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

[TheCountOfNowhere]

21 minutes ago, dgul said:

The question is, when to catch the knife?

Catch it, you should be throwing it 

[Democorruptcy]

Interview from earlier in the week. I like his term "An accelerating sudden stop"

 

[Solzhenitsyn]

1 hour ago, dgul said:

The question is, when to catch the knife?

You can’t. All I’ve done is lowered my final buy prices that will trigger my last PM miner purchases and hope i capture most of the drop.

i also hold physical in form of PHGP & PHSP, which have been protected from the sudden fall the miners have seen. Giving serious consideration into selling out those positions and putting them into Barrick and SBSW (SBGL) the latter being for the extra but risky leverage.

thats all in my ISA. Which I hoe to be able to “cash out” in the next 3 years.
 

My SIPP will just continue to mechanically buy oil, telecoms, transports etc mechanically throughout the whole thing. I won’t be selling for at least another ten years.

Edit to add: Uranium and it’s miners will also be a material part of my SIPP. Convinced nuclear will be needed to satisfy future energy demand. Mostly looking at GCL and YCA funds for that allocation.

[sancho panza]

1 hour ago, kibuc said:

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

Back at uni today K but as I said,I think this bull market is jsut beginning in gold and there'll be ups and downs.it was ever thus.There's an old saying plan your trades,trade your plan.Very apt.I've historically been punished for straying from my plan.

My thesis-and you may or may not agree dyor natch-is that gold will rise due to the loss of om,nipotence of the world CB's ie they aren't in control.That thesis holds whatever the corona virus does,it may even compound it.As @Majorpain said yesterday everything is getting sold(although it's worth ntoing that the two goldies I've been buying lately ie BVN/Newcrest are holding up(I've been buying them with our newmont money to increase our upside lol)).This is one of those moments when you have to reassess your plan.I have and I think our thesis on gold still holds.Time will tell.

 

Much as I'm nervous today,I'm moivng money into brokerage accounts as is my Mum,wife and another family member.All mainly to buy big oil/REMX/XES and a few other ETF's.

If I can get good prices on BVN/Newcrest,then we'll nudge up there today.Have to say tho my thesis on the goldies has changed and I'm leaving the small IKN type plays for now and buying tier 2 companies $1bn+ eg OR,AU as well possibly today.

 

big call for us but that was our plan to buy big oil over 6 months to a year from august 2019,like PM miners from 2017.Nothing has changed to that theory except the prices have got a lot cheaper as there's a ?pandemic around.

Hoep it passess soon.

 

[MvR]

10 hours ago, sancho panza said:

 

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?

I wasn't planning to, but you've got me looking now

This is absolutely not trading advice, but generally speaking if I'm bullish and I think we're going through a capitulation, I'd go for a call spread ( long call, with a short call a few strikes higher ), with the long call at at the 1 standard deviation level.. i.e. the one with a delta around 0.16. The short call would be the one around 0.05 delta, and I'd buy the spread as far out as I though it needed to for price to get above the upper short call. 

In the case of XOP for example,  the Jan 2021  22/27 call spread is about 0.30 or $30.00 a contract, and the max profit is $470 if we end above 27.   If I consider a fast rebound likely, i might leg into the spread by buying the 22 strike calls at the current $41 a contract, and then entering a GTC order to sell the 27 strike calls for the same $41 a contract, hopefully to filled during the bounce. 

This may not be optimal probabilistically, but psychologically it means I know I've taken out my initial stake, and I'll go looking for other opportunities.

As for taking profits, I'd probably sell the position once it had achieved 50% of it's max profit. It pays not to be greedy when you're in a net long options position, since the profits can evaporate quickly.

[DoINeedOne]

Have funds ready to invest in some bargains hopefully 

The one thing that got me wondering is in April around 5 weeks time i get to take a new lump sum from my company which i will be investing but whilst there's nothing much i can do but wait i do wonder where we will be in 5 weeks 

[DurhamBorn]

Oil hit my middle target today just over $45 so i v just bought another tranche of the oilies.Really quite hoping that $43 does hit so i can allocate almost fully to the sector.

Im also buying right across the telco sector.This virus will provide a good chance for CEOs to blame it for all ills,and we can expect a year of profit warnings i expect across most sectors,they would of been coming anyway,this might increase them.

Very happy prices are at last falling to ladders and can be bought.

[Castlevania]

29 minutes ago, DurhamBorn said:

Oil hit my middle target today just over $45 so i v just bought another tranche of the oilies.Really quite hoping that $43 does hit so i can allocate almost fully to the sector.

Im also buying right across the telco sector.This virus will provide a good chance for CEOs to blame it for all ills,and we can expect a year of profit warnings i expect across most sectors,they would of been coming anyway,this might increase them.

Very happy prices are at last falling to ladders and can be bought.

It’s the new Brexit! Every single profit warning will use it as an excuse.

[DurhamBorn]

21 minutes ago, Castlevania said:

It’s the new Brexit! Every single profit warning will use it as an excuse.

They sure will.The affect of this virus longer term will be zero in macro terms.It will change a lot of things around though.Just another cog in reflation as supply chains get less complex and return back closer to source.

When a road map gets very stretched risk increases.If BAT for instance is giving 9% divis on a 6 PE there isnt too much risk.If it falls 20% the divis will take care of that.If a company with no profits,or very small,that needs to keep borrowing to reach its goals goes into this its a different story.

There is always a reason people look for something happening.On oil now it "must" be this virus,but it isnt.Its the macro postion.Oil demand and GDP growth fell below supply around 2/3 months ago and the lead and lag said highly likely $43 oil would arrive through that.The production cuts to come and the fact the dollar should fall 10% from here then see a turn up to $70.If that road map works,no doubt people will say,oh oil recovered due to the virus going away etc.

 

[TheCountOfNowhere]

Carney timed his exit perfectly 

[Lavalas]

Stating the obvious... but my god it’s brutal out there. Wait until 14:30 😩

Holding firm though, and don’t have the funds to ladder so waiting for things to settle a bit until deploying anything.

Have fun everybody 

[Loki]

3 minutes ago, Lavalas said:

Stating the obvious... but my god it’s brutal out there. Wait until 14:30 😩

Holding firm though, and don’t have the funds to ladder so waiting for things to settle a bit until deploying anything.

Have fun everybody 

Same here mate. Gutted to be missing a buy chance

[Talking Monkey]

12 hours ago, sancho panza said:

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.

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.

I don't think it is the Big Kahuna too SP the reason being that the Fed can cut rates and do a load of QE to provide the sugar rush for a big spike up, they still have that left up their sleeve

[Harley]

A lovely quote: "The time to buy is when you really don't want to"!

Right now, I'm quite keen to buy, moth drawn to the flame and all that!

Remember folks, if you've been continuing to read this thread for a while now this was baked in and you knew it. 

A bit different when it actually happens though!

Go short armchairs!

 

[Harley]

16 hours ago, Barnsey said:

FTSE 100 pretty much flat for 20 years, astonishing!

Try that in a currency other than GBP!  Like gold.

[Harley]

13 hours ago, dgul said:

No, it would go directly into supporting asset prices.

Or......

Probably the start of MMT (QE for the people) as people will need the cash soon.

Just caught up on Napier on the MoneyWeek podcast.  About MMT, etc.  Also helped me understand why TPTB are doing so little to stop this Climate Emergency stuff.  Very informative.

[Harley]

Unilever, my canary, now following the FTSE down almost in lockstep.  You don't sell ULVR unless it's pretty big.  The core is weakening.

[Harley]

13 hours ago, sancho panza said:

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.

Not totally clear there.  Are you holding your PM miners, selling them, or buying more?  A larger future position could be due to higher future prices or purchases.  I'm looking to buy some GDX/SIL type stocks as part of a hold sector allocation.  My TA has never worked on GDX!

[Harley]

4 hours 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.

Hopefully this is where the relative historic lackluster showing of the FTSE takes the edge off things.  Although a globally exposed index so maybe not.  Anyways, glad I stayed away from the US markets for my buy and hold for the last year or so.

[Lavalas]

2 hours ago, DurhamBorn said:

Oil hit my middle target today just over $45 so i v just bought another tranche of the oilies.Really quite hoping that $43 does hit so i can allocate almost fully to the sector.

Im also buying right across the telco sector.This virus will provide a good chance for CEOs to blame it for all ills,and we can expect a year of profit warnings i expect across most sectors,they would of been coming anyway,this might increase them.

Very happy prices are at last falling to ladders and can be bought.

Any current thinking on Southwestern Energy @DurhamBorn / @Cattle Prod? Annual results out yesterday. Met guidance and committing to free cash flow by the end of the year.

I’m investing in big oil for safety but keen on some riskier plays in natural gas, and for those reading, I’m a novice and this does appear to be a riskier play. I’m guessing coma score says as much @sancho panza?

Cheers

[Barnsey]

U.S. futures not looking all that bad at the moment pre market open, interesting. Markets now pricing in FOUR rate cuts, expecting imminent Fed QE response?

[Harley]

Been a long time since I've looked at hourly charts!

They'll rot my brain!

[TheCountOfNowhere]

The calls for bailouts have started. 

The rich refuse to lose, but ultimately they will. 

[Majorpain]

5 minutes ago, TheCountOfNowhere said:

The calls for bailouts have started. 

The rich refuse to lose, but ultimately they will. 

Wow, that was fast.

The tantrum when the Fed doesnt give the market a dose of monetary heroin (because they don't want to go down the Weimar Germany route) will be epic.

[Harley]

SUK2 and XUKS are my chosen FTSE short ETFs to periodically hedge.  I've also tried trading without success (the maths make such shorts short-term holds only).  Anyways been busy prepping and other stuff so eye off the ball.  SUK2 up 25% since 19 Feb.  Missed a slightly weakish buy signal on the daily on 13 Feb.  B*gger.