Down goes the Dow

Ghost of Igloi wrote:

agip,

The Fed and other central banks are a reality. The operative questions is have central banks run up against the natural limits of what they can do in terms of effective policy. That is where we may be, certainly Draghi and Kuroda have had some hiccups lately.

Igy

Yeah well that's the thing about economics...no one knows anything.

So the Doha meeting was a bust - we will see if coach d was right that we could see big moves on Monday.

Well, the opening is going to be interesting:

http://www.barchart.com/headlines/story/1250757/oil-meeting-in-qatar-ends-without-freeze-as-iran-absent

The only question is whether the market is going to give the oil producers more rope to hang themselves to hang themselves with. There IS something to be said for high frequency trading perhaps.

Once again, you are hereby warned.

Sunday Globex futures open at 1700 eastern for stock indexes and 1800 for oil and metals. But you can't depend on what happens in Asia being repeated in the US.

Well, I did call it (so far). SP500 and crude opened sharply lower. Oil down 2.57, SP down 11. We'll see what the broad US market does, but I took profits on both at the Globex open.

[quote]coach d wrote:

Well, I did call it (so far). SP500 and crude opened sharply lower. Oil down 2.57, SP down 11. We'll see what the broad US market does, but I took profits on both at the Globex open.[/quote

Spx down 11? Nail down the windows.

Jim Grant, The United States of Insolvency:

http://time.com/4293549/the-united-states-of-insolvency/

Igy

Agip,

I am not joining the dark side, but I am taking a bunch of chips off the table for now. On S&P trading, I held out from 12/11/2015 to 2/11/2016 because of concern over what the FED would do and its impacts on the market (correctly I think) and have made 2 long trades since: 1811->1885 and 1947->2072 basis cash, which results in almost exactly 200 full S&P points profit, and at 15:1 leverage, that's over a 100% return if I segregated out just the 15 S&P contracts. Too much money at stake to leave to chance, and similar situations in oil and palladium. I am not forecasting a crash or anything, but as I said above, I took a bunch of chips off the table.

S&P futures now down 13.5 and Dow futures down over 100 AND FALLING in Asia trading. No doubt, tomorrow on the NYSE is going to be ugly. I think the market will start looking at the FOMC meeting announcement on the 27th and I suspect what is likely to happen in the commodities markets in the next couple of weeks makes hiking rates any time soon even more unlikely. Unfortunately, with any help from oil (CAPEX), I think it also makes an earnings turn any time soon also more unlikely.

This is not for me, but quite a bit of big money is going into EM and EAFE, so maybe a new investing cycle is gradually starting.

coach d wrote:

Agip,

I am not joining the dark side, but I am taking a bunch of chips off the table for now. On S&P trading, I held out from 12/11/2015 to 2/11/2016 because of concern over what the FED would do and its impacts on the market (correctly I think) and have made 2 long trades since: 1811->1885 and 1947->2072 basis cash, unlikely.

2072 ???? Globex open high was 2065.!!!!

Wall Street stocks were set to decline Monday after a meeting of major oil producers in Doha, Qatar failed to reach an agreement on a production freeze, triggering a sharp slide in oil prices. On the bright side, stock futures trimmed a deeper rout seen early in Europe's session, triggered by what was a near-6% drop in U.S. crude futures prices at one point.

The oil producers that supply nearly half the world's output met on Sunday but failed to reach a deal on output, which markets had been hoping for. The meeting faltered after Saudi Arabia reiterated its demand that Iran take part in any deal to freeze production. Over the past year, stocks have closely followed moves in crude futures because they offer signs of the global economy and banks, which have large exposures to oil-and-gas firms.

"It is possible that we've seen the worst of the initial reaction to the failure to achieve a deal in Doha, but I do think further downside could follow in the coming weeks," said Craig Erlam, senior market analyst at Oanda, in emailed comments.

"I think energy companies will remain under pressure today and while that could weigh on U.S. stock markets, we could see them recover overall, as they have at times over the past month when they've continued to push on even when oil has been falling," said Erlam.

I hear you and find it hard to disagree.

My main complaint about this market is that it seems driven by everything other than earnings and fundamental health. It is driven by commodity prices, fed action, inflation...I'm not sure what I am supposed to be doing here - judging the value of stocks or predicting how traders will respond to the next governmental or oil related news.

I think I'll probably buy some gold but hang in with stocks - they are above hte 200 day, which to me is the most important tell.

For everyone, but probably Coach D would find it most interesting - I just read a fascinating book that tells a first person story of the history of wall street from the 70s onward. From the view of an options trader, which is why D might find it interesting.

It deals with Martin Armstrong, the Hunt silver crisis, the 87 crash, all the way up to the subprime wreckage. Gave me a view into how options guys see the world, and how flows are manipulated and abused.

It might be a little outdated, but a fun read and a nice look into how institutional traders think about the world.

http://www.amazon.com/Not-Grandfathers-Wall-Street-Derivatives-ebook/dp/B015NNWE6Q

Not My Grandfather's Wall Street, von Lieb.

Which is a psuedonym.

Part of the fun is that he slightly changed everyones' names so you have to try to figure out who is talking about.

CSFB hedge fund index *minus* 2.26% through end of march

vanguard balanced index +2.0%, same period

hedge funds have truly been awful for years. Why is that? Are the fundamentals so weird that hedgies are floundering? Have flows become so dark that it is impossible to follow them? Too many extraneous events?

whatever reason, the hedge fund biz is in serious, serious trouble.

U.S. stocks were trading higher in midday trading Monday as Wall Street shrugged off a drop in crude futures, after a closely watched meeting of major producers in Doha, Qatar on Sunday failed to result in a hoped-for freeze of oil output.

Crude oil and energy stocks had been down sharply after news of the failure to strike a deal but, although still firmly lower, have come off their worst levels on the session.

Meanwhile, investors were digesting better-than-expected earnings reports from companies such as Hasbro Inc.

The S&P 500 gained 8 points, or 0.4%, to 2,089, with the sharpest turnaround occurring among energy-sector names, which is trading 0.4% higher after leading the S&P 500's 10 decliners early in the session, down 1.3%. Eight of the index's 10 sectors were trading in positive territory.

"It is remarkable that stocks are able to shrug off a drop in oil and climb. Maybe we moved on from the tyranny of oil," said Michael Antonelli, equity sales trader at R.W Baird & Co.

Antonelli noted that higher prices in stocks reflect general optimism as investors no longer fear a recession.

MarketWatch wrote:

"It is remarkable that stocks are able to shrug off a drop in oil and climb. Maybe we moved on from the tyranny of oil," said Michael Antonelli, equity sales trader at R.W Baird & Co.

.

let's hope so

only econ news is a housing conditions index, which was flat, but at a fairly high level.

Market Watching

"It is remarkable that stocks are able to shrug off a drop in oil and climb. Maybe we moved on from the tyranny of oil, to the tyranny of the institutional traders. Earnings are coming and the traders are praying for a miracle. Unfortunately, most buyers will find that stock valuations are not supported by earnings." said Igy.

Ghost of Igloi wrote:

Earnings are coming and the traders are praying for a miracle. Unfortunately, most buyers will find that stock valuations are not supported by earnings." said Igy.

Earnings are already here.

Try,

My post from Friday, please try to keep up:

"As of 4/15/2016 35 (8.6%) S&P 500 companies have reported for Q1 2016. 12 beat on GAAP earnings, and 20 beat on sales; all on reduced estimates. Stock buyback continue to add a 4% tailwind to earnings."

Igy

Read more:

http://www.letsrun.com/forum/flat_read.php?thread=5369837&page=552#ixzz46DMS8lBu

You make my point while contradicting yourself. Ouch.