Trading Blog: TnT Group

Pretty interesting video. This was posted on youtube about a month ago, so many of you may have seen it, but for those that haven’t it is quite interesting. The video may be a bit over the top, however we have seen what can happen in these markets and with everything that the is happening in the world and what our government is doing these results are  not out of the realm of possibility.

Hello everyone. My trading day is done. Nearly got stopped out overnight by being long EuroStoxx. First time in a while I was not short and I thought I had every reason to be long and that is when they hit them. Like I said in my webcast it felt as if there was just a big Spu/Stoxx buyer overnight from around 2:00 am to 3:00. Got my day all back and actually got up a little coin and the gave it back and finished the day a scratch. I’ll take it.

Something that has interested all of us here at TnT Group, especially Brian, John, and Andy since they are trading silver recently is the JP Morgan short silver story. A lot has been made about the bank and their direct involvement in the silver market. They have been sued for supposedly manipulating the market and bragging about it at the same time, http://www.businessinsider.com/angry-investor-jpmorgan-and-hsbc-used-secret-signals-to-manipulate-the-silver-market-and-bragged-about-it-2010-10, and are now under scrutiny for loading up on a large short position.

Last night and into this morning it is reported that JP Morgan has unwound a large portion of that position,http://www.businessinsider.com/jpmorgan-unwinds-silver-position-2010-12. The feel that most people have is that JP Morgan unwound due to incredible losses because of the constant bid in the silver market or that their was outside pressure to unload due to skeptics and unwanted scrutiny.

My beliefs tend to sway towards JP Morgan having that position hedged up somewhere or another. I find it hard to believe that they were naked short such a disgustingly large position. I also tend to believe that JP Morgan Chase is one of the better banks after we went through the financial crisis. That is where my money is kept and I believe that Jamie Dimon is a pretty smart character and I want to believe that they would not go into such a large position not hedged up somewhere.

To sum that up, I hope they are hedged up. But on the contrary to that point; what the  hell are they doing trading anyways! I thought this was one of the reasons Mr.Dodd and  Mr. Frank got together and wrote up that large document. A banks job is too hold  people’s money, loan money out at a percentage, and survive that way. Growing up as a  kid and learning what a bank was my mom and teachers never said that their job was too  put on 40% of the total Silver contracts that may or may not be hedged up. If I would  have known that, and even as a kid, I may just have kept my money in my piggy bank.

Banks and policy makers in Washington need to ultimately get their noses out of the markets. Banks have no business in them as that is not their job. Policy makers have no business in them as that is the SEC’s job. Trader’s trade because they see value or believe things are out of whack. Price discovery and value seem to be diminishing quickly as now value to banks are now quarter ticks and milliseconds. Let traders balance the markets out and decide where value is. That is something that the markets and the world is without right now. Maybe one day, and hopefully soon, WikiLeaks will one day be allowed to share what they have and we will finally all find out what the big banks and the government are all up too. I know I sound like a conspiracy theorists but they way the dominoes have fell over the last few years most normal people, I think, tend to fall in the same direction.

What a fun week….fun if you enjoy watching the dollar get pummeled and buying equities.

QE is still the talk, throw in a bullish German IFO number and we could see this dollar hold below April lows now, possibly even push the yearly lows. Even though I’ve been toying with long dollars with tight stops all week, I don’t think I can take longer term shots on longs until 78.40 level.  The stock markets continue to like this weak dollar and things have been steady in terms of the “psychological trade” we’ve been seeing.  Dollar down, equities up.  It might make sense to some people, but is it really the right thing to do???  And when will dollar weakness become a concern???

Brian Tehako and Jim Bianco had an interesting Bloomberg interview on Friday afternoon and they brought up that very point.  Might be worth a look if you have the same questions we’re asking.

Some other note worthy stuff that’s been going has been in the Metals.  BUY BUY BUY!  We saw some  strong demand in the Copper market earlier in the week based on low supply numbers and the weakening dollar.  Silver is also hitting 5 year highs.  I will continue to be bullish metals until something big changes, but doubt that will happen anytime soon.

Have a good weekend.