The bears den

[NewInvestor]

Yup, it will cause a deep correction for 2-3 weeks. Then Fed cut rates in Jul, markets rebound. Not enough? Fed cut rates again Sep. Still not enough? Fed cut rates to zero in Dec. Hahaha!

I agree. Even if both say that they will fight to the end, the correction will just be a buying opportunity. Because I believe they will eventually reach a trade deal.

 

[wutawa]

The lower the cost of funds, the better for REITs

Really? I just cash out hong leong fin. Hopefully can buy some mapletree log tr at a good price.

 

[limster]

Really? I just cash out hong leong fin. Hopefully can buy some mapletree log tr at a good price.

you mean before this you didn't know that low interest rate good for REITs?

 

[Kapish]

just a tweet from trump is enough to cause temporary dip in market. just follow his twitter closely and you can snatch some bargains.

 

[coolhead]

Will trump sanction on Iran over weekend cause gold to ejaculate again?

Sent from HMD Global TA-1004 using GAGT

 

[DukeCS33]

It's a mad world...

What happens if you have too much money and returns are lack lustre in the bond markets? at2% for 10years in a UST investment, surely you would invest into higher risk assets - so the stock market would be a beneficiary as would bitcoin etc... anything that strengthens the flood of liquidity would just push asset prices higher while the reverse may tank the markets. In the same grain, fed cutting rates would triumphed over trade war. Only when fear takes root would we see capitulation. Yes so its a mad world... good for those positioned right and woe to those on the wrong side of the fence.

There are plenty of reasons for the Bears to get worried but so far none could defeat the bull's ammunition of liquidity. Based on this link:

https://www.cnbc.com/2019/06/18/inv...ds-is-now-most-crowded-trade-bofa-survey.html

Professional investors are not participating in this rally and for good reason but yet the S&P breached a new high so what gives? A market that has little participation by the professionals is not a market that I would trade direction with conviction.... but yet, the passive funds are driving this move higher - so case of active vs passive? Who is right? It is indeed a mad mad world at least based on the old macroeconomics theory that I have been trained in.

In terms of trading, I would continue intraday plays - which right now, is my best performer at some 75% win rate. Swing trading performance over the last 2 months dropped to breakeven - I have taken very few trades due to lack of conviction in market direction. Going forward, I may stick to intraday plays as that has the best effort vs reward ratio, requiring only some half hour of prep just before market opens.

 

[limster]

https://www.advisorperspectives.com...19/margin-debt-and-the-market-down-3-4-in-may

Yet another indicator to consider

TL-DR - watch this indicator, but it is not screaming market crash at the moment.

 

[coolhead]

https://www.advisorperspectives.com...19/margin-debt-and-the-market-down-3-4-in-may

Yet another indicator to consider

TL-DR - watch this indicator, but it is not screaming market crash at the moment.

https://wolfstreet.com/2019/06/04/global-semiconductor-sales-plunge-but-why/
So far semicon sales as a leading indicator is still continuing the drop from peak in oct2018. The good news is that the drop is turning to trendline. Have to see if it will drop further.

Sent from HMD Global TA-1004 using GAGT

 

[Mecisteus]

Will trump sanction on Iran over weekend cause gold to ejaculate again?

My take is the gold bull is back.

From here on, the gold price will continue rising.

 

[Mecisteus]

https://wolfstreet.com/2019/06/04/global-semiconductor-sales-plunge-but-why/
So far semicon sales as a leading indicator is still continuing the drop from peak in oct2018. The good news is that the drop is turning to trendline. Have to see if it will drop further.

I consider any dips as good buying opportunities.

We will not be using less chips going forward. Chips will be needed in more devices. From medical to autonomous to 5G. Prospects are bountiful.

 

[coolhead]

My take is the gold bull is back.

From here on, the gold price will continue rising.

I was hoping to read about arguments for gold bear over the weekend at least to see if there is a balanced and contrarian view to the gold bulls. Unfortunately, I couldn't find a single article arguing for a gold bear since q4 2018.

My take for a gold bear argument is that there are 2 arguments for it:
1) stock market remains the most sought after asset to chase returns during QE/interest rate cut. This is especially true if US economy(not stock market) continues to at least trudge along so fed won't have a rate cut. I still don't foresee a rate cut going into September 2019.
2) gold/silver ratio is 90:1 which makes silver even more undervalued compared to gold.

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[Mecisteus]

I was hoping to read about arguments for gold bear over the weekend at least to see if there is a balanced and contrarian view to the gold bulls. Unfortunately, I couldn't find a single article arguing for a gold bear since q4 2018.

My take for a gold bear argument is that there are 2 arguments for it:
1) stock market remains the most sought after asset to chase returns during QE/interest rate cut. This is especially true if US economy(not stock market) continues to at least trudge along so fed won't have a rate cut. I still don't foresee a rate cut going into September 2019.
2) gold/silver ratio is 90:1 which makes silver even more undervalued compared to gold.

Fundamentals aside, I bought gold purely on technicals.

Breaking a long term (5 years) sideways market is a bullish sign to me.

 

[coolhead]

Fundamentals aside, I bought gold purely on technicals.

Breaking a long term (5 years) sideways market is a bullish sign to me.

Oh yes it's true it's technically bullish from many perspectives too. That multi year resistance.

Sent from HMD Global TA-1004 using GAGT

 

[DukeCS33]

I was hoping to read about arguments for gold bear over the weekend at least to see if there is a balanced and contrarian view to the gold bulls. Unfortunately, I couldn't find a single article arguing for a gold bear since q4 2018.

My take for a gold bear argument is that there are 2 arguments for it:
1) stock market remains the most sought after asset to chase returns during QE/interest rate cut. This is especially true if US economy(not stock market) continues to at least trudge along so fed won't have a rate cut. I still don't foresee a rate cut going into September 2019.
2) gold/silver ratio is 90:1 which makes silver even more undervalued compared to gold.

Sent from HMD Global TA-1004 using GAGT

https://goldsilver.com/blog/if-stock-market-crashes-what-happens-to-gold-and-silver/

Seems to support your reasoning depending on whether you see the negative correlation between Gold and the stock market continuing and if the stock market is still heading higher. My only concern with this line of reasoning is that correlations do break down. And more so given that we have central banks intervening heavily across most markets - gold included.

 

[Trader11]

My take is the gold bull is back.

From here on, the gold price will continue rising.

I find gold is abit toppish for now....

 

[coolhead]

https://goldsilver.com/blog/if-stock-market-crashes-what-happens-to-gold-and-silver/

Seems to support your reasoning depending on whether you see the negative correlation between Gold and the stock market continuing and if the stock market is still heading higher. My only concern with this line of reasoning is that correlations do break down. And more so given that we have central banks intervening heavily across most markets - gold included.

It's true about central banks intervening which will heavily influence the gold price. If I look at all asset classes, e.g stocks, bonds, gold, cash, the returns on stock is the highest followed by bonds/gold followed by cash.

Apart from fed intervention(fed funds rate), gold is also influenced by inflation. In mathematical terms, it goes by real interest rate = fed funds rate - inflation.
Real interest rate has very high correlation with gold price.
In this case as the market is pricing in the fed funds rate to be cut 0.25-0.5% while inflation currently holds steady, real interest rate is expected to drop and hence, it is natural that gold prices rise.

Apart from above mathematical equation, there is a need for stocks to be dismal in performance for hot money to flow to gold which is kind of a mixed thing because we have never seen such aggressive intervention in history by the fed in mitigating a recession before the recession even occur. Hehe... So this is a mixed bag.

But for gold to rise sustainably, the above factors must take hold.

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[DukeCS33]

It's true about central banks intervening which will heavily influence the gold price. If I look at all asset classes, e.g stocks, bonds, gold, cash, the returns on stock is the highest followed by bonds/gold followed by cash.

Apart from fed intervention(fed funds rate), gold is also influenced by inflation. In mathematical terms, it goes by real interest rate = fed funds rate - inflation.
Real interest rate has very high correlation with gold price.
In this case as the market is pricing in the fed funds rate to be cut 0.25-0.5% while inflation currently holds steady, real interest rate is expected to drop and hence, it is natural that gold prices rise.

Apart from above mathematical equation, there is a need for stocks to be dismal in performance for hot money to flow to gold which is kind of a mixed thing because we have never seen such aggressive intervention in history by the fed in mitigating a recession before the recession even occur. Hehe... So this is a mixed bag.

But for gold to rise sustainably, the above factors must take hold.

Sent from HMD Global TA-1004 using GAGT

It is senseless to be holding on to gold unless there is risk aversion and a real danger that real interest rates are dropping. I think the single biggest driver is central bank buying gold.

https://smallcaps.com.au/china-joins-russia-gold-buying-binge-east-diversify-greenback/

There are various reasons for their action - trade war, political leverage, US rates dropping and therefore affecting the strength of the USD, reserves diversification.

Like you, I think there is a high bar to cutting rates. I do not think the increased in tariffs from the trade war is a trigger either as this means increased prices and therefore increasing inflationary pressures. A slowdown wrought about a trade war may be a possible reason but it remains to be seen... right now, other central banks are easing rates (RBA, ECB signalling more QE, BOJ, BOE etc) That may reduce Fed's need to do so as the world is already awashed with liquidity. And we probably may need to observe a few more rounds of economic data and a drastic slowdown in employment before the Fed may pull the trigger.

 

[coolhead]

It is senseless to be holding on to gold unless there is risk aversion and a real danger that real interest rates are dropping. I think the single biggest driver is central bank buying gold.

https://smallcaps.com.au/china-joins-russia-gold-buying-binge-east-diversify-greenback/

There are various reasons for their action - trade war, political leverage, US rates dropping and therefore affecting the strength of the USD, reserves diversification.

Like you, I think there is a high bar to cutting rates. I do not think the increased in tariffs from the trade war is a trigger either as this means increased prices and therefore increasing inflationary pressures. A slowdown wrought about a trade war may be a possible reason but it remains to be seen... right now, other central banks are easing rates (RBA, ECB signalling more QE, BOJ, BOE etc) That may reduce Fed's need to do so as the world is already awashed with liquidity. And we probably may need to observe a few more rounds of economic data and a drastic slowdown in employment before the Fed may pull the trigger.

Well, it's not for me to dictate but the market is already pricing in a 0.25-0.5% rate cut by end of this year. this itself will cause real interest rates to drop. To date we have not seen a trade war causing both economic slowdown and increased inflation but let's just say if these happen, then it's a double bonus to gold price since real interest rate will drop even more.

The part you mentioned about other central bank easing rates, I suddenly recalled about this mechanism of carry trade that took place a few years ago, something like liquidity chasing for returns and since fed interest rate is relatively higher, liquidity will shift in that direction towards stocks/bonds. Well that could prop up the US dollar and drive down the price of gold.

Sent from HMD Global TA-1004 using GAGT

 

[DukeCS33]

Well, it's not for me to dictate but the market is already pricing in a 0.25-0.5% rate cut by end of this year. this itself will cause real interest rates to drop. To date we have not seen a trade war causing both economic slowdown and increased inflation but let's just say if these happen, then it's a double bonus to gold price since real interest rate will drop even more.

The part you mentioned about other central bank easing rates, I suddenly recalled about this mechanism of carry trade that took place a few years ago, something like liquidity chasing for returns and since fed interest rate is relatively higher, liquidity will shift in that direction towards stocks/bonds. Well that could prop up the US dollar and drive down the price of gold.

Sent from HMD Global TA-1004 using GAGT

Yes which is why I do not understand the rise of gold based on Marco. I do see the reason to be central bank moving towards gold as the main driver.

 

[focus1974]

Are you all watching too much indicators?