Trade Idea – Ruble – Tomorrow’s Putin presser is an opportunity

Before tomorrow’s annual Putin presser i wanted to put out this note. Ruble is only being ramped for Putin’s PR.  It’s already going to be a tough one and it lasts 4 hours..

Trade idea is long USD/Ruble (short Ruble) around the start of the press conference which is around noon Moscow time.

THECHART

 

Video:

 

 

 

 

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Video – Buying crude oil and update on Russell2000

Update on Russell2000 trade that ive been posting for the past few weeks has finally played out, dropping hard in today’s session. Also, started a long crude oil position here around built in the 57.90 – 58.40 range.

YT558472-071

 

Signalinea has gone high-tech.

 

Sorry for horrendous video but i think these will be better than blog posts once we get the details sorted.

 

 

 

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Almost ready to buy crude oil

Scalped it for a couple bucks last week based on the chart i posted. Now it’s almost ready again.

$58.40 or so. But would expect a much healthier bounce this time as there isnt anything below for quite a ways and just dont think it’s ready for a down-move of that size at this point.

YT558472-064

 

 

 

 

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Crude oil instigated collateral and credit crisis

The dirty little secret of today’s Central Bank induced S&P parabola is not only the impending credit crisis that starts in the high yield sector. Take a look at the below sampling of world equity markets (but denominated in USD).

In the past 5 months roughly ($780 Billion) has been wiped off the world’s non-US equity markets.

 

From the peak earlier in the year:

Canada -14%

Canada

 

Dubai -18.5%

Dubai

Mexico -16.67%

Mexico

Norway -29.75%!!!!!!

Norway

Russia -34.89%

Russia

Just a few but the list goes on..

 

All this was in some way collateralized.

The cracks are showing in HY credit but as of yet the US equity market has been immune..until the past week.

In the past week the only volume to speak of hasn’t been in the usual daily melt-ups on no volume and last-30-minute ramps to the day’s high, but on the down swings. The only high volume we are seeing is on the sell-offs..usually not a good sign for bulls.

Today’s movement of the 30YR through what was very solid resistance says alot as well..

The extreme divergence between Es and Credit will collapse soon so the whole process can begin again… Soon.

The Fed knows that this entire Centrally Planned QE experiment is a failure if it doesn’t result in an orgy of retail consumerism. And what’s the Holy Grail of maniacal, blind, raging, retail spending but the American Xmas shopping season?  The Central Banks proxies will buy as many ES contracts, sell as many VIX contracts and wheel out as many “whatever it takes” members as it takes to make sure the market ends the year on a high note ensuring that the malls are filled with shoppers until December 24th. Or so they hope..

 

I’m short small caps.

 

 

 

 

 

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Called 64 as crude oil bottom last week – And Who’s collateralized what?

Last week in this post i show that $64 should be some kind of bottom for crude oil. Was off by .30 cents.

Here’s today’s updated version showing a healthy bounce. Whether this is the ending acquiesce to the commodity route or not i dont know.. But the damage done to petro-countries will take some time to work itself out imo..

Saudi and Dubai markets both off 6% this weekend on top of the -20% already posted YTD…

The key here is to figure how much collateralization /pyramiding was sitting on commodities. And to whom..from whom..

Highest inflows into ETF funds since late 2007 this month tells you who s buying this market.. And usually once retail is in and you have declining PMI”s ..alot of money is made.. to the downside.

That’s why i was getting progressively so short last week in that series of posts..

 

112314-

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Why a credit crisis in the energy sector may be coming at the worst time

Treasuries are always right. They are saying something is coming. This monthly 30YR chart shows they are going much higher, at least for 2015.

30yr-monthly

 

But high-yield on the other hand..

The lack of liquidity in the high-yield credit market has become something of a joke recently as soaring equities have nurtured an environment in which nothing really matters under the hood. Why spoil the party?

 

A new debt crisis starts in energy sector and spreads to general market?

Energy companies are the 2nd largest issuer of HY debt.

Here’s some charts by Schwab illustrating this

With the ongoing massacre in crude oil my thought has been that the highly leveraged players would have debt issues which would just facilitate industry consolidation. But with the state of the credit market excluding sovereigns, we could have something else entirely. The energy sector makes up a large segment of the HY bond market and it’s about to take a big hit.. Sooner or later it’s coming. If the high-yield market in it’s fragile state is given a push we could see a real route in the markets. It’s starting to look like energy debt could go bidless for a time and take HY with it if action isn’t taken soon. And that action, in part should be for the orgy of debt issuance that is being used for buy-backs to stop asap.

But wait.. The stock buy-backs have been a major enabler of higher equity prices. 

Yep.

Why is no one talking about potential consequences from this ocean of unproductive debt issuance that’s not used for expansion/capex but merely multiple expansion?

 

Charts

Top of trend on ES going back to 2011 as i posted earlier this week.

YT558472-029

 

Russell2000 with a PE of 62 now in down trend on weekly, and daily. Here’s weekly.

RUT1W

 

Something has got to give here. Treasury yields vs S&P.

bves

 

CL Futures weekly.

Judging from the higher highs (within context of the slope) the next support of around $64 should be a floor for a time. Failing that $57. But probably not before we see Russia and the others have domestic problems which could become not-so-domestic problems when their leaders attempt to deflect public unrest and attention onto external enemies. Which would be more upward pressure on Treasuries, downward on equities.

crude-WWW

 

Just as sub-prime was to the financial crisis of 2008, HY credit could play the same role as the trigger for something greater..that “no one saw coming”. The subsequent reduction in debt issuance that would come as the market worsens would put a stop to the buy-back bubble and that would not be good for equities.

 

 

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The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Russell at resistance on weekly – Black Friday sales will be a let down

Yesterday i posted the Russell 2000 daily and the case for it finding resistance in this area.

At the close yesterday we have met resistance on the weekly.

The question is still.. what will be the catalyst for a down move?

How many times in the past two years was snow blamed for bad retail numbers or low growth?

The missing element of this entire Central Banking experiment has been consumption growth. My feeling has been that the strange interventions we see almost every Friday and pre-holiday boosting the market via VIX-slams and at-market Emini buying for the past two years have been to to bring this consumption growth into the fold by inducing weekend shopping. The market’s assumption is that this missing link is just around the corner. Bad Black Friday numbers could be quite a let down and with NYC and much of the East Coast expecting almost one foot of snow, it’s a strong possibility.

The market should be held together long enough to get everyone shopping the next few days, but i wouldnt want to be long next week as the numbers come in. Expectations are just too high.

Luxury retailer Tiffany missed earnings this morning. Another thing to ignore.

rutww

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan