Daily Archives: March 18, 2013

The Penny has Dropped (by Strawberry Blonde)

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After dropping overnight (presumably in response to the bailout conditions of Cyprus), Copper is still trading down near its low of the day. As shown on the Weekly chart below, it has broken below a fairly major uptrend line and both of its 50 and 200 moving averages, is sitting at its Volume Profile POC and lower Bollinger Band, and is just above its lower 1/4 of a longer-term very wide sideways channel.

A drop and hold below today's lows could send price down to 3.20 or lower to 3.00.

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Nickels in Front of the Bulldozer

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Almost all my trading is confined to my hedge fund, but I do have a very tiny (like $5,000) options account I trade on rare occasions for myself when I'm feeling pretty confident about a trade.

My last two trades (pretty much the only ones in months) in the QQQ have both resulted in profits, but good lord, they sure turned south in a big hurry afterwards. You ProphetCharts folks out there should know you can add these text notes, if you're ever interested in marking up charts with comments like this.

I scurried out of my QQQ puts this morning for a nice little profit, but as I'm typing this, they are unchanged on the day!

0318-options

Funny Munny on the Run

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Alice4Excerpted from this week’s edition of Notes From the Rabbit Hole, NFTRH 230:

Funny Munny on the Run

US monetary policy makers have enjoyed a Goldilocks environment since
they began the most intense phase of inflationary monetary policy,
which we will define as post-Operation Twist, beginning in January of
2013.  Goldilocks held sway because of a lag in inflation’s rising cost effects in the transition from economic contraction to economic expansion.

But the expansion (such as it is) was willed into existence by a Fed
sopping up commercial and government bonds (legacy debt) with newly
printed money.  The story goes that this newly printed money will
somehow enter the economy and become accretive to productive economic
activity.  But it will not.

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Scalded Frogs (by Springheel Jack)

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There will be some mystified expressions among European bureaucrats this morning after the blow-up over the EU plan to fund the bailout in Cyprus by appropriating up to 10% of bank balances in that EU member. Their confusion has some cause.

Over the last few years, as government central planners have responded to ever increasing crises (caused in the main by incompetent government central planners) by appropriating ever more powers and employing ever more 'unconventional' methods to avoid facing the consequences of previous mistakes, savers have had to become used to their pension funds being required to be invested in increasingly risky government bonds at very low rates, to centrally set interest rates every year that confiscate and redistribute to borrowers all of their real interest income and some of their (real terms) capital. There has been discussion and approving talk in the press of the possibility that interest rates might go negative, meaning that in addition to losing all of their real interest income, and some of their (real terms) capital every year, savers would also be fined some of their nominal capital per year for not spending their savings on consumption or non-cash assets. 

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