The article below Trump Carnage In Bonds from MarketWatch marks the low in the bond market. October 4th (scroll below) I blogged here that "Yield markets were ready to take on some heat". As you can see with the chart below, we have now had 1 of only 4 of the largest draw-downs in the bond markets within the last 16 years. This presents opportunities to build new positions in bonds and Yield markets. Start with short term notes and work out towards to end of the curve over the next few weeks.
If you've been following me on Twitter @RedBridgeCapitL or this blog you know I called the top in the markets by reading the risk levels in the last bullish sector Telecom. You can scroll down for previous posts. This is an update that we are getting to levels where we want to buy Telecom.
He just has more money to bet but as Ray Dalio of Bridgwater says...
"You can win but you can't do it by trying to beat the pro's at their own game." - Hedge Fund Legend Ray Dalio of Bridgewater
Tweets from Election Night Nov 8th 2016
Day after Nov 9th we find out Carl Icahn Bet $1Billion
"Learn how to become and Insider. You need to know the rules of the game before you play the game. Otherwise, that person with experience is going to end up with your money." - Tony Robbins. Money is a game.
Nov 9th 2016 3:22pm EST
The last #POTUS transition sent the market crashing 40%, but I know what you're thinking... This time is different? Wrong! A healthy recession is necessary so governments and corporations can replenish their debt (write off) and sure up their balance sheets. When Trump talks about 4% GDP can be accomplished through a healthy recession. This way we'll get back to creating 400k month jobs vs. the 150k we have now. Don't say I didn't tell you so... More later as the market develops.
The Big Short continued from my 9/20/16 post. (scroll below) On that day I posted the same chart as shown but when 100% of the telecom stocks were bullish. Today, Nov. 2nd 2016 that has been cut in half. As I also mentioned then that Apple Computer which has 52% of its market cap tied up in the iPhone will be the Big Short. This was the most favored stock by analyst with a medium price objective of $130 (as of this day Apple is at $110).
The health of a market is made up of its compenents. When Telecom was the last remaining bullish industry, it was just a matter of time (law of numbers) until when the market would drag this sector down with it. Now, the market is ripe for a big selloff with no strenth within its sectors. The only places to hide will be Gold and Bonds.
So it looks like the defensive sectors had big moves following Hillary and FBI email investigations. Every other sector is either neutral or overbought. There are just a few sectors worth buying, GOLD, Utilities and Healthcare at this time. Not really a recipe for the bulls to take the markets to new highs. Notice, also the 3:30 melt up is gone.
The cracks in the last remaining overbought sector, Telecom is showing. (See earlier post) I expect that when APPLE report sales Oct. 25th they will see a slow down in iPhone sales which will further exacerbate the sell-off. As you can see iPhone represents 52% of the market cap of $AAPL. One small note... given the Samsung fallout they may be able to give better guidance but they will still see slowing sales in iPhone 7 units.
Gold suffers It's worst week since Sept. 2013- IBD week of October 10, 2016.
Now with this headline, I am starting to get interested in looking into Gold because its within the threshold where Institutions buy and accumulate positions. My interest is only strong enough to start looking for a shopping list. On the list I will include and not in any particular order: AEM, ABX, BHP, BBL, FNV, RGLD, SLW,TAHO.