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Macroeconomic Analysis And Trading Ideas

Weekly Review: Bullish Inertia Remains (Read for Fundamentals)Bullish sentiment remains in the markets, despite some noise in the background. Where to look at: - Vaccine (expected to be released earlier than expected) o Can surprise positively - China – USA o Actual situation is not that tense, which may change - Technology (it has changed more into safe heaven rather a rick sector) o Salesforce provided good guidance PMIs and Job data to watch out for this week. - These indicators will manifest USA will recover employment quicker but it will take more time to Europe Overall, the markets will be more active because of the return from holidays and if we see good job data and PMIs, the markets can be in for another bullish week.
SP:SPXLong
by JoseDN
WHY IS GOLD GOING UP?PAUL KRUGMAN, AN INFAMOUS (((KEYNESIAN))), RECENTLY CLAIMED THAT THE PRICE OF GOLD WAS RISING DUE TO A FALL IN REAL YIELDS, NOT BECAUSE OF INFLATION! HIS BELIEF IS THAT INTEREST RATE YIELDS ON TREASURIES AND OTHER SAFE ASSETS BEING NEGATIVE ADJUSTED FOR INFLATION IS THE PRIMARY FACTOR OF DEMAND FOR GOLD, AN ASSET THAT HAS NO YIELD, ONLY CARRYING COSTS! HE DOES NOT BELIEVE THE DEMAND FOR GOLD IS FUELED BY A DESIRE TO SEEK PROTECTION FROM INFLATION! HIS POSITION CONTAINS MANY FLAWS, TOO MANY, IN FACT TO LIST IN ONE TRADING VIEW POST, BUT HERE ARE THE MOST FLAGRANT: 1) THE FALL IN REAL YIELDS IS DUE TO INFLATION OF THE MONEY SUPPLY, WHICH INEVITABLY LEADS TO PRICE INFLATION! A FALL IN INTEREST RATES IS CAUSED BY AN INCREASE IN AVAILABLE LENDABLE FUNDS, WHICH IS THE MOST DIRECT CONSEQUENCE OF FINANCIAL INFLATION! THIS IS INDICATED BY THE VELOCITY OF MONEY, AS THE VAST MAJORITY OF CURRENCY CREATED BY THE FINANCIAL SYSTEM AND THE CENTRAL BANK IMMEDIATELY FLOW INTO INTEREST-BEARING ASSETS, LOWERING THEIR YIELDS! 2) THE TRUE PRICE INFLATION RATE IS SEVERAL TIMES HIGHER THAN WHAT IS OFFICIALLY DECLARED, AND EXTRAPOLATING THIS FACT TO THE PAST HALF-CENTURY OF DATA, REAL YIELDS WERE INCREASINGLY NEGATIVE DURING THE 1980s AND 1990s, WHILE THE PRICE OF GOLD FELL, INVALIDATING HIS THEORY! 3) AS THE MONEY SUPPLY, RESPONSIBLE FOR PRICE INFLATION, HAS INCREASED FAR MORE THAN NOMINAL YIELDS HAVE DECREASED, THE FALL IN REAL YIELDS IS NECESSARILY MORE OF A CONSEQUENCE OF INFLATION THAN OF A LOW-GROWTH, LOW-YIELDING ENVIRONMENT! 4) A RISE IN ALL PRICES CAN ONLY BE DUE TO INFLATION, AND THEREFORE ANY PARTICULAR INCREASE IN PRICE IN AN ENVIRONMENT OF GENERAL PRICE INFLATION IS NECESSARILY A CONSEQUENCE OF INFLATION, REGARDLESS OF THE FACTORS FUELING ITS DEMAND! GOLD HAPPENS TO BE RISING FASTER THAN OTHER ASSETS/COMMODITIES AS IT HAS CONSISTENTLY PRESERVED ITS VALUE DURING PREVIOUS INFLATIONARY EPISODES WHILE REMAINING HIGHLY LIQUID! 5) IF A FALL IN REAL YIELDS WAS RESPONSIBLE FOR INCREASED DEMAND FOR GOLD, WOULDN'T DEMAND FOR CASH BALANCES AND PHYSICAL CASH BE EQUAL TO OR GREATER THAN GOLD, AS THERE IS WAY LESS CARRYING COST? YET THIS IS NOT THE CASE, EVIDENCED BY INCREASES IN VIRTUALLY ALL PRICES RELATIVE TO INCREASES IN M0/M1, A FALL IN THE DXY, AND, IRONICALLY, A RISE IN THE PRICE OF GOLD. 6) WHY IS THE PRICE OF SILVER AND METALS RISING AT A GREATER RATE THAN GOLD? THESE ASSETS ARE FAR LESS LIQUID AND ARE HISTORICALLY PERCEIVED AS VOLATILE PLAYS ON INFLATION! www.shadowstats.com www.zerohedge.com
COMEX:GC1!Long
by UnknownUnicorn4195243
THE FED WON'T BAIL OUT YOUR CREDIT CARD!THESE CHARTS ARE VERY SIMILAR! REAL ESTATE IS FAR DOWNSTREAM FROM FED POLICY, WITH MANY ECONOMIC ACTORS IN BETWEEN, ESPECIALLY COMPARED TO LARGE CORPORATIONS WHO HAVE ACCESS TO FINANCIAL DARK POOLS AND THE MANY FED PROGRAMS! THIS MAKES IT MUCH HARDER FOR THE FED TO PROP UP REAL ESTATE VALUES AND MUCH EASIER TO PROP UP THE VALUE OF CORPORATE STOCK AND DEBT! THIS IS SIMILAR TO THE SMALLER COMPANIES IN THE RUT, WHO MUST ACCESS CONVENTIONAL CREDIT MEANS, AND THUS ARE SUFFERING MUCH MORE THAN THEIR TECH COUNTERPARTS IN THE NDX! LENDING STANDARDS ARE TIGHTENING FOR MAIN STREET, AND IT IS ONLY A MATTER OF TIME BEFORE THIS TIGHTENING REACHES ALL LEVELS OF THE ECONOMY! THE FED WILL NOT BAIL OUT YOUR AUTO LOAN OR CREDIT CARD, AND EVENTUALLY BANKS WILL TIGHTEN LENDING CONDITIONS FOR EVEN THE LARGEST OF ENTITIES, IF THEY HAVEN'T ALREADY BEGUN TO.... www.nbcnewyork.com
TVC:NDQShort
by UnknownUnicorn4195243
4
Weekly Review: Consolidating the levels (Read for Fundamentals)The last hours of trading sessions have served to clear two subjects. 1. On the macro side, the third quarter GDPs indicators from USA and the EU were better than expected. 2. On the micro side, the biggest technology companies’ earnings beat expectations However, the geopolitics bring some noise to the market as Democrats and Republicans cannot reach an agreement over the stimulus package and Trump threats to postpone the election. Looking forward to next week, it will be to key to watch out the employment data on Friday. A moderate growth is expected and this will set the tone on the strength of the American labour market. Altogether, this week will be lateral with no big swings as investors will wait until Friday for the employment data.
SP:SPX
by JoseDN