Did Yesterday's Open-Ended QE Announcement by the Fed Usher in a New Reflationary Wave?

Did Yesterday’s Open-Ended QE Announcement by the Fed Usher in a New Reflationary Wave?

The chart below shows the SPX on a weekly basis. Line (1) represents what we believe to be the market/economy’s most important line in the sand since 1987 – an on/off switch if you will. Why? This line is where…

Despite 175% Rally From August 2011, S&P Homebuilder Index Still Has ~20%-50% More Upside

Despite 175% Rally From August 2011, S&P Homebuilder Index Still Has ~20%-50% More Upside

I’ll reiterate my very simple thesis on homebuilders which I’ve maintained for quite some time now: They remain noticeably under-valued relative to where other bubbles tend to trade ~350-400 weeks after their peak bubble prices. This was much more so…

CAD$ at Resistance & Bulls At All-Time High

The chart below shows the CAD$ at resistance line (1) with crude facing resistance line (2). At the same time the % of the public that is bullish the CAD$ is now at ~85%, an all-time high rivaled only in…...

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Any Chance the Draghi Put is Now Priced Into the Euro & Corresponding Risk Assets in the Near-Term?

Any Chance the Draghi Put is Now Priced Into the Euro & Corresponding Risk Assets in the Near-Term?

All the way back on July 10th we highlighted the fact that the Euro sat on very critical support levels when it stood at ~1.21, some 600 bps lower than the current ~1.29. We noted that if one were risk-asset bullish…

Long Gold / Short Equities Has Been a Generational Trade That Will Likely Continue

Long Gold / Short Equities Has Been a Generational Trade That Will Likely Continue

Since 1999 the ratio of the SPX vs. gold has declined 85%. That’s  +485 bps annualized for somebody who was short the index and long gold the entire time. In the end, the logic for this trade remains quite simple:…

Does the Potential for a Gold Rally Mean Silver Must Follow it Higher?

We are long gold and have been for weeks now following a break-out of trend-line resistance that was in place since the metal’s 2011 highs. Conspicuously absent from this long position has been a corresponding long position in silver or any…...

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Basic Materials, Commodities, etc. Are Not the Best Way to Play a China Resurgence

Basic Materials, Commodities, etc. Are Not the Best Way to Play a China Resurgence

Much has been made of the waves China made overnight with talk of incremental stimulus measures. The SSEC rallied nearly 4% on that news. However, we would caution anyone looking to play any resurgence in China against using the playbook…

Case for Airlines Out-Performing Continues to Build

All the way back on May 30 we highlighted the emerging case for Airlines sustainably out-performing the SPX. We didn’t take a strong, high conviction stance on this belief, but merely stated the “possibility” for this happening was becoming stronger. At…

Can Gold Now Target $3,000 With Miners Out-Performing on the Ride Up?

Back in the saddle, finally. I apologize for being away so long. Regardless, prior to stepping away, I had begun to shift our focus toward metals and away from equities with the thought being that the best trading opportunities were…...

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Given Their Tight Correlation, Could Weakness in Lumber Prices Drag Housing Stocks Lower Too?

During the week of 8/18/12 lumber prices gapped open to start the week ~275 bps higher and at the time, were already up an astounding 38% YoY. Lumber is typically a rather subdued commodity so we thought the gap higher…...

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