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DrBubb's Diary - Q1. 2020 Trading - v.132


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Trump's Buying TIP is worrying in one way: It may show the US is still too complacent.

If there was a 1,000 point drop, because the disease has spread outside China, what will happen to the US market

If we start seeing Clusters pop-up in the USA

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SEVERE CASES are falling fast now... if you believe the statistics.
25th: 10,007> 9216 : - 7.9%
26th:   9216 > 8839 : - 4.1%

Problem for the markets is that NON-China cases are jumping now.
Up 71% in just 3 days. A breakout?

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SOLD my $10 Puts on silver stock CDE yesterday, for more than a Double

CDE / Coeur Mining ... 1 year / Last: $4.94, down for 12 mo. High of $8.29

53w8fn3.gif

===

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GOLD vs Bonds, including TIPS (inflation protected bonds)

Made valuable discovery not long ago - on what has been a key driver of the Gold price

Tips Led?: GLD ($132.14) vs TLT ($132.44) from 5.Jul.19 : 10d / GLD:$137.06 / TLT:$135.00= r-101.5%

xx

 

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ANTARCTICA _ He mentions at about 28 Minutes in:

"There are said to be Three big UFO's under the ice, nicknamed: The Nina, The Pinta, and the Santa Maria... after Columbus"

BRAD OLSEN: AUTHOR, EXPLORER RE ANTARCTICA & ANCIENT SITES

 

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Another UGLY day, with Dow down almost 1,000

- And ugly especially for some Gold shares

GCM.t was down $1, at one stage. higher now

Surprizingly, MUR is now slighlt up on the day,  I bought calls yesterday, when it was lower

Looking at SLB, seeking courage.... Might buy some SLV calls

x

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MIND the CYCLE ... in SILVER

SLV is the etf for Silver (which closed at $16.46) / $15.53 = 106% -> about $1.00 difference

2cNEOWj.gif

Anyone see a cycle here? (haha)

Silver, & silver shares ... still in an uptrend / update ::  SIL ($27.23) /$15.53 = R-175%

CMn5xE3.gif

Ratio: 175%= SIL ($27.23) /$15.53 ... was recently above 200%

w2uCarD.png

==

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ROUBINI forecasts 40% drop... The end of a very rough week for U.S. markets brought a worrying prediction.

While one expert warned fallout from the global coronavirus outbreak could be "worse than the financial crisis" of 2008, the economist who correctly predicted that very crisis is now saying the idea of a major global recession "doesn't sound too farfetched."

Nouriel Roubini, a New York University business professor and market prognosticator who foretold the housing bubble burst, told Yahoo Finance on Friday to expect "severe" consequences as the coronavirus continues to rattle markets. How severe? He told Der Spiegel it could be worse than investors even believe at this point, predicting "global equities to tank by 30 to 40 percent this year."

He said people "prefer to believe in miracles," (not necessarily referencing President Trump's prediction the coronavirus will "disappear ... like a miracle,") and don't realize the "simple math" tells us that realistically, a squeezed Chinese economy will mean downturns around the globe. "This crisis will spill over and result in a disaster," said Roubini. > https://theweek.com/speedreads/899110/stock-markets-are-headed-40-percent-plunge-says-economist-who-predicted-financial-crisis

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CHINA's HALT HIDDED with fake Stats?

China Orders Owners Of Closed Factories To Boost Electricity Usage, Pretend Economy Is Back To Normal

Faced with a catastrophic dilemma, and forced to choose between either economic collapse due to mass quarantines, or economic collapse due to a frozen economy - with the bulk of China's SMEs which are responsible for 60% of China's GDP, facing insolvency in 2-3 months unless things return to normal - Beijing reversed track and started to openly manipulate the coronavirus data in mid-February to contain the widespread panic and give the impression that it had the pandemic under control,

> https://www.zerohedge.com/economics/china-orders-owners-closed-factories-crank-electricity-usage-pretend-economy-back-normal

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2020 Crash - Complacency Came Before The Fall

Everything was ignored and markets and stocks were relentless chased higher into some of the highest market valuations ever. Even the coronavirus was ignored. A dip to buy in January they said. AAPL warning? Let’s ignore it and buy AAPL to new all time highs again.

Nothing mattered until it did.

Then markets crashed last week. Perhaps not in percentage terms, but in terms of vertical velocity to the downside it was unmatched in history. The fastest 15% correction off of all time highs ever and by far.

Worse, months of buyers of stocks and markets at high valuations suddenly found themselves trapped as the bottom fell out inside of a few days:

NYSE-5_0.png

$NYSE, the broader index dropping below the January 2018 highs and closing below the summer 2019 lows now showing an index that has gone nowhere in 2 years and the recent highs being a complete mirage.

The big message: It was not different this time. Bears were right. Full stop.

> https://www.zerohedge.com/markets/2020-crash-complacency-came-fall

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MAIN GOOD NEWS: Active cases are falling (IF stats are acccurate)

GFLODnF.png

Mar #Cases: #Chg.: #CHINA: C.Pct: Critical: -%-: Death: Recov.s: %Rec: Active: Non-C: #chg.
29:   84,624: +1,245: 79,251 : 93.7%: 7,816 : 9.2%: 2,923: 39,903: 7.32%: 42,271: 5374: +824
01 :  86.991: +2,366: 79.826 : 91.8%: 7,569 : 8.7%: 2,978: 42,326: 7.04%: 41,310: 7165: +1791, 33.3%
===
> CORONAVIRUS STATS / > https://www.worldometers.info/coronavirus/

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BULLSEYE ! - on my IWM -170 Peak Target, from before Christmas 2019.

MY TARGETS were, Late Dec. & Jan. -  - - / Actual Highs ! :

IWM / Russell 2000 : target was 170-171  /170.36- on 1.17.2020

Initially, SPX-3,300, later raised to: 3,350 / 3,393 - on 2.19.2020

INDU: 29,128.  Maybe 29.000 or 30,000.   / 29,600- on 2.12.2020

XLF / Financials etf : target not given.       / $31.38- on 2.12.2020

TOPS - chart updated in 2020, period starts in Late 2017:

lPCBXcA.gif

===== ( follow was posted before Christmas 2019):

"Discrete Targets for US stock indices?" - I wrote in my 2020 TIPS thread, at the end of 2019

Looks like the record IWM high of 170.07 may be a good target - that's 2.4% above Friday's close of 166

That's 37.0% over the IWM-124 Low. +38.2% above the 124 Low would be: 171.4.  So I am targeting: 170-171 for IWM.

IWM vs. SPY, XLF ... update / Last: 165.97, 320.73, 30.68 / INDU: 28,445

olmVNK8.gif

2.4% over the SPX Close of 3,221 would be: 3,298, Call it SPX-3,300

2.4% over the INDU Close of 28,445 would be: 29,128.  Maybe 29.000 or 30,000 as a round number target

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MIND THE GAPS !

I will show you one of my favorite gaps right now - and then explain it...

First, I need to SET THE TABLE...

As you might expect, there is a high degree of correlation between GLD (gold), & TLT (bonds). And even more with LTPZ (Tip Bonds).  It is clear in this chart

GLD -vs: TLT, LTPZ ... update : $140, -5.00, -3.65%, vs: $140 - 0.0%, $100 - 0.0%

VBU3QjR.jpg

Notice that... on Friday, there was a BIG DROP (-3.65%) in GOLD, but not in TLT or LTPZ. 

this is unusual. and the GAP you see there may be telling us something important.  The drop in GLD may be temporary, &/or bond prices maybe be set to drop

Q: Perhaps bond prices are finalizing their rise which will lead to a top that won't be revisited for some time to come

Sure it could go either way... or maybe the GAP will not fade.

Let me tell you how I will play this "narrowing", ie my expectation that the Ratio of GLD-to-LTPZ will narrow

Q: Will you go long GLD short LTPZ outright or via options?

Valid ideas, (though LTPZ is much less liquid than GLD or TLT.)  But I will do something else...

SILVER!  Or actually, SLV, which is the etf for Silver.  I have added it to the chart / update: SLV & GLD, vs: TLT & LTPZ

ds79E3w.gif

In fact, on Friday near the NY close, I bought $15 Calls on SLV: End-Mar. expiry at $0,77, and Mid-April at $0.91.

These are in-the-money Calls with a strike price below the Friday close of $15.53

Previously, back in mid-Dec., : I bought SLV Jan. $15.50 Calls at $0.48
A few weeks later, in three trades, I sold them at an average of $1.59 - for a 231% gain
(This is recorded in Real-time comments on my 2020 Tips thread😞
 

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Speaking of GAPS....

I love buying and selling things on extreme turning points when I Can.

And the Ratio charts may help me to spot those extremes

We may have seen an extreme last Friday, in the Ratio of SLV-to-LTPZ.  Here is the chart

2BaVvU2.png

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BIG MOVES - anything over 1% is large
SPY: 309.09 +12.83, +4.33%
VIX: %33.42 - 6.69, -16.68%
TLT: 153.94 - 1.14, -0.74%
GLD: 149.20 +0.82, +0.55%
SLV: $15.56 +0.03, +0.19%
XLE:  $47.10 +1.83, +4.04%
MUR: $19.06 +0.21, +1.11%

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10:55 3-month/10-year Treasury yield curve no longer inverted after Fed surprise rate cut MarketWatch

10:54 Stocks Swing Wildly After the Fed Made a Surprise Rate Cut Barron's Online

03:34 Why stocks are tumbling despite the Fed’s surprise interest rate cut MarketWatch

03:32 The Fed Just Cut Interest Rates. Get Ready to Refinance Your Mortgage. Barron's Online

cc

 

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Gold & Silver still looking good, after last week's selloff

Supported by rising Bonds (TLT), and TIP Bonds (LTPZ)

GLD vs.: SLV, / TLT, & LTPZ ... from 10.May.2020 : $154.16, TLT:$154.67 / SLV:$15, LTPZ: $70

zftskUN.gif

Gold -toSilver ratio: At 95.27x , which is still very high

EAwh1Wm.png

GLD -toTLT ratio : 99.67% / For many months, has been swinging a little either side of 100% Ratio

M7KpwF3.png

SLV -toLTPZ ratio: 20% : down to a Low below 20% - Note the Cycle

WBh8rkE.png

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Gold & Silver still looking good, after last week's selloff

GOLD to SILVER ratio recently hit a Record High of 100x.  I still like silver

Supported by rising Bonds (TLT), and TIP Bonds (LTPZ)

GLD vs.: SLV, / TLT, & LTPZ ... from 10.May.2020 : $154.16, TLT:$154.67 / SLV:$16.09, LTPZ: $80.67

zftskUN.gif

SLV to-GLD ratio got down to just 10.20%. Bounce or rally may be underway

gyeRgCt.png

Gold -toSilver ratio: At 95.27x , which is still very high

EAwh1Wm.png

GLD -toTLT ratio : 99.67% / For many months, has been swinging a little either side of 100% Ratio

M7KpwF3.png

SLV -toLTPZ ratio: 20% : down to a Low below 20% - Note the Cycle

WBh8rkE.png

===

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At current price levels, in this challenging environment...
I have become Bearish... and Three Key PH Property stocks have confirmed that view

PH Property Stocks

GtHv7B3.gif

Will we see LOWER PH Property PRICES?? 

The supply of Properties for Sale is going to surge because:

1. Properties still being delivered, and new ones started.  Few projects will be stopped. 

2. People who are afraid will stop buying,

3. Banks will not finance large final payments, when the what is left to pay is BELOW the realistic marlet value of the property, This will force those who cannot make the last payment to sell

4. Flippers will aim to flip to exit their property speculations, if they can,

5. Chinese buyers, who cannot get back to PH will try to unload what they have bought/  

WHERE ARE THE BUYERS who will absorb all this supply?

Even if they are there, what price will they be willing to pay now??

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HOW to Hedge a Gold position with Bond options (use Calls on TMV)
 

TMV/20yr TBond 3xBear vs- dGLD & dSLV .. fr. 2015: 10.6.19: 5yr: 2yr: 1yr: 6mo: 10d / $6.09 -1.13, $20.88, $16.71

QIWZqtg.gif

: 10.6.19: 5yr: 2yr: 1yr: 6mo: 10d

WqYx4Ox.gif

10d : TLT-Gld-Slv-10d / $6.09 -1.13, $20.88, $16.71 // $166.77 +8.25, $157.55 +0.05, $16.18 -0.12

QMytdS4.gif

: TLT-Gld-Slv-10d $166.77 +8.25, $157.55 +0.05, $16.18 -0.12

Gold & Bonds have shot up, while Silver has lagged - Gold-to-Silver ratio is up near the 100x High. 

: SLV-Gld-Tlt- 5yr : 1yr: 3mo / TLT: $166.77 / SLV: $16.18 = Ratio

A37bo23.gif

: SLV-Gld-Tlt since sep.2018

xx

: SLV-Gld-Tlt-10d : 5yr $16.18 -0.12, $157.55 +0.05, $166.77 +8.25

k59iWyJ.gif

Ratio: TLT to-SLV: 10.3x , Has shot up since beginning of 2020, as Bond yields dropped

Z9QxOys.png

==

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HOW to Hedge a Gold position with Bond options (use Calls on TMV)
 

TMV/20yr TBond 3xBear vs- dGLD & dSLV .. fr. 2015: 10.6.19: 5yr: 2yr: 1yr: 6mo: 10d / $6.09 -1.13, $20.88, $16.71

QIWZqtg.gif

: 10.6.19: 5yr: 2yr: 1yr: 6mo: 10d

WqYx4Ox.gif

10d : TLT-Gld-Slv-10d / $6.09 -1.13, $20.88, $16.71 // $166.77 +8.25, $157.55 +0.05, $16.18 -0.12

QMytdS4.gif

: TLT-Gld-Slv-10d $166.77 +8.25, $157.55 +0.05, $16.18 -0.12

Gold & Bonds have shot up, while Silver has lagged - Gold-to-Silver ratio is up near the 100x High. 

: SLV-Gld-Tlt- 5yr : 1yr: 3mo / TLT: $166.77 / SLV: $16.18 = Ratio

A37bo23.gif

: SLV-Gld-Tlt since sep.2018

xio5TbZ.gif

: SLV-Gld-Tlt-10d : 5yr $16.18 -0.12, $157.55 +0.05, $166.77 +8.25

k59iWyJ.gif

Ratio: TLT to-SLV: 10.3x , Has shot up since beginning of 2020, as Bond yields dropped

Z9QxOys.png

Sometimes Silver Dropped when Bonds went up... But then Silver Rose when Bonds dropped

ZapPKyE.gif

==

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EUR is one of the few things UP today - Hit $1.15

EUR in USD ... all data

wWhfidL.gif

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LOCKDOWN WORKS: 

Only 4 new cases in China, No new deaths there yesterday. 

Active Chinese cases are down to 17,505, that's just 35% of the Global active of 49,526.  China has reported 68% of total cases.  New Cases rose +4,356  globaly. The Non-china cases load rose 13% yesterday.  More countries are "going green" with all cases recovered.  But these are small countries.  Italy is now #2 with over 10,000 cases

/ 2 /

Investors Prepare to Ride Resumed Economic Boom After Coronavirus Fears Subside

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