% while US stocks rose around 12%.

Oil? stew of issues.

all this said, the market does feel sluggish.

agip,

I am not cherry picking as I am so oftern accused. I am pointing out the market is losing trend uniformity. Asset performance shows something is not right. If you think otherwise fine, I am sure over the next year we will see who is right.

Igy

Ghost of Igloi wrote:

Sally V: "Where are all the "Chicken Littles" now? It's been the same old wailing and gnashing of teeth for months around year, yet the market pushes on."

I guess I wan't alone in my views. Read article on thoughts from Ray Dalio of Bridgewater.

http://www.cnbc.com/2015/07/23/china-crash-is-a-canary-in-coal-mine-strategist.html

Regards,

Igy

More salve for your confirmation bias.

Look, the market goes up and down. I don't come on here posting "I told you so" every day that it's up. Why do you feel the need to do so when it's down? (I believe I know the answer to that question, but then I'm only an amateur psychologist.)

amazon just put on 40 billion in market cap after hours - almost a double this year - that giant stock. wow. a retailer!

Sally V,

You did author the "chicken little" comment. How do you expect me to react?

Igy

agip,

And a retailer that has a market cap larger than Wal Mart. If you project AMZN earnings beat for the next year it would trade at 750 times earnings while WMT is at 15 times. That shows me the insanity of this market. AMZN is a great company, but a poor investment.

Igy

Ghost of Igloi wrote:

agip,

And a retailer that has a market cap larger than Wal Mart. If you project AMZN earnings beat for the next year it would trade at 750 times earnings while WMT is at 15 times. That shows me the insanity of this market. AMZN is a great company, but a poor investment.

Igy

fair

amazon is such a strange company tho - hard to draw any conclusions from that one. It has huge sales but terrible earnings. The hope is always that they can turn those sales into earnings.

The issue is exactly this:

Price to sales: 2.47, which is high, but not a real outlier.

P/E: 168. Obviously insane.

ev/ebitda: 47. Also insane.

I'm not aware of another company that has that kind of leverage - if it gets its earnings numbers in line with what other retailers make, it's a gold mine. and the bulls on the stock think they can. I have no clue.