WOW...Bonds are hot....The bond bull market starter 3.04%

[Aman A.K.A. Ahamburger]

Mar 14, 2014 15:17:34 GMT -5 bimetalaupt said:

A+++,

WELL, Clearly the USA is the last super power standing. Putin will be an actor that was looking for a leading role.  He is the richest man in the world so he has the $$$$$ to buy off Germany.

Have a great week-end.  Kash is KING! Just could not pull the trigger.

God Bless you and yours,

Bruce  

B,

I was was working some math.  Very high probability still that China and UsA working together to build a new world. They may have empty places, but when the bubble goes pop, they can give away properties for fighting in the war. Transferable, of course.  

 Later,

A+++

[Aman A.K.A. Ahamburger]

Feb 9, 2014 23:11:26 GMT -5 bimetalaupt said:

A+++,
 Also the relationship of interest to DJIA has tighten!!..Raise in interest could be a key to the next bear market...

BiMetalAuPt...

t10 year-Note  interest to DJIA = 0.9097869251193
t30 year interest to DJIA = 0.89787904611715
data from Friday Feb 6,2014...from the very dynamic MMXV-Friday Beta

B, 

Isn't that what Yellen was talking about today? 

Great call, as usual!

God Bless,

[bimetalaupt]

Feb 7, 2014 16:55:24 GMT -5 bimetalaupt said:

Feb 7, 2014 13:35:50 GMT -5 Aman A.K.A. Ahamburger said:

Yep bonds were hot, great call b the brain, as usual.

Investors Shift Record Amounts From U.S. Stocks to Bonds (2)

Confirmation today that GDP will remain muted in the US. Talk about getting excited for something that isn't going to happen. 2% on the 10 and what, 3.5% on the 30 year means low rates for spring mortgages while tapering continues.. What was that correlation percentage we have been talking about with the DoW and rates again?

I'm not as bearish as this guy, but it seems like the math is saying it all lines up. The emerging markets are now 40% of global growth, about twice what they were 15 years ago. Stall to slow still.

In a while,

A+++,
Thank-you for your kind words!!!Getting wild..
We sold out the 10Y...Investing in Major efficiency power = IBM!!!  Watson..Cloud and PL1.
BOUGHT FIRST SHARE 53 YEARS AGO.   
3% of the MBA are looking for a Job....97% are forming an LLC or INC!!!!ART is hot.....LOVE PICASSO!!!ORGANIC FOOD...WORM,INC!!  ORGANIC MULE DEER ELK CROSS.....
Just a thought,
BiMetelAuPt

Addendum.......
DJIA increase in VAR...$250.4760790466 per week!!! sensitivity to 10 year t-note  to  0.9102904002895 interest!!!!!

What about growth at any cost PEG of C at 0.5 vs FB of 3?  At 10 Year..not 5 year

A++++,

T-BONDS ARE HOT AND THE DJIA &DJTM NOT!! AGAIN. INFLATION UP AND BONDS ARE ONE FIRE!!HOT!!!HOT!!

Just a thought,

BiMetalAuPt

Treasury Yield 30 Years (^TYX)......................2.47 Down....................0.04(1.71%) 2:59PM EDT
Prev Close:.................................................2.51
Open:........................................................2.50
Day's Range:................................................2.46....................... 2.51
52wk Range:..............................................2.23........................... 3.65

CBOE Interest Rate 10 Year T No (^TNX).................. 1.88 Down............................ 0.04(1.93%) 2:59PM EDT

[Aman A.K.A. Ahamburger]

You are too kind

I would say that's called strength in the weakness! The rest of the world is descending into chaos and that is going to hurt 50% of DJIA & S&P's profits. On the bright side, the free world will follow and that should help the bottom line.

What's 70% consumer spending? Asks the 99%. How about we ask China who is desperately trying to - but a depression and a war away from obtaining - that very goal.

God Bless,

[tyfighter3]

20% correction in the DOW = 14500

[bimetalaupt]

Mar 27, 2015 0:45:56 GMT -5 tyfighter3 said:

20% correction in the DOW = 14500

alpha Black Swan event study
STRESS TEST STUDY 03/20/15
RIDK..................................................................... 5986.801875
15 MONTH DJIA PROJECTION.................................. 22367.6485585496
UPSIDE.................................................................. 4239.99855854963
DJIA UPSIDE/RISK...................................................... 70.8224298562%
djia risk/return........................................................... 1.4119820543165
Highest risk DJIA..................................................16380.8466835496
PROF/LOSS PER$1.00................................................-$0.29178
OK, this is last Friday, will rework after M3 is posted for this week!!  four know Black Swans are in the air!!

Just a thought,

BiMetalAuPt

[bimetalaupt]

alpha Black Swan event study
STRESS TEST STUDY 03/31/15
RIDK............................................................ 5657.2425
15 MONTH DJIA PROJECTION......................... 21874.8300344285
UPSIDE........................................................ 4098.71003442848
DJIA UPSIDE/RISK .........................................72.4506689333%
djia risk/return............................................... 1.3802495059373
Highest risk DJIA............................................ 16217.5875344285
PROF/LOSS PER$1.00.......................................... -$0.27549

Again we have a saddle market ....huge gainers vs. huge losers.... There may be some gains in open puts and buy out of the money calls.

This is called a saddle.  I like the Expert 50/50 system .  I have been building cash reserves for equity purchases.  My addition in the market was DUK with a beta of 0.12. 

Just a thought,  make my drink coffee.. This is getting boring!!!

BiMetalAuPt

PS: FROM FRED ST. LOUIS FEDERAL RESERVE BANK

The FRED® Blog


The vanishing negative saving rate

Posted on May 1, 2014


One data series that’s been subject to frequent revision, and in the past frequent inclusion in the news, is the personal saving rate. In October 2007, our Liber8 publication (a newsletter for librarians) included an explanation of the negative U.S. saving rate.* To make a long story short, that article and others from that time noted that it generally isn’t wise to spend more than your income. However, if you look at the current saving rate, you see the graph never goes below zero. It even seems to stay above 2%. What’s up with that? Well, revisions to the data.

Below is a graph of changes in the data, comparing the current data with the data available in September 2007.

fredblog.stlouisfed.org/2014/05/the-vanishing-negative-savings-rate/

In a piece from last December, I assumed an earnings growth rate of 3.8% over the coming decade, the historical average according to Robert Shiller, in forecasting 2025 earnings for the S&P 500 of 156.76. Apply an 8.23 p/e (forecast by the model) and you get a price level for the index of 1,290.

However, Cliff Asness has shown that earnings are very highly correlated with the level of inflation. With 10-year TIPS now implying inflation of less than 2% we can make a new earnings forecast using that as our assumed level of earnings growth. In this case, we arrive at a 2025 earnings number of 131.75. Applying an 8.23 multiple we get a price level for the index of 1,084. This would represent a decline of about 50% over the coming decade, a truly horrific prospect.

Ned Davis Research has also studied this relationship and come to a similar conclusion. The chart below comes from Davis’ terrific book, “Being Right or Making Money.”

[bimetalaupt]

The case for the Bar-Bell...Sell the open market stock like DJIA and buy DJUA and Calls for the S&P 500 or Minifutures for DJIA futures with the thought they might run up to 22013.5505629725 .  High Risk but high possible return??  Hedge with Puts on DJIA??

MMXVI-ALPHA Black Swan event study
STRESS TEST STUDY............................ 04/07/15
RIDK..................................................5750.33625
15 MONTH DJIA PROJECTION................. 22013.5505629725
UPSIDE ................................................4138.13056297249
DJIA UPSIDE/RISK..................................... 71.9632797642%
djia risk/return........................................... 1.3895975882089
Highest risk DJIA.................................... 16263.2143129725
PROF/LOSS PER$1.00.............................. -$0.28037

Just a thought from MMXVI-Alpha as before; only a thought from the output projections of MMXVI-Alpha Black Swan Event Study.

BiMetalAuPt

 

From BOA

BANK OF AMERICA: We're heading for an earnings recession

The decline in earnings year-on-year is considered an "earnings recession."

Dan Suzuki and the equity strategy team at Bank of America Merrill Lynch have trimmed their earnings per share expectations for the S&P 500 to $117.50 from $119.50, implying the first year of negative earnings-per-share growth since 2009.

BAML writes:

The main drivers of the EPS contraction are the 50% drop in crude oil prices and the 20% strengthening of the dollar since last June. Excluding these two factors, we estimate that EPS growth would be close to 10% this year vs. 8% last year. We have also revised our 2016 EPS forecast from $128 to $126 (-1.6%).

Overall, BAML expects that the hit to overall growth from the decline in oil prices and the rise of the US dollar will not get much worse, and the firm sees positive year-on-year earnings growth resuming by the fourth quarter.

Borrowing a word from Fed Chair Janet Yellen, BAML writes that it expects this earnings recession will be "transient."

As for why the strong dollar has dinged earnings?

BAML estimates that every 10% increase in the value of the dollar results in a $3 to $4 headwind to S&P 500 earnings, though this is often offset by a multiple expansion — or stocks increasing in value relative to their earnings per share.

"In the last two periods of dollar strength (1978-85, 1995-02), which each included at least one recession, PE multiples expanded by 39% and 52% (3 and 8 multiple points), respectively," BAML notes. "Similarly, in this cycle the S&P 500 PE multiples have continued to rise amid the years of significant dollar strength."

Late last month, we highlighted comments from Morgan Stanley's Adam Parker, who noted that there had been just three instances since 1974 in which a decline in earnings was not associated with a recession.

So we'll see what happens this time.


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[Aman A.K.A. Ahamburger]

the .. Hows about we start somewhere a bit more simple? Bond fund ETF and a DJIA? Aim for 3.04% per trade playing short term 7-10 day volatility? Cut it at 3.04% on more extreme swings to cover the shorter swings that might catch ya at 1%

Like you said, earnings season will be fun!

[bimetalaupt]

Apr 9, 2015 1:02:54 GMT -5 Aman A.K.A. Ahamburger said:

the .. Hows about we start somewhere a bit more simple? Bond fund ETF and a DJIA? Aim for 3.04% per trade playing short term 7-10 day volatility? Cut it at 3.04% on more extreme swings to cover the shorter swings that might catch ya at 1%

Like you said, earnings season will be fun!

A++++,

BONDS ARE THE HOUSE YOU LIVE IN: MY BOND HOLDING WERE GREAT IN 2008-2009.   Barbell holding just like PIMCO's new president.

THE 1% CALL WAS AGAINED REPEATED BY GUY ON CNBC TODAY AS WELL AS PARITY FOR THE $$$$ AND EURO ( 1$=1EURO).

Just a thought,

BiMetalAuPt

[Aman A.K.A. Ahamburger]

,

Yes, I did see the barbell system mentioned in the pimco article. Bonds are the house to live in so a big ETF must be the balance to a DJIA ETF in the embrace the volatility system.. 4, 3% trades and we are talking 12%...

Better take those on par Euros and have a good trip before Europe has some real problems to deal with.

God bless.

[bimetalaupt]

A++++,

Yes, hot as in M3 and the t-30YEAR T-BOND!!

Treasury Yield 30 Years (^TYX) -Chicago Options 2.52 Down 0.03(1.33%) 2:14PM EDT

AN D T-NOTES 10 YEAR
CBOE Interest Rate 10 Year T No (^TNX) -1.86 Down 0.02(1.06%) 2:17PM EDT ;Drisk it with brisket and white wine bubble made from red grapes

IT IS A RISK OFF DAY..

Just a thought,

BiMetalAuPt

P.S.;

Bond/Utility Divergence a Warning Sign…for the S&P 500?

Given their relatively high yields, utility stocks have long been thought of as proxies, or at least competition, for bonds. And while that relationship is often overplayed (utility stocks are first and foremost, stocks), there is some credence to the notion. Since 1970, there is a 26% positive correlation in 2-month returns between 10-Year Treasuries and the Dow Jones Utility Average (DJUA). Although that’s not a hugely positive correlation, contrasted against the 10-Year vs. S&P 500 correlation which is slightly negative over that time, you can see there appears to be some influence from bonds on the behavior of utilities.

For that reason, while the two markets can go in opposite directions at times, it is fairly rare to see them diverge to the extent that they have recently. While bonds are at 2-month highs, utility stocks have actually lost ground over the past 2 months. As of a few days ago, the DJUA was actually down more than 5% over the previous 2 months. That wide of a divergence has only been triggered on roughly 5% of all rolling 2-month periods since 1970. Adding the qualifier that the S&P 500 is also trading within 5% of its 52-week high, the scenario is even more rare, having occurred on just 87 days (or 0.7% of the time) since 1970. (More on the S&P 500 below.)

Check out the decline in DUK over the last 90 days..Buy from yield of 4.2%

Utility stocks did not persist in their negative divergence, instead scoring slightly above-average gains across all time frames. However, again the returns were not too different than normal.

Now for the S&P 500. We introduced the qualifier that the S&P 500 be trading near its 52-week high for a few reasons. One reason is just because it describes our current situation. We also wanted to test a potential theory. Perhaps the scenario whereby utility stocks begin to lag bonds near stock market highs describes a situation where stock investors are becoming more risk-averse, on the margin…i.e., they would rather hold bonds than utility stocks as bond proxies. The theory, or at least the by-product of such a theory, may have merit judging by the performance of the S&P 500 going forward. “Risk-aversion” was certainly evident over the subsequent period.

[Aman A.K.A. Ahamburger]

, ,

And since Monday?

DUK is looking like a great, great point.

So what are we looking at here then? Risk off days that see TYX down when MMX says risk off is a buy??

[bimetalaupt]

CBOE Interest Rate 10 Year T No (^TNX) -Chicago Options  Watchlist


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