Stock Market Discussion, Chat About the Latest Market Action

[YanC]

I keep hearing that real estate is crazy expensive, some comparing it to how it was in 2006 before the big crisis, that it's gonna crash down hard because of interest rates... Well maybe, but I found this graph quite interesting:

This is basically real estate relative to M2. Shows that up until 2005-2006, the price of real estate grew much faster than the money supply, while they have both been quite stable against each other since ~2012.

 

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[Kevin88660]

BRICS' new gold-backed currency is coming, but first watch this move from Saudi Arabia at the BRICS summit - Andy Schectman

www.kitco.com

There is a lot of hype about what the potential new "Gold backed BRICS currency" will look like .

Different pundits are saying different things and guessing different outcomes that we will only know after 22 Aug.

But based on various sources, I am guessing this is what it is going to look like.

It is more like a cash-settled traded settlement done with reference the gold price.

For instance, if country A imports from country B, there are currently these options for payment from country A to B: payment in currency B, payment in currency A, payment in a third alternative that has a large global recognition.

Country B is going to sell the goods to Country A in ounces/kgs of gold. But instead of getting country A to deliver the gold physically, this game of "with reference to gold", country A can pay using a currency that is "gold equivalent" because they can use the currency to purchase gold from a large and liquid market.

Newyork and London are known to be the leading market for gold. But China and Russia have catched up on that.

Moscow Exchange to launch perpetual gold futures in July

interfax.com

The Shanghai International Gold Exchange and Its Role in De-Dollarization

This article is a primer on the Chinese gold market and the Shanghai International Gold Exchange (SGEI). De-dollarization by using yuan to settle international trade and store surpluses in gold through the SGEI is discussed.

www.gainesvillecoins.com

In theory, country B can accept Dollar, Euro, GPB, RMB or Ruble, but politically speaking, the countries joining BRICS are going to accept RMB and Ruble only. The purpose is to find non-western payment alternatives that relieve them from control by the Western financial hegemon.

In short if you owe me 1 ton of gold from trade, you can pay me the amount in Ruble and RMB that I can procure from the Shanghai and Moscow gold exchange.

The recipient country B can ask for delivery from Chinese or Russian market immediately to lock in their revenue in gold. Alternatively, for logistic reason, they can keep the cash and accumulate it into a bigger amount before asking for physical delivery to lower the transportation cost. What if the gold price go up later? If they fear that they can long gold futures in the Chinese and Russian market to hedge that risk. I guess this will be the most commonly used approach.

What does this mean to financial market and business?

If indeed the gold settlement standard arrives, domestic trade will still be done in domestic fiat currency not backed by gold. But in international trade, especially when you export to a nation of BRICS member, your good and services has to be priced in gold. Building a website for 0.2 ounces of gold for instance.

Since no fiat currency is actually backed by gold (a fixed changed rate between fiat and gold like what U.S. did in the past $35 U.S. dollar for one ounce of gold), all paper fiat money will depreciate against gold.

 

[Kevin88660]

My trading play will be focused on leveraged PM etfs and precious metals call options for the BRICS event.

Gold and other precious metals should appreciate against the dollar.

But there might be heavy U.S. market intervention to defend the King Dollar. If that happens, VIX will go through the roof.

Exchange Stabilization Fund - Wikipedia

en.wikipedia.org

Plunge Protection Team (PPT): Definition and How It Works

The Plunge Protection Team is a nickname for the Working Group on Financial Markets, which makes recommendations to the U.S. president.

www.investopedia.com

Hence I am building my position in leveraged VIX etf as well.

 

[loop101]

Time to see what's up.

https://twitter.com/i/web/status/1691121657526759424

View: https://twitter.com/burrytracker/status/1691121657526759424

 

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[MJ DeMarco]

From my news ticker: Stock market rockets higher on dismal job report!

Time to see what's up.

Well that hasn't panned out.

 

[socaldude]

Time to see what's up.

Where do they get this data to conclude that he made a big bet like that?

I mean, if a big order comes in, most of the volume has to be on the offer and mid-market side and almost nothing on the bid side for it to be an opening buyer.

 

[MJ DeMarco]

Where do they get this data to conclude that he made a big bet like that?

I forgot the form, I think it is an SEC filing, a 10-K or something.

 

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[MJ DeMarco]

Whew, REITS took a beating today!

 

[socaldude]

Cramer says buy stocks now so you don’t miss out on the rally.

These market reactions are interesting after the Fed meetings. They are more telling than anything that happens the day of FOMC.

The Fed is still trying to “break” something else in the economy.

That 10 year yield did move up above 4.3%. I think that’s the level they were watching. I think they are watching 5.1% in the 2 year yield.

 

[MJ DeMarco]

Weekly 3 year chart ... down nearly 60%. No further comment.

 

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[ZCP]

Buy the dip! Lol

Dividend stocks and my own companies are my focus.
Feel for you cats with large holdings.

 

[MJ DeMarco]

Is the recession finally here? The markets and bonds are acting like it.

 

[ZCP]

 

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[Kevin88660]

Is the recession finally here? The markets and bonds are acting like it.

Fed still hawkish. Dollar index YTD highest. Bearish in the short run..

 

[socaldude]

Is the recession finally here? The markets and bonds are acting like it.

The recession comes after the yield curve flattens and normalizes a bit. It doesn't happen while the yield curve inverts.

If the 2 year yield starts coming down while the 10 year yield remains the same, that will spark market concern about the economy.

 

[loop101]

Live trading with no stop loss...

https://twitter.com/i/web/status/1711893816888930308

View: https://twitter.com/ClownWorld_/status/1711893816888930308

 

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[YanC]

If you had bought TLT, the largest bond ETF, in 2004 and held until today, you would barely break even. This is not even accounting for 20 years of inflation. I guess there is an opportunity there at some point, but when ...?

 

[socaldude]

Live trading with no stop loss...

Personally, I can catch a decent portion of profit or loss with just my gut or intuition or naked eye.

For example, today I made a quick $1,340 on some SPY calls. I woke up and did my usual routine checkup on the market. I said to myself, I don’t know why this selling isn't gonna hold and is gonna rocket up. And sure enough it did and cashed out after weakness.

 

[Kevin88660]

I am building call options positions and futures long positions in crude oil.

The market imo is underestimating the chance of Iran getting much more involved in the on going ME conflict.

Israel is doing a full mobilization of 400k men, preparing to fight on two fronts.

Iranian proxies have been hitting U.S. military bases in Iraq directly, while China sends 6 warships to middle east.

I don’t think Nathanyahu could afford to be soft either or risking becoming the second Yitzhak Rabin.

WSJ News Exclusive | Iran Helped Plot Attack on Israel Over Several Weeks

The Islamic Revolutionary Guard Corps gave the final go-ahead last Monday in Beirut.

www.wsj.com

Assassination of Yitzhak Rabin - Wikipedia

en.m.wikipedia.org

 

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[socaldude]

Moment of truth for $SPX this week. Will it break out of its range?

Well, my opinion watching breadth and the vix closely while it was consolidating last week. That wasn’t enough. We will probably see a quick sell-off to 4300.

A fast move comes after a failed move.

 

[Kevin88660]

I am building call options positions and futures long positions in crude oil.

The market imo is underestimating the chance of Iran getting much more involved in the on going ME conflict.

Israel is doing a full mobilization of 400k men, preparing to fight on two fronts.

Iranian proxies have been hitting U.S. military bases in Iraq directly, while China sends 6 warships to middle east.

I don’t think Nathanyahu could afford to be soft either or risking becoming the second Yitzhak Rabin.

WSJ News Exclusive | Iran Helped Plot Attack on Israel Over Several Weeks

The Islamic Revolutionary Guard Corps gave the final go-ahead last Monday in Beirut.

www.wsj.com

Assassination of Yitzhak Rabin - Wikipedia

en.m.wikipedia.org

Didn’t work out well. Oil market seems more bearish then bullish. Arab nations rejected Iranian call for oil embargo. Global recession risk glooming. EIA report shows US production all time high again. Saudi and Russia doing the heavy lifting of cutting.

WTI crude dropped below 80 the major support. Next support is in the 60s.

 

[socaldude]

Moment of truth for $SPX this week. Will it break out of its range?

Well, as the saying goes “the market is guilty until proven innocent.” LOL

I bought $10k worth of puts a while ago, they are now worth $1k. Kind of disappointed in myself as I know better. LOL

Didn’t work out well. Oil market seems more bearish then bullish.

These markets kind of have a mind of their own. They exist independently in their own digital ether and reality.

I have some understanding on how to trade oil like the seasonality, correlations and the futures contracts. But the divergences and u-turns don’t seem to make a lot of sense to me when they happen.

 

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[MJ DeMarco]

These markets kind of have a mind of their own

The market solely reacts to Federal Reserve forecasts and predictions. Today indicated they're done raising rates, so the market reacted. The market no longer reacts to anything else other than insights into future Fed policy.

X happens.
What does X mean for Fed policy?
Market reacts.

Company specific action now seem irrelevant, unless they give hints to future fed policy.

 

[socaldude]

The market solely reacts to Federal Reserve forecasts and predictions

Reminds me of the Taylor Rule.

Hard to keep up sometimes with what the Fed does and what they say.

 

[Hitch-hiker]

Check out on INTEL stocks, I just made 30%!

 

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[socaldude]

Check out on INTEL stocks, I just made 30%!

You talking about semiconductors?

There's definitely a lot of risk-on investing happening which looks like the market doesn't really see a recession.

To me, this market is way too risky and is not reflective of the risks. I own some stocks and I will definitely take money off the table as this is unhealthy. I don't like this.

There is something very very wrong here with the timing. If the Fed pauses rate hikes for a few months and then begins to lower them because they are pressured by the government that means the economy will not be doing so well. How will stocks react? How bad is it going to be?

 

[YanC]

There's definitely a lot of risk-on investing happening which looks like the market doesn't really see a recession.

Investing seems to actually be very concentrated on a few selected names. The S&P500 is up ~15% YTD sure, but the S&P 500 Equal Weight Index is barely up ~1%. The so called magnificent seven are up ~90%.

NVDA's earnings annoucement tonight might be interesting. Currently sitting at a P/E ratio of... ~120. Apparently the consensus is bullish !

 

[socaldude]

Apparently the consensus is bullish !

There is a bubble somewhere…

The Fed is trying to break something…

Is it crypto?
Is it A.I.?
Is it big cap tech?
Equities?

2024 is gonna be epic. Gonna be fun.

 

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[Kevin88660]

There is a bubble somewhere…

The Fed is trying to break something…

Is it crypto?
Is it A.I.?
Is it big cap tech?
Equities?

2024 is gonna be epic. Gonna be fun.

The explanation for the S&P good performance this year is that traders and investors are expecting rate cant go up further and a cut is coming soon.

But I don’t fully buy in the explanation because treasuries are running out of foreign buyers and the yield is still rather high by recent historical standard 4-5 percent. When risk free rate is so good it makes no sense to see market rallying at the same time.

And there is also a lot of skepticism towards the recent official accounts of cpi being below 4 percent.

 

[ZF Lee]

There is a bubble somewhere…

The Fed is trying to break something…

Is it crypto?
Is it A.I.?
Is it big cap tech?
Equities?

2024 is gonna be epic. Gonna be fun.

The folks in my stock trading circles say the Fed is trying to break China's financial system...but they have to keep the economy up in time for the US elections. So they don't have a lot of time...