Credit deflation and the reflation cycle to come (part 2)

[Barnsey]

8 minutes ago, dgul said:

No, it would go directly into supporting asset prices.

Exactly, boosting stocks and thus attempting to support consumer confidence and delay the inevitable U.S. pension crisis.

[Talking Monkey]

8 hours ago, DurhamBorn said:

Ok oil is now crossing into my $43 bottom target range.This is not advice,but if i was setting ladders against my road map on the oil companies id be buying 1/3 now,1/3 oil at $45.50 and last third at $43.50.Id also be very tempted to split the bottom ladder among the other two and accept some downside due to the rubber band being very stretched.

Remember when almost everyone in the MSM etc was saying oil was a strong buy at $60? Middle east tension etc.?.Downside then was very clear in the macro picture.

There is a small risk the paper market undershoots ,but it will come back quickly.For reference,not trading advice my road map went from and goes $60-$43-$71-$18-$290.

 

 

 

Would the bit in bold imply a broader melt up before an epic bust DB, or is your view it would be limited to oil, and oil stocks

[DurhamBorn]

Just now, Talking Monkey said:

Would the bit in bold imply a broader melt up before an epic bust DB, or is your view it would be limited to oil, and oil stocks

Could be broad,but likely the lead will be oil.

This is the most brutal bear market i can remember as we expected.The amount of quality companies down 70%+ is incredible.Its only a few mega caps and pie in the sky stocks making the index look ok.Iv gone over my oil road map again and its still showing a turn at $43,but we are now in the shaded area where a turn can happen easily so pretty much target hit.Im short of a few figures because everything is moving so quickly,but its showing the $70 area as likely,maybe by autumn even.

I ignore the noise as much as i can (everyone feels it a bit) and stick to what the numbers say.

What is certain is how unstable everything is.The fact some solid blue chips can be down 70% as many are shows the CBs simply havent got control of things.

[Talking Monkey]

10 minutes ago, DurhamBorn said:

Could be broad,but likely the lead will be oil.

This is the most brutal bear market i can remember as we expected.The amount of quality companies down 70%+ is incredible.Its only a few mega caps and pie in the sky stocks making the index look ok.Iv gone over my oil road map again and its still showing a turn at $43,but we are now in the shaded area where a turn can happen easily so pretty much target hit.Im short of a few figures because everything is moving so quickly,but its showing the $70 area as likely,maybe by autumn even.

I ignore the noise as much as i can (everyone feels it a bit) and stick to what the numbers say.

What is certain is how unstable everything is.The fact some solid blue chips can be down 70% as many are shows the CBs simply havent got control of things.

Thank you DB for explaining

[sancho panza]

On 26/02/2020 at 18:13, Tdog said:

Is that list what you own?

We own a few,have a sold a few,don't own a few.It's my watch list for big oil

8 hours ago, DurhamBorn said:

Ok oil is now crossing into my $43 bottom target range.This is not advice,but if i was setting ladders against my road map on the oil companies id be buying 1/3 now,1/3 oil at $45.50 and last third at $43.50.Id also be very tempted to split the bottom ladder among the other two and accept some downside due to the rubber band being very stretched.

Remember when almost everyone in the MSM etc was saying oil was a strong buy at $60? Middle east tension etc.?.Downside then was very clear in the macro picture.

There is a small risk the paper market undershoots ,but it will come back quickly.For reference,not trading advice my road map went from and goes $60-$43-$71-$18-$290.

Interesting to see big oilies moving down a lot faster than the underlying.We've been averaging into the for 6 months at certain prices.Happily sold Newmont a couple of days back and bought RDSB,XOM,OXY,REP,BP.We'll average in some more tmrw which is usnual as normally we only do one purachse a week max.But these are interesting times.

It's hard here not to rush in as things may get cheaper yet.Surprised the goldies got sold off so heavily but they also rose the otehr day when the market got pummellled.

 

6 hours ago, kibuc said:

The thing is, I can see a wall of red while gold is up strong and silver up marginally. I was thinking perhaps a "sell now, sell everything attitude" but that would include the underlying metals too?

Impact and Alexco started brightly only to find themselves at the wrong end of a 10% swing in a matter of half an hour, and they are not the only ones.

Bull market tremble K.

We bought some BVN yesterday and it's actually up.Otherwise been a bad couple of days but we have plenty equity left across the goldies and my sell triggers not been triggered.Interesting to see gold miners whipsaw past the S&P.

6 hours ago, Majorpain said:

No, miners mine PM's but they still get swept up with stocks because that is what they are.  This is a phase where people are just bashing the sell button no matter the stock IMO, so im not worried yet.

Remember that the average person has been looking at the "you cant lose" main markets for the last 10 years, they will not be looking at the "loser" PM miners for a little while longer despite some doubling in value.

Interesting to see DXY weaken today.......I'm still off the opinion that we're in a gold bull,have had new all time highs in £,CAD,Yen,AUD etc recently.Just waiting of rthe USD to join the oparty.But this corona virus is a real curve ball.Having said that we'll use the opportunity to add to a couple of postions.Hopefully will get to rebuy FCX way below we sold em two days back.

Copper could have a real run up when this ends.WHich it will.

5 hours ago, Cattle Prod said:

Tagged $45.88! A painful day for the bottom line I have to admit, but nothing dividends won't take care of soon enough. I bought Shell, BP, Premier Oil, Babcock and BT today on the ftse side, pretty much fully allocated in Shell and BP now. Sold my S&P, Apple and Microsoft put options and bought eurodollar and XOP calls with the proceeds.

Overall rationale is that I think we are at the point of this virus outbreak where Fed will cut (possibly a worldwide coordinated cut), and OPEC+ will also cut production.

Interesting to note that a sudden drop in demand hasn't shown up in building inventories yet, I'm not sure of all the lags mind you. But there was a draw in US inventories yesterday, and our friend Art Berman has WTI c. $12 undervalued on current comparative inventory.

Some say the Libya outage (no one talking about this!) and ...whisper it....underperforming US production may cancel out the demand loss, which is likely to be temporary.

Let's see, and dyodd of course. As DB says none of this is trading advice! Just my 2c

Must say tempted to examine some options out of the money on FCG,XOP,XES,REMX.

be interesting to hear whether  @MvRis taking any small high risk plays here?

[sancho panza]

16 minutes ago, DurhamBorn said:

Could be broad,but likely the lead will be oil.

This is the most brutal bear market i can remember as we expected.The amount of quality companies down 70%+ is incredible.Its only a few mega caps and pie in the sky stocks making the index look ok.Iv gone over my oil road map again and its still showing a turn at $43,but we are now in the shaded area where a turn can happen easily so pretty much target hit.Im short of a few figures because everything is moving so quickly,but its showing the $70 area as likely,maybe by autumn even.

I ignore the noise as much as i can (everyone feels it a bit) and stick to what the numbers say.

What is certain is how unstable everything is.The fact some solid blue chips can be down 70% as many are shows the CBs simply havent got control of things.

Ive been at uni all day.Just installed hte investing.com app on my phone so caught up on way home.

Switched on the news after dinner and the noise is incredible.Lots of talking heads on tv news spreading fear whilst telling everyone not to panic.we have a mecahnical buying strategy based on time/price and we'll stick to it.Time will tell if thats a wise decision .

My big issue is that I was wanting to sell our gold stocks to buy high yielders.the assumption undelying was that if goldies doubled we could laod up.but some of the high yielders are rock bottom so my maths has changed.

[Green Devil]

2 minutes ago, sancho panza said:

Ive been at uni all day.Just installed hte investing.com app on my phone so caught up on way home.

Switched on the news after dinner and the noise is incredible.Lots of talking heads on tv news spreading fear whilst telling everyone not to panic.we have a mecahnical buying strategy based on time/price and we'll stick to it.Time will tell if thats a wise decision .

My big issue is that I was wanting to sell our gold stocks to buy high yielders.the assumption undelying was that if goldies doubled we could laod up.but some of the high yielders are rock bottom so my maths has changed.

Mechanical systems work well until someone throws a curve ball at you. 

[sancho panza]

1 hour ago, Cattle Prod said:

That's pretty much why I switched from short us equities to long eurodollars today. More than that they have to, they now have the fig leaf/excuse (virus). Theyve been quiet, waiting for the new virus clusters to take root in the west.

What I did NOT see coming was GDXJ getting smashed over 6% today, wtf was that about? I need to go back and look at past performance on this one, and think wether the risk of holding on till my 1750 gold target is really worth it. After all gold came very very close to @DurhamBorn s 1700 gold target. That one hurt today I must say, I'd like to hear more about the effect of Comex playing around with margins, if anyone has further insight.

I think there could be an issue with some rcent buyers being more momo type traders rather than committed bulls.Much as I'm swaying between cashing in and trying buy back cheaper or adding more.The one thing I can say with some surety is that our PM miner positions will likely be larger than they are now in a few months.As I said to someone else.Nice dip on the $.I've been waiting ofr a weak dollar phse to sell our goldies for this pahse pre big kahuna.

I dont think thsi is the big kahuna dyor natch.

7 minutes ago, Green Devil said:

Mechanical systems work well until someone throws a curve ball at you. 

I get that.The art is in picking which sector to get mechanical about.

Two months will likely tell if I was right to hold onto our goldies and build the oilies up some more.

[Democorruptcy]

Ten year DOW

[sancho panza]

9 minutes ago, Democorruptcy said:

Ten year DOW

Agreed.That's not a sell off.Here's my wow chart for the day.Another $11 and we re back to 2000 price

[Castlevania]

10 minutes ago, sancho panza said:

Agreed.That's not a sell off.Here's my wow chart for the day.Another $11 and we re back to 2000 price

According to ZeroHedge Exxon Mobil’s dividend yield is now the highest it’s been since February 1986.

[Green Devil]

47 minutes ago, Castlevania said:

According to ZeroHedge Exxon Mobil’s dividend yield is now the highest it’s been since February 1986.

Yes right now, but what's the next dividend going to be? Global contraction is being priced in. 

[Lightscribe]

As much as I believed in the direction of travel of the cycle and the consensus on here, I think it’s time now to focus on loved ones and those that matter in your life and what may lie ahead.

I’ve moved the 20% FTSE portion of my pension into the cash pot last week. Another 20% is in gold and treasuries which I’ll leave. The rest was in a cash fund in the pension to be readily available at the cycle end in a correction for reinvestment. My partners pension is much smaller but pretty much in 40% PM miners and 50% reflation stocks. Everything is getting hammered. Looks like we are now having that black swan event and them some.

If this continues, the money stimulus would have to be insane at a unprecedented rate. I live in London, but will be leaving temporarily at the weekend in light of events with my family to see how this pans out. I shall be taking my physical silver and BTC hardware wallet. 

It’s slightly amusing in a melancholic way, that I have my mother’s words in my head. The bible was drummed into me as a child, and she has always quoted this verse of Ezekiel 7:19 in regards to the end of times, whenever I’ve tried to organise their money.

‘They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.’

Lets just hope it doesn’t get to that.

I wish you all safe and well. 

[BearyBear]

I think it's over guys, they can't print the amount of money required to stop this gigantic bubble from deflating.

I've sold almost everything and will sit on cash. Time will tell if I was right or wrong.

[No One]

1 hour ago, Sideysid said:

As much as I believed in the direction of travel of the cycle and the consensus on here, I think it’s time now to focus on loved ones and those that matter in your life and what may lie ahead.

I’ve moved the 20% FTSE portion of my pension into the cash pot last week. Another 20% is in gold and treasuries which I’ll leave. The rest was in a cash fund in the pension to be readily available at the cycle end in a correction for reinvestment. My partners pension is much smaller but pretty much in 40% PM miners and 50% reflation stocks. Everything is getting hammered. Looks like we are now having that black swan event and them some.

If this continues, the money stimulus would have to be insane at a unprecedented rate. I live in London, but will be leaving temporarily at the weekend in light of events with my family to see how this pans out. I shall be taking my physical silver and BTC hardware wallet. 

It’s slightly amusing in a melancholic way, that I have my mother’s words in my head. The bible was drummed into me as a child, and she has always quoted this verse of Ezekiel 7:19 in regards to the end of times, whenever I’ve tried to organise their money.

‘They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.’

Lets just hope it doesn’t get to that.

I wish you all safe and well. 

Please advice on what are reinflation stocks and how I can get them .

[CVG]

12 minutes ago, No One said:

.....and how I can get them .

Cheaply!

[Calcutta]

How far are we expecting the FTSE to crash then? In a 1y chart it looks bad but it's still nowhere near where it was in 2016. I'm a sadist, I want to see it down a few thousand points yet.

[kibuc]

8 hours ago, sancho panza said:

Ive been at uni all day.Just installed hte investing.com app on my phone so caught up on way home.

Switched on the news after dinner and the noise is incredible.Lots of talking heads on tv news spreading fear whilst telling everyone not to panic.we have a mecahnical buying strategy based on time/price and we'll stick to it.Time will tell if thats a wise decision .

My big issue is that I was wanting to sell our gold stocks to buy high yielders.the assumption undelying was that if goldies doubled we could laod up.but some of the high yielders are rock bottom so my maths has changed.

I share your pain. I was 5% away from starting to build positions in oilies and telecoms, but a few days later I'm picking myself up from the ground instead - even though another kick in the balls is surely coming today, given the price action in PMs overnight.

My intended purchases are cheap but I simply cannot get myself to selling miners, some of which are just mind-boggling bargains at the moment. Decisions, decisions.

Gotta keep hoping this is not the big one, not yet. A stimulus won't fix supply chains but it should fix sentiment, at least for the short term, and we might event see David Hunter's melt-up before the ultimate collapse. Otherwise I might just as well take a trip to Wuhan and start licking railings on the tube

[Loki]

6 hours ago, Green Devil said:

Yes right now, but what's the next dividend going to be? Global contraction is being priced in. 

Wouldn't that negate this thread? Genuine question. A few like durhamborns friend will be pricing it in I expect but won't most of the financial types be caught unawares?

29 minutes ago, Calcutta said:

How far are we expecting the FTSE to crash then? In a 1y chart it looks bad but it's still nowhere near where it was in 2016. I'm a sadist, I want to see it down a few thousand points yet.

I don't think anyone will want to hold over the weekend. But that's just a relatively uninformed opinion

[kibuc]

Defying the markets!

 

[Loki]

Just now, kibuc said:

Defying the markets!

 

What's going on there

[BadAlchemy]

I spotted that yesterday. Google results for BP closing price showing 4p a share. Buy! Buy ! Buy!

Anyway in the real world... BP just slipped under 400p and RDSB into 16nn area. I set two 'ladders' last week for RDSB both of which have gone green and I'm still not buying! We live in interesting times!

[kibuc]

7 minutes ago, Loki said:

What's going on there

Just a reporting glitch from Investing.com. BP is firmly down today, as you'd expect.

[Solzhenitsyn]

9 hours ago, dgul said:

No, it would go directly into supporting asset prices.

That’s why I’m convinced this will be the final leg up now before the big smack down.

At least in the past when they’ve printed, it has had at least some positive effect on the economy. This time it won’t help at all, the effects will be 100% purely to boost the markets.

Thats not sustainable. Once the markets twig that the economy continues to slide, down it all goes.

Thats my take on it anyway.

[dgul]

1 minute ago, Solzhenitsyn said:

That’s why I’m convinced this will be the final leg up now before the big smack down.

At least in the past when they’ve printed, it has had at least some positive effect on the economy. This time it won’t help at all, the effects will be 100% purely to boost the markets.

Thats not sustainable. Once the markets twig that the economy continues to slide, down it all goes.

Thats my take on it anyway.

The question is, when to catch the knife?