Guest post by Peter Tchir.
First, today’s move seemed bullish to me. Yes we failed to hold the highs of the days. That isn’t good. But we didn’t break to new lows as we closed and that’s not bad given all the concerns about Europe. Even more importantly we didn’t completely give up when Obama made his sheech. I can’t be bothered to correct that typo because Obama was so disappointing.
I’m not sure that I would consider the election a strong endorsement of his policies. If anything I viewed the election as reasonably split and indicative of a divisive country. He definitely won, so he shouldn’t capitulate but seriously, isn’t it time for some for cooperation? Not that the republicans were any better. I can’t tell whether they are behaving as sore losers, or arrogant winners that somehow haven’t accepted they lost.
We need to do a few things. Work together to create a reasonable plan forward. It won’t make everyone happy but we need to do what is best for the economy, and to some extent, the market. I don’t agree with everything that Ben does, but while he is out there trying to promote growth through liquidity the politicians have been messing it up. I didn’t expect hugs and kisses on day 1 but the politicians need to understand the people aren’t happy, and the only real mandate, from those in the center, is to figure out some useful compromise.
Jim Bianco of Bianco Research LLC chats with TrimTabs’ Charles Biderman about the financial impact of the Presidential Election and our economic future.
Of all the issues discussed in this space, undoubtedly the one that captures the imagination of most readers is the subject of VIX-based exchange-traded products. I get more questions about the construction of these products, how they respond to the VIX futures term structure, what factors influence performance, etc.
For these reasons I thought it might be instructive to update my VIX ETP landscape chart and include performance data from the September 14th market closing high of SPX 1465 to today’s close of SPX 1377. During that period, the SPX declined 6.0% on a close-to-close basis, while the VIX jumped 27.4% during the same period.
So how did the VIX ETPs fare while the market was selling off?
In examining the graphic below, the first thing you probably notice is that only 5 of the 19 VIX ETPs were able to manage gains during the selloff. In fact the average (mean) VIX ETP performance was a disappointing -4.9%, while the median return was -6.7%. Even more interesting, the inverse volatility products actually outperformed their long volatility counterparts and had the top performer of all, the VelocityShares Daily Inverse VIX Medium-Term ETN (ZIV).
The trader has referred to Patrick Chovanec multiple times when it comes to China and the dynamics “over there”.
Below is an interview with Chovanec sharing his thoughts on the Chinese Leaders and the corruption that risks destroying the country.
Must watch video below.
Guest post by Jessie.
“You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.”
I have closed out the ‘short stocks’ portion of my stocks-bullion hedged trade today. There may be more downside ahead for equities, but it looks to be a bit overdone, at least in the short term. I also took some of the bullion positions down as I had taken it to a maximum on that big decline shortly before the US Presidential election. Now it is at a more comfortable ‘running’ level. As always, this is with regard to my ‘trading positions’ as I do not touch or even look at my long term holdings.
Gold has moved very nicely through the resistance around 1720 and ‘stuck a close’ for today over 1730. We *might* see a test of that resistance at 1720, which is now support below the current price. But if this is a handle in a cup-and-handle formation, then that does not matter, and it is playing out very well. However a clear break above 1800 is key.
The central banks are printing money to rescue the Western banking system. There is an enormous macro event taking place in the global currency as the US dollar reserve currency agreement, in place since World War II, has been changing for at least the past ten or more years, first slowly but soon with increasing speed.
Very few people understand what is happening, even amongst economists. Those who stand against this sort of change will find themselves swimming against a rather powerful secular tide. There is nothing cyclical about this financial crisis or the economic ills that have accompanied it in the conventional economic sense, unless one wishes to start looking at very long, generational cycles of human wickedness and folly.