Baltic Dry Index. 1123 -02 Brent Crude 62.94
“There is only one side of the market and it is not the bull
side or the bear side, but the right side.”
Jesse Livermore
For now we have yoyo stock markets, but it’s a strange week,
with much of Asia heading off on their New Year holiday, and all the word
awaiting a US interest rate signal from tomorrow’s US inflation figures. Benign,
an US rates might ease some, giving more breath to the rebound rallies. Bad, and
just the opposite will happen, the US 10 year will probably reach 3 percent,
triggering another surge in volatility and swoon in US stocks.
But either way it’s very late in the day to
be picking up pennies in front of steam rollers. Medium and longer term,
interest rates are set to “normalise,” and higher interest rates are not good
for most stocks. Worse, in the short term, can anyone consistently make money
in yoyo markets? It’s never happened in the past.
Below, news from the ever more unstable
casinos.
“The nature of the game as it is played is such that the public
should realize that the truth cannot be told by the few who know.”
Jesse Livermore, Reminiscences of a Stock Operator
Asia Stocks Gain in Global Rebound; Yen Climbs: Markets Wrap
By Adam Haigh and Andreea Papuc
Updated on 13 February 2018, 04:38 GMT
Asian stocks rose amid signs markets are beginning to stabilize after
the biggest weekly rout in two years. Japanese equities pared gains as the yen
advanced.
Shares in Hong Kong and China led the rally in Asia after the S&P
500 Index posted its biggest two-day advance in 18 months. Japan’s equities
retreated from the day’s highs after traders returned from a holiday Monday,
while S&P 500 futures declined. The 10-year Treasury yield was steady after
falling back from touching 2.89 percent, and the dollar remained under
pressure. West Texas Intermediate oil remained under $60 a barrel.
The Cboe Volatility Index fell, but traders were still on edge following the tumultuous moves last week that wiped $2 trillion from U.S. stocks.
Still, some investors are waiting for another dip in the markets before stepping back in. AMP Capital Investors’ Nader Naeimi -- who in September had about 30 percent of holdings in cash -- said this is a short-term recovery and there will be another leg down in equities going into the Federal Reserve’s March policy meeting.
“The plan is to buy on the second leg down,” Naeimi, Head of Dynamic Markets in Sydney, told Bloomberg TV. “Usually it’s best to wait for the market to build a base before committing heavily back into buying.”
Morgan Stanley chief U.S. equity strategist Michael Wilson reversed his week-old cautious call, joining peers at Goldman Sachs Group Inc. and JPMorgan Chase & Co. who have told clients to buy the dip.
With investors questioning the outlook for monetary policy, billionaire hedge fund manager Ray Dalio said the risks of a recession in the next 18 to 24 months are rising and that bonds are past their peak. Dalio said the U.S. is further along in the business cycle than he thought and that it’s difficult to make a call on equities.
----Here are some important things to watch out for this week:
- Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21. India is out Tuesday for a public holiday.
- The U.S. consumer-price index probably increased at a moderate pace in January, economists project. Retail sales in the U.S., also out Wednesday, probably increased for a fifth straight month.
- Japan is expected to extend the longest stretch of economic growth since the mid-1990s when it reports fourth-quarter gross domestic product on Wednesday.
- Earnings season continues in full swing with reports from Bunge, TripAdvisor, SunPower, Con Edison, Bombardier, PepsiCo, MetLife, Cisco, Japan Post Bank, Credit Suisse, Nestle, Airbus, Allianz, Telstra and Coca-Cola.
https://www.bloomberg.com/news/articles/2018-02-12/japanese-equities-set-to-gain-after-u-s-rally-markets-wrap
A $120 Billion Manager Expects Another Equity Selloff by March
By Eric LamThat’s the message from Nader Naeimi of AMP Capital Investors Ltd. who’s still hanging on to the bulk of his cash reserves for another possible selloff by March.
After an initial sharp selloff, equity markets typically have a brief recovery before another bout of sustained selling, said Naeimi, AMP’s head of dynamic markets who helps oversee about $120 billion at the firm. After moving some 30 percent of his assets to cash last year, Naeimi is waiting for that second round to occur before jumping back in.
“The plan is to buy in the second leg down, usually it’s best to wait for the markets to build a base before committing heavily back into the buy side,” Naeimi said in an interview with Bloomberg Television. “As we go to the Fed meeting March 9, I think there will be more potential volatility weakness.”
Still, Naeimi is dipping his toes back into the stock market and has started returning to some cyclical positions including energy, financials and Japanese equities. He is also impressed by the resilience of emerging market stocks and currencies during the rout and rising volatility.
More
https://www.bloomberg.com/news/articles/2018-02-13/a-120-billion-manager-expects-another-equity-selloff-by-march
February 12, 2018 / 11:43 AM
Commentary: Speculators in biggest ever U-turn on low volatility bets
LONDON (Reuters) - The wild gyrations rocking global markets this month have sparked the biggest ever reversal of speculators’ bets on low volatility.
For investors, this could be a game-changer. As Citi strategists told
clients on Monday, “Time is Up for Goldilocks”.
The suddenness and severity of the position shift suggests 2018 will be
very different to 2017. Structurally higher volatility will make for a much
less equity-friendly environment.
The fairy tale character who preferred her porridge neither too hot nor
too cold had become synonymous with the benign monetary and economic conditions
that fuelled the boom in world stocks over the past two years. The nexus of
that was a prolonged period of historically (and bafflingly) low volatility.
Like all fairy tales, however, it turned out to be an illusion. Sparked
by fears that U.S. inflation might be about to take off, leaving the Fed asleep
at the wheel, the VIX index of implied S&P 500 volatility exploded last
week.
Its rise on Monday Feb. 5 was the biggest ever, accompanying the
steepest decline on Wall Street in over six years and wiping trillions off the
value of world stocks. It also prompted the biggest ever shift in speculators’
“low vol” bets.
Chicago Futures Trading Commission data for the week to Feb. 6 show that
hedge funds and speculative investors flipped to a net long VIX futures position
of 85,818 contracts.
Not only is that a record long position, the swing of over 145,000
contracts from a net short 59,357 contracts the week before was by a huge
margin the biggest ever week-on-week change.
A long position on the VIX index is effectively a bet on high or rising
implied volatility, and a short position is a bet implied volatility will fall
or remain low.
Speculators have held an almost unbroken short VIX position for the past
decade, CFTC data show, culminating in a record short 174,665 contracts in
October last year.
Morehttps://uk.reuters.com/article/uk-global-volatility-speculators/commentary-speculators-in-biggest-ever-u-turn-on-low-volatility-bets-idUKKBN1FW146
In other non gambling news, President Trump talks up his imminent trade war, but is it all just more Trumpian huff and puff?
Trump Vows `Reciprocal Tax’ on Imports From High-Tariff Countries
By Jennifer Epstein
Updated on 12 February 2018, 22:26 GMT
President Donald Trump promised a tax on imports, reviving an idea
he floated earlier in his administration that risks escalating tensions with
key U.S. trade partners.“We’re going to be doing very much a reciprocal tax,” Trump said Monday at a White House event on infrastructure. “And you’ll be hearing about that during the week and during the coming months.”
Trump didn’t elaborate on his plan at the event. Later in the day, a senior administration official said there is no formal proposal for such a tax in the works and the president was simply reiterating sentiments he has long held.
Trump shifted during the discussion of infrastructure to blast “very unfair” treatment of the U.S. by “so-called allies, but they’re not allies on trade” that charge tariffs on U.S. producers yet benefit from lower U.S. trade barriers to export to America.
“We cannot continue to be taken advantage of by other countries,” Trump said in the White House meeting with state and local officials. “We cannot continue to let people come into our country and rob us blind and charge us tremendous tariffs and taxes and we charge them nothing. We cannot allow that to happen.”
Trump emphasized the point in an exchange later during the event with Commerce Secretary Wilbur Ross, saying “oh, would he be in trouble” if he didn’t support the tax. “Could you imagine if he said no,” Trump said to laughter.
Ross followed with a full-throated endorsement of such a measure. “We gave away so much unilaterally that we really have to claw it back” from trading partners, he said.
More
https://www.bloomberg.com/news/articles/2018-02-12/trump-says-he-will-unveil-reciprocal-tax-on-imports-this-week
“It has always been my experience that I never benefited much from a move if I did not get in at somewhere near the beginning of that move.”
Jesse Livermore
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
No crooks, scoundrels or bent politicians today, at
least not in the usual sense. Just food for thought from Russia.
Russian Billionaires Are Building Megaschools to Rival Eton and Exeter
By Ilya Khrennikov and Irina Reznik
12 February 2018, 03:00 GMT
As part of a push to get more Russian business leaders
involved in education, President Vladimir Putin sat down with some of the
country’s most gifted pupils for a televised chat about the value of life, love
and learning.
They gathered at Sirius, an educational center Putin established in
Sochi after the 2014 Winter Olympics with backing from multiple billionaires.
Promoted by the Kremlin as a model for grooming talent, Sirius runs 600
exceptional students a month through intensive courses in everything from
physics and coding to chess and ballet.
“The more intelligent and educated people are, the less aggressive they
are,” Putin, a self-confessed street thug in his youth, told the children last
July.
Putin’s own aggression on the world stage has become an
unexpected catalyst for an investment boom in Russian education. As U.S.
and European leaders continue to work to isolate Russia over alleged
election meddling and the conflict in Ukraine, a growing number of tycoons are
pulling their children out of western schools and putting money into private
projects that will aid Putin’s attempts to reverse a decline in national
academic rankings.
Since Russia annexed Crimea from Ukraine a month after the Sochi
Olympics, more than 30 billionaires and senior executives with investments
abroad have founded or helped fund projects to nurture students at home. The
outlays coincide with a halving in the number of new Russian enrollments
at boarding schools in Britain, long the educational destination of choice for
the country’s elite, to 608 last year, according to the U.K. Independent
Schools Council.
----Moshkovich, who sent his two oldest children to Stanford University, said what makes his school unique, apart from the price tag, is that rich people like himself can’t buy a kid’s way in. Even his youngest son won’t be admitted unless he passes the blindly graded entrance exam like everyone else, he said.
“I’m not building a school for children of officials or sanctioned
businessmen or oligarchs from Rublyovka,” Moshkovich said in an interview,
referring to one of Moscow’s poshest districts. “Education is the key driver in
the modern world and I want Russia to be competitive. This is for soul and
country.”
The first nation in space has fallen behind relative newcomers in math
and science, mainly from Asia. A top six finisher in the pre-college
International Mathematical Olympiad every year until 2015, Russia tumbled to a
worst-ever 11th last year, behind upstarts like Vietnam, Iran and Thailand. On
a broader level, Russia is middling, ranking 32nd out of the 72 countries in
the PISA exam of 15-year-olds, far behind Estonia, a fellow former Soviet
republic.
----Moshkovich, 50, who made his fortune in sugar and pork, retired from the senate in 2014 to focus on education. He’s hoping the methods he’s developing at Letovo will stimulate reforms nationwide. His school will offer students both a Russian diploma and a certificate from International Baccalaureate, a Swiss non-profit with a curriculum it says “prepares students to succeed in a world where facts and fiction merge in the news.”
Letovo is modeled on the best international institutions in the world,
with an expert council staffed by recruits from schools that understand the
importance of atmosphere in learning like Winchester College in the U.K.,
Montgomery Bell in the U.S. and Raffles in Singapore, Moshkovich said.
His
$80 million campus includes dormitories, tennis courts, a soccer field, a
running track, a stream and an artificial lake rimmed by pine forest. The other
$120 million is set aside in an endowment, most of which is already deposited
in Sberbank and earning interest. Tuition will run about $20,000 a year, half
of what a comparable British school charges, but parents who can’t afford the
full amount will be eligible for grants on a sliding scale.
More
“I have been in the
speculative game ever since I was fourteen. It is all I have ever done. I think
I know what I am talking about. And the conclusion that I have reached after
nearly thirty years of constant trading, both on a shoestring and with millions
of dollars back of me, is this: A man may beat a stock or a group at a certain
time, but no man living can beat the stock market! A man may make money out of
individual deals in cotton or grain, but no man can beat the cotton market or
the grain market. It's like the track. A man may beat a horse race, but he
cannot beat horse racing.”
Jesse Livermore
Technology Update.
With events happening fast in the development
of solar power and graphene, I’ve added this section. Updates as they get
reported. Is converting sunlight to usable cheap AC or DC energy mankind’s
future from the 21st century onwards?
New desalination membrane produces both drinking water and lithium
Michael Irving 12 February 2018Seawater is a complex cocktail of useful minerals, but it's hard to separate out the specific ones we need. Now, a team of scientists from Australia and the US has developed a new water desalination technique that can not only make seawater fresh enough to drink, but recover lithium ions for use in batteries.
The key to the process is metal-organic frameworks (MOFs), which boast the largest internal surface area of any known material. Unfolded, a single gram of the material could theoretically cover a football field, and it's this intricate internal structure that makes MOFs perfect for capturing, storing and releasing molecules. Recent research into the material could see MOFs put to work as carbon emission sponges, high-precision chemical sensors, and urban water filters.
Currently, reverse osmosis membranes are the most commonly-used technology for water filtration, and they work on a fairly simple principle. The membrane's pores are large enough for water molecules to pass through, but too small for most contaminants. The problem is that to work, these systems require water to be pumped through at relatively high pressure.
MOF membranes, on the other hand, can be more selective and efficient. Researchers at Monash University, the CSIRO and the University of Texas at Austin have now developed just such a membrane. The design was inspired by the "ion selectivity" of biological cell membranes, allowing the MOF material to dehydrate specific ions as they pass through. Better yet, these filters don't require water to be forced through, saving on energy use as well.
"We can use our findings to address the challenges of water desalination," says Huanting Wang, an author of the new study. "Instead of relying on the current costly and energy intensive processes, this research opens up the potential for removing salt ions from water in a far more energy efficient and environmentally sustainable way."
But clean drinking water isn't the only end product of the MOF membrane. Lithium is in high demand, thanks to the lithium-ion batteries that power everything from smartphones to electric cars. Those ions are left behind in the spongey structure, ready for the taking.
"Lithium ions are abundant in seawater, so this has implications for the mining industry who currently use inefficient chemical treatments to extract lithium from rocks and brines," says Wang. "Global demand for lithium required for electronics and batteries is very high. These membranes offer the potential for a very effective way to extract lithium ions from seawater, a plentiful and easily accessible resource."
The technique could also be put to work filtering waste water from industrial processes like fracking.
"Produced water from shale gas fields in Texas is rich in lithium," says Benny Freeman, co-author of the study. "Advanced separation materials concepts such as ours could potentially turn this waste stream into a resource recovery opportunity."
The researchers say they plan to continue studying how to make MOFs even better at selecting for lithium ions.
The study was published in the journal Science Advances.
Sources: CSIRO, UT Austin, Monash University via Science Daily
Play
the market only when all factors are in your favor. No person can play the
market all the time and win. There are times
when you should be completely out of the market, for emotional as well as
economic reasons.
Jesse
Livermore.
The monthly Coppock Indicators finished January
DJIA: 26,149 +282 Up. NASDAQ: 7,411 +310 Up. SP500: 2,824 +212 Up.
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