The Really Useless Thread

Third update from the FED:

--> Changing short term outlook in OIL from Buy to Neutral

sisse

bet equities are gonna hold as the last "doubting thomas" when it comes to hikes. we´ll see.

thank you for posting sisse

Equities about to give up...Key 4th update.

---> Changing mid term outlook in US Equities from Neutral to SELL

Setting the high of 2016 is around the corner with the M close ...Key one to track for the upcoming weeks...

sisse

nice updates sisse, thank you!

down, back up....US stock markets have been inoculated against volatility spikes.....the bastards can keep it bouncing along in a 5-10% range forever....

expectations and reality....the fed words are still ambiguous. Aint no raise till it's raised

What did equities, EU, and DAX do in January after raise in December?

I have been mentioning this for a few weeks now....still no bites.

completely different setups. december was priced in 100% and the june only got a 30% probability atm, got to do with probabilities shifting one way or the other, just my take on this could be wrong, not very strong in fundies.

Was it priced in? Do you have a "priced in" indicator? How does one judge priced in exactly?

Reality says complete opposite of what talking heads were saying about hikes 6 months ago, and what was said about 1.247x at the same time by only a handful

I need to see it on a chart

Please don't take that as an assault to you asgcorp, no offense is intended- I am a skeptic of "pricing in". Simply because it is not proven and can not be proven until after the fact.

btw- who puts the percentages on hikes? They are complete bullshit. How could anyone know the percentage probability of rate hikes? Yellen wouldnt even know that.

http://www.forexfactory.com/ruffryders

why is a guy with two usernames allowed in here?

anyways, I suspect the point I am trying to make is exactly why Sisse says to trade the expectation, not the fact

if one goes by that logic, then it could be said that one might trade the fact in the opposite direction of the expectation

well isn't priced in basically the expectations of the market movers? I would think that pricing in is speculating on the bias of a rumor. So if there are expectations for a rate hike in june depending on news releases as we get closer to the fed meeting money will be priced in towards the favorable outcome. What I take from this and what Sisse has been explaining that is how you profit. Not on the news/fact but the expectation/anticipation/ pricing in . Mind you that pricing in indicator comment was hilarious lol

I read your last posts and I understand where are you coming from but you maybe making a couple of wrong assumptions in your comments. Let me give you my 2 cents just to chip in the discussion.

First on this small part not that its the key part for the actual conversation:

1. who puts the percentages on hikes? ... well when market commentators refer to % for the next hike what they are talking is about surveys among the major analysts (from banks to major fund managers, etc etc). Its just a reference for the headlines of the main views of certain outcomes. Doesn't mean that they are positioning blindly to one side or the other (although they primarily will in some cases).

The problem with that info is that you are reading it too late as last consumer/trader. Actual information like that and macro analysis is first passed way in advance and internally first for decision making ...when the piece of info get to you is already the chewed down version weeks later for the main Media outlets ...and markets are prolly already are or thinking to play the next one ...

So don't dismiss it because is a good benchmark of main expectations. Major expectations don't change that often so its good to have it as reference in your arsenal ...

 

1. ...I need to see it on a chart... I think the main problem is that you have never seen FA from a different angle or in chart. If you expect to have a 1:1 news/chart relation you will struggle to crack it because markets are dynamic and trade primarily expectations. It doesn't mean that some times there are very key days and events that can be clearly spotted in a chart. However, flows in the market and investment don't work like that.
   
   Let me give you an idea. You can use the Euro or DX chart is irrelevant. Plot a W or M chart and try to trace the last FED hike in DEC. I would give you 2 hints on macro expectations shifts. One is Yellen confirming no hikes summer and DEC pretty much a done deal (Aug/Sep 2015) and the other on the FED FOMC nearly confirming the DEC hikes in OCT 2015. % for DEC rate hikes jumped from 35% to 85% in Sep and when the expectations start reaching to the masses late Nov were 95%...

​ Point being, you CANT and I repeat you CANT plot a 1:1 relation news/chart without understanding the shift in expectations in between especially with monetary policy. We can go deeper in details in the upcoming days and posts....

 

1. if one goes by that logic, then it could be said that one might trade the fact in the opposite direction of the expectation. ... Not necessarily... sometimes, actually many times especially in interest rates adjustment cycles (up or down) markets just take profits on the news without doing the opposite ... For example in a rate hikes cycle, after 5 or 6 hikes markets will start expecting the end and doing what you say ...Buy/Sell expectations and start to do the opposite in the fact.

​​Basically is not black and white. It will depend on what's in play and what market, when and why ...

We'll dig deeper later ...

sisse

Fed Funds futures and 2-year treasury yields are a great indication of what the market is pricing, and how it is broadly positioned, in relation to rate hikes - the former offers clearer information than the latter. Both of these have shown an overly dovish market and a wide divergence compared to the Fed dot plot chart.

Thank God I have two monitors to read/reply with....and thank you for the long winded comment sisse

 

1. The problem with that info is that you are reading it too late as last consumer/trader. Actual information like that and macro analysis is first passed way in advance and internally first for decision making ...when the piece of info get to you is already the chewed down version weeks later for the main Media outlets ...and markets are prolly already are or thinking to play the next one ...

Exactly my point - it is useless for trading. We are also talking about survey's among the major market analysts that are 1. continually wrong ($200 oil anyone?), and 2. trading often times in direct contradiction to what their low level analysts put out to the public. So when I hear someone say (again not picking on anyone in particular- many say these exact words...) that rate hikes are _____%, it's useless. It's simply bs regurgitated by individuals that have no clue what the percentages are, what the survey criteria is, who is in the surveys- etc.

 

1. ​ Point being, you CANT and I repeat you CANT plot a 1:1 relation news/chart without understanding the shift in expectations in between especially with monetary policy. We can go deeper in details in the upcoming days and posts....

I disagree but I don't think it's because you're right or wrong. I think we are arguing two different perspectives. You're talking about trading expectations, I'm talking about reality. The monthly sp500 chart you suggest is exactly what I'm looking at! Aug/Dec equities "crash" based off hikes, but immediately after a rally for new highs.

I clearly see the expectations you are talking about and how they are tradable on a macro time frame- It's obvious (albeit delayed) on monthly equities. Rumor of hikes = sale. But reality of hikes does not equal sell. I admittedly have an issue trading these expectations - thus why I'm here, and why I'm arguing my point

The point I'm trying to illustrate- is that hikes or no hikes, this train hasn't stopped. So when you say we are about to set the yearly high in equities- I respectfully disagree. Especially because hikes are not confirmed - it's more of this "if economic conditions improve" wrapped into a new package

Sorry- I have a bad habit of editing my posts after several read-throughs. Again- none of this is meant in a disrespectful tone. Hard to convey that over text

Slightly bullish close in the Euro but without surprises in the flow. Equities hanging by their fingernails but hold at the end and until they hold ...there is not much to see so same levels, same trades but NOT same outlooks ...we are in the process of turning the page for the year across the major asset classes...

You are making a huge mistake !!! . You cannot isolate rates as the only variable in the equation. You are forgetting that first hikes also signal what investors were wanting/waiting to know: the economy can walk alone after 8 year in with training wheels (QE and low rates). You WONT be able to analyse markets neither for trading or for understanding macroeconomics like that.

Among the major things in play during this time as reminder: Largest increase in employment in 14 years, strongest consumer and retail numbers in 8 years, QE from Europe and further negative rates across the world with Emergent markets collapsing (China included).... and more importantly the AUG crash was via China not via rates...not in the doldrums of the summer.

what do you think happen when the economy start growing? and where do you think the value reflects? ...yes in the price of Stocks and Earnings....

where do you think all the money went? ???? ...yes US equities with the economy 'booming' and to less extend European Equities with negative rates and extended QE ...

Btw ..this is v. good nugget from gammase1 ...

sisse

This is cuz the Fed has done such a poor job of whatever it is they do, and I blame them, Soros, and Black Obama for the horrible state of the World and the LGBTQ conspiracy and Socialism and high fructose corn syrup. It's a conspiracy! I have been putting together the Amazing FedBot 3000 in my spare time in my garage using Nintendo 64 and Hoover vacuum cleaner parts. Surprisingly lifelike, she will calculate the optimal Federal Funds Rate. Runs on 6 D-size batteries and will also vacuum (of course) and make a mean martini. It's our only hope.......

I read your last posts and I understand where are you coming from but you maybe making a couple of wrong assumptions in your comments. Let me give you my 2 cents just to chip in the discussion. (Quote sisse)

I now have a better understanding of the phrase,
Sell the rumor, buy the Fact.

Thanks