Bigsky Investments®
  • Home
  • Equity Research
  • Blog
  • On Watch
  • Market Data
    • Portfolio
  • 🌲

Vindication

2/11/2016

2 Comments

 
Picture
I've been completely killing it in the market. The tide has finally turned and I have been vindicated. I've been astoundingly accurate in my macroeconomic predictions. The road has been rocky, the short-term whipsaws intense, but through it alI I have navigated my account to ATH!
Stocks are falling fast. The temptation is always to press short bets but the unfortunate reality of the day-to-day chop is that the counter-trend rallies (of which there have been many) are ferocious. I've already witnessed multiple 200+ Dow Pt. Vertical Rifts that would make even the most steadfast Bulls jaw drop. The rallies, of course, have been fleeting. It is a Bear Market after all but we must be careful and tactical in our trades or risk getting diced by the daily ppt algo chop-factory.
Picture
European Banks, Deutsche Bank in particular are blowing up. It's very amusing how much spotlight they are getting after they have essentially crashed. I have been privy to the trade for quite some time. You always have to wonder when the masses catch onto a trade if a counter-trend move is close..
Picture
The Dollar trade has been perplexing.. In many respects the Dollar is freight-training higher. Relative to almost all emerging market currencies, the US Dollar is going nearly parabolic. However: Despite ECB, NIRP & QE policies, the most important currency-cross the Euro is holding it's own.. Every time a big break-out was at hand, the Banksters would do something to manipulate the dollar lower. Clearly TPTB don't wan't to see the Dollar keep appreciating for it is truly wrecking havoc on many nations burdened with US Dollar-denominated debt..
Picture
Gold is catching a bid like crazy! I have caught the bulk of the move with varying degrees of leverage. It was very interesting how over the summer, for the first time in history hedge-funds were net-short gold. There was massive propaganda against gold recently despite the fundamental supply/demand paradigm being extremely Bullish for Gold Prices. Now that it is catching that safe-haven bid we get to watch those caught out-of-position scramble to cover. I told myself a long time ago that if gold were to ever get above 1200 I would buy it & sure enough, on Wednesday of this week it broke-out with ferocity! I did reduce my position & expect it to consolidate with perhaps a violent shake-out. Soon we will see if this rally has legs..

Oil is getting crushed with mounting domestic storage concerns. Iran flooding the market. Crumbling Nations choosing to deal with the supply imbalance by pumping even more... Crude is a mess but the volatility is insane right now! It's a tough trade with many geopolitical risks *Such as daily OPEC supply-cut rumors. My gut says it goes lower but trade at your own risk!
Picture
The only thing I had foreseen that hasn't materialized yet is the Breadbox Rally (rotation into soft-commodities as a safe-haven bid) I was always less certain of this thesis than the Bearish Equity & Oil thesis, but if the Dollar is going to come-in, or at-least stay muted, while Gold & Yen stays bid, perhaps this is going to be their time...
Picture
Picture
It is interesting to note that even though softs & grains haven't been rock-em sock-em to the upside by any-means, they have been outperforming equities.
Nobody is onto this trade yet & there is heavy short-interest in all of these beaten-down commodities. I am still keeping a close eye on developments in these markets and am ready to pounce if the opportunity arises. As of right now, I am mostly interested in Sugar, Soybeans, & Cocoa as potential long opportunities.
Picture
Best of Luck Traders. Keep Stacking that Cash. This Equity Bear-Market is just getting started!
2 Comments
Joe
2/12/2016 01:33:50 pm

Appreciate your posts, look forward to them and reading your insights.

Question: can you talk about your reasoning behind how you saw/see the softs as going higher in the wake of a strong(er) dollar? Thus far, the commodity collapse that began mid-2014 has coincided with the strength in USD index.

Thank you

Reply
Mtbigsky link
2/12/2016 05:27:09 pm

Thank you very much Joe,
I think that soft commodities could potentially go higher despite a strengthening dollar because:
-These markets have already been in a devastating Bear Market since 2008. Just like Bull markets, Bear markets do not last forever.
-Because the crux of the problems facing the financial markets is a credit/debt issue, Perhaps investors will look for safety in 'hard assets' as opposed to 'financial assets'
-No matter what happens people need to eat. Think about it, at the end of the day, if everything shut down & we were thrust back to agrarian days the most valuable asset a person can have is food & productive farmland.
I think it is possible that we see these hard-assets finally catch a bid (gold is getting a huge bid right now) I agree, the dollar is an issue to the thesis & the charts are still damaged. It's certainly not a home-run & should be watched/traded carefully but agricultural commodities are a potential area where we may see money flow into if financial assets continue to get smoked..

Reply



Leave a Reply.

    Picture

    R. J. Sullivan IV

    Equity Research
    Portfolio Management
    ​Trading

    Picture
    Picture

    Archives

    September 2019
    March 2019
    December 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    April 2018
    March 2018
    January 2018
    October 2017
    July 2017
    May 2017
    April 2017
    March 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    November 2013
    October 2013

    Categories

    All

    RSS Feed

© BIGSKY INVESTMENTS®​

DISCLAIMER: This is a personal web site, reflecting the opinions of its author(s). It is not a production of my employer, and it is unaffiliated with any FINRA broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities. DATA INFORMATION IS PROVIDED TO THE USERS "AS IS." NEITHER BIGSKY INVESTMENTS®, NOR ITS AFFILIATES, NOR ANY THIRD PARTY DATA PROVIDER MAKE ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND REGARDING THE DATA INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.