The Lunatic Fringe - Market and Trade Chat

Zed

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GDX broke out of the 'bottoming' consolidation area I had drawn, a more conservative view would have the box top @ 27.30

GDX_2022-11-09_09-21-11.png

You might wanna step back and be a little conservative here... maybe the bigger box is a more realistic picture.

GDX_2022-11-09_09-24-13.png

Still, close, things are looking up for now.
 

Voodoo

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Down 93% in a year!

View attachment 2516

As Meet Kevin has noted for awhile. But, boy oh boy did he get mad when I stated that the new company he is founding has basically the same business model. I mean, come on man, you are buying houses. Not too much to invent there. His argument was that Open flips homes but he wants to keep them and rent them out. I said Open door and these other places will try to do just that and be forced to rent some out.

They are very over-capitalized and sitting on too much over-priced inventory. They will be going BK.
 

Zed

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Luke discusses how Russia has proven to be far more resilient than the West expected. They are massively miscalculating Russia's true GDP, which can be calculated based on the value of a barrel of oil. We're now seeing the consequences as Europe and the U.K. both have an energy crisis. The U.S. has tried to mitigate the impact by dipping into the Strategic Reserve. He says, "If you want to understand the true value of oil, fill up your car, go for a long drive until you run out, and then push it back to where you started."

We've had the worst year in treasury markets since 1798. Russia was successful in defending their currency since they required 'less friendly' buyers to pay with Rubles. The West wants to cap Russia's energy prices, but that seems quite unrealistic. The U.S. is seeing shortages of distillates and high diesel prices, while inflation remains persistent.

There is a feedback mechanism between energy, inflation, and sovereign debt markets. Energy is required for everything, and cheap energy is necessary to maintain the system at current sovereign debt levels. We are starting to see debt sustainability issues. Energy eventually connects back in a feedback loop, as everything is inter-related. At some point, things break, as we've seen with the U.K. pensions.

Rising dollars create a bad situation for everyone. It weakens domestic corporations and ultimately turns everything into a balance sheet contest. There is an argument that running the dollar up will hurt the U.S. last, but what if the U.S. is wrong this time, and it doesn't hurt Russia, China, and India that much.

Countries seem to be accumulating gold instead of dollars, and a recent buyer of 300 billion worth did not their identity. This is starting to look like a transition away from the dollar and into gold.

OPEC may have been making a strategic move with Saudi Arabia. They realize that if the West can choke out Russia, then they're likely next. Also concerning is that the U.S. has demonstrated its willingness to steal FX reserves of other nations.

Gold is likely to be a politically managed metal until the day it is not.

The Treasury recently stated on Monday that the U.S. Federal deficit is expected to double next year. This throws pressure back on the Fed and certainly means that rates and the dollar will continue rising. It looks like the Fed and Treasury are fighting.

Once the U.S. fiscal situation gets acute enough, you're going to see gold take off. When the Fed finally pivots, it should be good for both energy and metals markets. Currently, energy is looking excellent compared with treasuries. A Fed pivot is likely to happen sooner rather than later, but they have not budged so far. Larry Summers has stated that we are nearing a "doom loop".

 

Zed

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6969 contracts worth of silver in eligible. 52716 total. Expected delivery ~ 10K

December OI in silver has been contracting since the low on the 1st Sep down from 125K to 91K. OI contraction starting to accelerate the last few days as people staying in paper start rolling forward to March.
 
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Cigarlover

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Fook! Is this one right? That's a crash!


The people I know in RE are saying the market is dead. Sellers still have high expectations from the sunup over the last couple years and buyers are nowhere to be found with interest rates as high as they are. Eventually there will be a re balancing (Lower prices in RE to accommodate the higher interest rates)
 

BackwardsEngineer

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The people I know in RE are saying the market is dead. Sellers still have high expectations from the sunup over the last couple years and buyers are nowhere to be found with interest rates as high as they are. Eventually there will be a re balancing (Lower prices in RE to accommodate the higher interest rates)
Can honestly say we are now in a buyers market... problem is there are no buyers.... everyone is a RE expert, sellers believe themselves still in total control. What little buyers left are finding is high payments and little value... my inbox filling with price reductions. Problem is they are dropping 20k when if I was representing them it would be 120k or 220k.. My rule of thumb if its priced:
500k or under worth x.7
500 to 1m worth x.6
1 to 2m worth .55
above 2m who cares...

hope you got your place sold cigar, its going to be a rough ride..
 

Cigarlover

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Can honestly say we are now in a buyers market... problem is there are no buyers.... everyone is a RE expert, sellers believe themselves still in total control. What little buyers left are finding is high payments and little value... my inbox filling with price reductions. Problem is they are dropping 20k when if I was representing them it would be 120k or 220k.. My rule of thumb if its priced:
500k or under worth x.7
500 to 1m worth x.6
1 to 2m worth .55
above 2m who cares...

hope you got your place sold cigar, its going to be a rough ride..
Those are pretty good rules. I am already looking at 100k price cut and not worried about it but everywhere I look, others haven't taken that same view. By next spring hopefully they will.
 

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Most of the silver majors report earnings today. Could be a tough day for the silver sphere, as most have been missing expectations
 
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pmbug

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The Federal Reserve shouldn’t stop raising interest rates for fear of a recession, said Richmond Fed President Thomas Barkin on Wednesday.

“If there is one thing we learned in the 1970s, it is that the Fed can’t let inflation fester and expectations rise. If we back off for fear of a downturn, inflation comes back even stronger and requires even more restraint,” Barkin said, in a speech to the Top of Virginia Chamber of Commerce at Shenandoah University in Winchester, Va.
...


There isn't going to be a pivot until inflation gets tamed whether it takes a recession or depression.
 

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Next big bop should be good for a short term bottom. Bitcoin via GBTC. YOLO.
 

Zed

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There isn't going to be a pivot until inflation gets tamed whether it takes a recession or depression.

Whatever is coming they are destine to jawbone higher right up until the day they do pivot. I bet they are trying to work out how to pivot without looking like they have pivoted. They view this whole thing as a confidence game which I'd say is only partially correct.
 

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I honestly think Mr. Barkin was being very candid. The Fed has limited ability to raise rates before tipping scales to real catastrophe. They cannot afford to pivot too soon (before inflation is stamped out) or they risk it reigniting without a chance of getting it under control.

Shooting the fiat moon is getting more difficult.
 

Zed

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Next big bop should be good for a short term bottom. Bitcoin via GBTC. YOLO.


Consolidation box broken to the downside... if it isn't capitulation BTC is dead.

BTCUSD_2022-11-10_10-16-44.png

The trampoline looks like 9-12K, about where the Covid sugar rush started.

BTCUSD_2022-11-10_10-18-39.png

I'm guessing this will look like the late 2018 breakdown. Might be getting off the canvas mid 23.
 

Zed

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They cannot afford to pivot too soon (before inflation is stamped out) or they risk it reigniting without a chance of getting it under control.

True but even more than that they cannot afford to have us think they are going to pivot right up until they have to pivot. Either way they will say the same thing.

$64Q is do we get some other creative response that isn't a classic pivot.
 

Zed

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UST 10YR Yield looks like a continuation pattern. +4.25% on a daily close confirms. +4.35% if conservative. Will probably be a strong move if we break up. Might be inline with a stock capitulation as the market readjusts it's current rate outlook. In lay terms... the oh fuck they are really going further moment! Market epiphany coming up? Bloody Friday?

US10Y_2022-11-10_10-43-37.png
 

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True but even more than that they cannot afford to have us think they are going to pivot right up until they have to pivot. Either way they will say the same thing.

$64Q is do we get some other creative response that isn't a classic pivot.
Is War considered a creative response? Desperate times call for desperate measures.
 
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