Jared Ling

June 20, 2016

Volatility, Energy, Economy, Others, Commodities, Equities, Fixed Income, Currencies

Fed Turns Dovish In June, Sparks Chaos Everywhere

Jared Ling

June 20, 2016

Volatility, Energy, Economy, Others, Commodities, Equities, Fixed Income, Currencies

Fed Turns Dovish In June, Sparks Chaos Everywhere

The Fed left interest rates unchanged during its June FOMC meeting, exactly as we previewed and exactly as the markets expected. According to most analysts, commentators, and in some part the financial markets themselves, just about every aspect of the June FOMC event was more dovish than had been anticipated.

Unsurprisingly for us though, as we had already warned of an indecisive Fed; a once credible central bank which had inherited the tendency to troll markets left, right and center.

We maintain our stance that the Fed will remain indecisive, further loose confidence about positive momentum in the economy, and thereby adhering more to a 'wait and see' rather than a 'do and adjust' policy.

Jared Ling

June 15, 2016

Currencies, Volatility, Others, Fixed Income, Equities, Economy

Fed & BoJ To Troll Markets This Week

Jared Ling

June 15, 2016

Currencies, Volatility, Others, Fixed Income, Equities, Economy

There's never been a central bank more thuggish than the Fed. First, it delayed hiking rates by more than 11 months, only doing so once in December by a tiny 25bp. Remember the vicious cycle of "promising to hike, only to scare markets into a drawdown, refusing to hike, therefore talking markets into a rally" we have been taught by the Fed to abide by?

With each passing FOMC meeting (already 4 have passed this year), and with every twist and turn of the macro economic grade book, the markets have rallied and tanked in a vomit-including clusterf***, in the process trolling traders and screwing investors' portfolios.

Jared Ling

June 8, 2016

Commodities, Currencies, Fixed Income, Economy, Others, Volatility, Equities

Largest NFP Miss Ever Kills June Fed Hike

Jared Ling

June 8, 2016

Commodities, Currencies, Fixed Income, Economy, Others, Volatility, Equities

Largest NFP Miss Ever Kills June Fed Hike

When we first saw the 38,000 print, we thought it was an error with our news feed. But no, the U.S. economy added only 38,000 non-farm jobs in May, the lowest since September 2010, and the biggest miss on record. It's really hard to overstate how morbidly bad May's payrolls were. It is, however, commensurately easy to kiss a June rate hike by the Fed a sweet goodbye.

This report was so ugly that we feel it leaves almost no room for an alternative interpretation. Specifically, one of forgetting about a June rate hike. The Fed is almost certainly not going to hike later this month.

With the addition of May's payrolls, we are outright bearish the U.S. dollar and will be looking for good opportunities to gain some short exposure. We are of course fully ready to stop dead in our tracks and turn on a dime, as must be expected when dealing with such troll-worthy elements.

Jared Ling

May 22, 2016

Fixed Income, Commodities, Volatility, Currencies, Economy, Others, Equities

April FOMC Minutes Put June Hike Back On Table

Jared Ling

May 22, 2016

Fixed Income, Commodities, Volatility, Currencies, Economy, Others, Equities

April FOMC Minutes Put June Hike Back On Table

First it was the April FOMC statement that turned out to be more dovish than hawkish, and then it was the April NFP report that missed expectations badly, busting market expectations for a June rate hike.

However as regular readers and subscribers to our journals will know, we believed that despite soft economic data and cautious/dovish Fed language, there was still a good chance for a Fed hike in June. The tides turned this week upon the release of the April FOMC minutes, and very abruptly so.

A hawkish turn was something we warned about in the preceding days before the release of the April Fed minutes. It was also one of the risks we highlighted here, and here, under uncertainties regarding monetary policy.

Jared Ling

May 7, 2016

Economy, Commodities, Others, Fixed Income, Currencies, Equities, Volatility

April NFP Misses Big, June Fed Rate Hike Busted

Jared Ling

May 7, 2016

Economy, Commodities, Others, Fixed Income, Currencies, Equities, Volatility

April NFP Misses Big, June Fed Rate Hike Busted

Yellen, we have a problem. April's jobs data was a disaster (as we had forewarned) and markets are starting to get properly concerned this time, judging by the way in which they reacted. A June rate hike by the Fed now seems less likely than ever before, with the Fed Funds futures market implying a mere 4% chance of a hike next month when the FOMC reconvenes to decide on the future of the U.S. economy.

The start of May is really turning out to be a summer of shocks, which is why even Bill Gross could possibility foresee the advent of QE being launched by the Fed — Helicopter money.

The April NFP report released Friday missed the headline expectation by 40,000 jobs coming in at 160,000, or the lowest since September 2015 when the U.S. saw only 145,000 jobs added.

Jared Ling

May 3, 2016

Economy, Others, Volatility, Currencies, Equities

Dollar Eyed With Key April NFP Report This Week

Jared Ling

May 3, 2016

Economy, Others, Volatility, Currencies, Equities

Dollar Eyed With Key April NFP Report This Week

Last week was packed with central bank activity, with the Fed holding interest rates unchanged exactly as we previewed the event, and the BoJ's shocking stunner of doing absolutely nothing (despite heightened expectations of more monetary easing) has sent the U.S. dollar into a free fall, testing its May 2015 lows.

The focus this week will be on the American jobs market where the BLS is set to release the April Non-farm Payrolls (NFP) report this Friday at 830am EST. This puts all the attention back on the greenback, which has already been capturing headlines from financial media all across the world.

The consensus expectation is for an addition of 200,000 new jobs to the U.S. economy, down from March's 215,000 print. The U3 unemployment rate is expected to hold firm at 5.0%, but the focus will almost certainly be on wage inflation.

Jared Ling

April 28, 2016

Volatility, Others, Currencies, Economy, Equities

Fed Leaves Rates Unchanged & June Open For Hike

Jared Ling

April 28, 2016

Volatility, Others, Currencies, Economy, Equities

Fed Leaves Rates Unchanged & June Open For Hike

Following our pre-FOMC primer on what to expect during today's April Fed event, the Fed has once again left the Federal Funds target rate unchanged at 0.25% - 0.50%.

This is precisely what we talked about in out last snippet, that the Fed will rather err on the side of caution than to tighten prematurely and risk having to reverse its path of policy actions.

The market now expects at least a 25% likelihood that the Fed will hike rates during their 15 June meeting, once again back loading the path of tightening. We reckon that the Fed will not wish to wait beyond June to throw in its next interest rate hike.

Other than what we've mentioned above, this statement was more or less a snoozer and came in mostly as expected. We maintain our current stance on the markets we track and trade.

Jared Ling

March 22, 2016

Economy, Currencies, Equities, Volatility

We Told You Didn't We? Dollar Crashes Most Since 2011

Jared Ling

March 22, 2016

Economy, Currencies, Equities, Volatility

We Told You Didn't We? Dollar Crashes Most Since 2011

We did it. Our public call was once again vindicated by Mr. Market itself. No amount of shenanigans and hot talk rivals being right on a market call, and of course profiting from our correct call. We were right both on direction and timing. It doesn't get much better than this.

We're not boasting, we're merely proving the point that with a well thought out process correctly applied in the financial markets, most systems will almost surely work in the long run. Many traders fail to grasp this because they lack the patience, or worse still, approach this entirely wrongly.

If you've been regularly following our content on social media, you would have caught our cue more than 2 weeks ago on 4th March (see our Facebook post here). We mentioned in our post that we sensed weakness in the dollar index (DXY) despite it trading inside technical support areas and rhetoric on the street calling for the opposite.

Jared Ling

February 9, 2016

Volatility, Fixed Income, Equities, Currencies, Others

We're Loading Up The Shorts

Jared Ling

February 9, 2016

Volatility, Fixed Income, Equities, Currencies, Others

We've turned intermittently bearish again. Yes, you might be wondering why the flip flopping. That's because price action has been doing exactly that, flip flopping. It wasn't until late last week, specifically after Friday's release of the January NFP report that turned the tables for us.

We're bearish. Bearish enough to have loaded up a few shorts on risk. Bearish enough to lever up slightly on safety and closing all our longs on individual equity names.

Conclusively, the picture has become clearer for us, and we're really starting to get convicted on one direction.

Jared Ling

February 5, 2016

Equities, Fixed Income, Commodities, Volatility, Energy, Currencies

You Can't Trade This

Jared Ling

February 5, 2016

Equities, Fixed Income, Commodities, Volatility, Energy, Currencies

Last week we wrote about how we flipped from bearish to bullish in a span of a few days, and how we were right about our last call, albeit for a few days before it all fell to pieces courtesy of central bank inspired ire. You know what, screw all of that because we're on the sidelines. As we write, we have but a few small positions open in the market, but those are event specific plays.

Bottom line, we don't see how it's plausible to bet on short and medium term moves in today's markets. Everywhere you look there is choppiness the likes we haven't seen since August last year, where the story then was about Chinams forces devaluation of the yuan.