When it comes to Wall Street cover page superstitions, nothing beats the Barron's front page article jinx: just when you think something will never happen, Barron's confirms it on the cover, virtually assuring that it does. In which case, be afraid bulls, be very afraid, because if past is prologue Barron's just green-lit the next crash.
"Anybody who's short - and there are a lot of smart people who are in fact heavily short - they have to run for cover, and I think it could get ugly. In our account here, we quite literally were grasping for almost anything we could to reverse our position. Covering… or actually greatly reducing… our short position in the derivatives market was the first course of action.... We’ve learned over the years that when such things occur it is better to “shoot first and ask questions later."
This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve tried to push back up to that distant high that means new life several times, but each time the market falls into a pit again to where the market is once again lower than it was a year ago. These are the last gasps of a stock market (and economy) that is struggling to rise again, which it simply cannot do now that QE has been turned off and the oxygen tank of zero interest is being slowly turned down.
"We are net short of equities here in our account, although we are not materially so. We’ve only a few positions on: we are long of gold in EUR and Yen terms via GEUR and GYEN; we are long of a small bullish derivative of gold in US dollar terms and we are “short” of the market via derivatives positions. There are only two things that bother us..."
"Having been 150 Dow points higher and then only moments later to have traded down to where the Dow was suddenly 150 lower, the market finished effectively unchanged, with the Bulls and the Bears left scratching their heads and wondering aloud, “What the hell just happened?”... Yesterday was our worst day of the year thus far, as that which we were long of fell and that which we were short of closed unchanged."
"We were fully, completely and totally wrong. There is no reason to mince words; there are no excuses to be made, nor should there be. We were wrong… obviously and utterly and we shall do well and our best to simply acknowledge that fact... Does this mean then that we shall turn bullish of equities? Shall we cast aside our beliefs that the highs made one year ago in broad, catholic terms are suddenly to be thought of as within reach and likely to be taken out? Of course not."
"Quietly, but steadily, in our own account… our retirement funds here at TGL and the only money we manage but money that is really rather important to us, obviously!... we are turning bearish of equities... For the record, as of Friday’s close we are +4.3% for the year-to-date, out-performing our International Index handily and still out-performing the S&P and thus most hedge funds."
"Share prices have risen nearly universally higher as nine of the ten markets comprising our Internaitonal Index have risen, and only the market in Hong Kong has fallen, and even then it has fallen by the barest of margins. As a result, we have suffered one of our worst days of the year in our retirement funds, losing a bit more than 1% as we came into the markets with a modestly bearish point of view and were therefore modestly net short of the equity market."
Goldman Closes "Short Gold" Recommendation With 4.5% Loss; Will Continue Buying Gold From Its ClientsSubmitted by Tyler Durden on 05/10/2016 22:37 -0400
Iit took just two and a half months for Goldman to get officially stopped out of its short gold recommendation, which as we first noted, happened on April 29, when its the price soared above $1,300 breaching Goldman's stop. Officially, Goldman's Jeff Currie decided to take his time, although he too finally threw in the towel today admitting Goldman was wrong yet again with one more trading recommendation (recall that Goldman had earlier been stopped out and lost money on 5 of its Top 6 trades for 2016 in just over a month).
It is laughable when people pretend Zero Hedge is an outlet designed to be some go to place for trading ideas.
“When the facts change, I change; What then do you do, Sir?” The facts are changing in the world of crude oil; demand is still rather strong and supplies seem to be rising but only modestly. Further, the term structures are shifting. We had been, on balance and really quite openly, bearish of crude for the past several years, erring always to sell crude’s rallies rather than to buy crude’s weakness. That has been wrong for the past two months and it is time to acknowledge that “wrongness.” If the facts are indeed changing… and certainly they seem to be… then we too must change.
"We note that the CNN Fear & Greed Index, having risen late last week once again to 75… the level the creators of the Index have referred to as “Extreme Greed”… has fallen back from those highs and closed last evening at 70. The Index has spent the past seveal weeks forging what appears to us to have become a material “top” of some very real consequence. It “peaked” last autumn near 75 before stocks, as measured by the S&P, fell from 2075 to 1800 in a matter of weeks, and it peaked early last year at or near 80 before the S&P fell from near 2100 to 1800 also. In this regard, perhaps caution…perhaps very real defensiveness… is a reaosnable [sic] path to be taken."
Perhaps the reason for the surge is that Virtu's algos just wanted Gartman dead?
There is a reason for the saying "never say, never."
So after having been dead wrong on the reaction to the USD during three out of the past three major central bank announcements, has Goldman's FX strategist Robin Brooks finally thrown in the towel on his ongoing, and wrong, strong USD call? Not at all. Here is his latest note title "Check Please, Chair Yellen", in which he says "In line with our Fed view, we hold to our Dollar bullish call."