Trading Blog: TnT Group

I receive Bill Gross’ Investment Outlook in my email every time he comes out with a new one on Pimco’s website. The newest one he put out is an amazing piece on his thoughts about numerous topics including Americans blindness towards the ever increasing deficit, the ultimate destruction of our future generations due to our selfish spending, and how we do not realize the effects of a lower dollar on our wealth.

Click on the link below to see the entire article.

http://www.pimco.com/Pages/OffWithOurHeads.aspx

Bill Gross is very forthright in his views. Brian and I have had many conversations about the exact notion Bill Gross is explaining when he goes into the fact that we think we are all richer when the stock market goes up by 10% but the dollar is depreciating at the same time, basically wiping out that appreciation in the stock market.

People (because it is not that visible to most) tend to forget that when the dollar goes down we are losing wealth and purchasing power. Because we got into the mess of becoming much more of a service country instead of  the manufacturing country we once were we need to import most of our items which adds to the problem.

I am glad someone, especially someone with such a strong name as Bill Gross, came out and said our future is in trouble. Everyone wants to get out of this mess right now, including Washington, because it does not look good on them if we are in this for a while. No one is taking into account the absolute shit storm we are creating for future generations. Trillions of dollars in the hole is going to take its toll, and it is going to to hit hard at some point.  If not now, then our children and possibly their children will.

I am moving to Canada…

Good morning all. I hit on this a litle bit in my webcast. I wanted to go a little more in depth about it though. When I left for vacation over the holidays I left a gold and S&P market that seemed to be somewhat correlated. To say it was a great correlation would be an absolute lie. However it seemed like gold was being traded solely as part of the commodity basket and was rising with oil, copper, rubber, etc which was also followed slowly but surely by equities and the free money that was being pumped into them.

Now after my first day back from vacation and stepping back into these markets it seemed as if there was a definite change of scenery. Overnight gold was getting hit harder than Brett Favre’s head on the frozen field in Minnesota while equities, continuing there impressive day from yesterday, gradually rose higher (as I type S&P 500 Minis are up 4.25 trading 1269.50 while gold is down 14.7 trading 1408.2). This was not a small divergence from what had been happening before I left. This was a farely large change of thought. Are people or the markets now thinking, more than we have in a while, that the economy may be on track?

Below is a daily chart showing the somewhat correlated gold and S&P markets and the slight divergence over the last few days.

The overnight session really made me think that way. We had a ton of risk on trading happening. Minis up 4.25, euro trading up 30 some pips, yen getting hit farely hard down 87 pips, debt (both US and European) down a good amount, and gold getting clobbered. Oil had a tough time doing anything overnight. I understand it. Do they want to rally it because of equities rallying and a slight sell off in the dollar or is it confused because gold is getting pounded. It eventually rallied slightly, as it should if the markets are showing signs of adding risk and the outlook being somewhat positive.

Below is a 5 minute  chart of last night session and the distinctive inverse relationship of gold and Minis.

I am not coming out and saying that our economy is back on track and let the jobs rain down from the heavens. I still whole heartedly believe we are nowhere near where we need to be. My point is to keep an eye out for this inverse type relationship as it will tell a story as to risk on or risk off trade. It is hard to deny how these markets moved last night and is something to pay close attention to moving forward into this new year.

Today was a day that seemed orderly and slow.  It seemed like a yawner compared to most recent days….. But in the reality of it, we did make some moves.

In the overall picture it was a day or corrections from Friday.  I was not here on Friday, because I was licking my wounds from Thursday.  But we corrected most of the debt and equity move.

Again…. I can not stress the amount of importance on the risk currency spreads and out rights.  I believe that these currency moves are what is giving us these momentum moves.

As long as this Euro/Yen stays below 1000 and Canadian Currency stays below 95.50……. Just stay short equities and long debt.  I know I am probably sounding like a broken record every Monday…… But it is what it is.

As for my trading….. The market has licked me as a scalper.  It has put another local click trader in it’s hopper.  The numbers are scary out there.  I just talked with some exchange heads, and we are pushing over 75% automation in all products.  I have come to the realization that you can not react and click in these markets anymore.  I feel like I am one of the last cowboys standing…. But I need to move on with the TnT Group business plan.  We are being tremendously successful with our automated prop business, our own automation, and our long term trading.  I am going to focus more on the long term trading.  Today was my first day doing it 100% and we had great success.

This type of trading is the only way to survive in my eyes….. It is definitely a lot less stressful and a lot more relaxing.

In no way am I happy about this change in my career.  But I think it is the only way to go to continue my career.  I do not want to be another mounted head on the automated trader wall. 

IF YOU CAN’T BEAT THEM…….. JOIN THEM!!!!!!

Good luck and happy trading……. Remember no drinking and trading.

Spyder here,

Mark is on vacation for the next few weeks so I will be chiming in for the days he usually writes on the markets.

Overnight seemed to look pretty tame and stayed the same early into the morning. Things seemed to really pick up around 7:00 however. To me it felt as if it was a pretty volatile session.  Jobless Claims came out +473K which was better than the expected +490K  with Continuing Claims coming at at 4456K after an expected 4495K. Now these numbers came out better than expected which the markets took positively, rallying equities to new highs. However, one of the traders that came on CNBC made a very valid point; these economists are beginning to realize the negativity within our economy and are lowering their expectations on these numbers. So a number, such as this Jobless Claims, which beat expectations, it may solely be because of the lowered expectations in the surveys that are given. Markets may have taken that to heart as equities came off the rest of the morning. S&P Minis as I am typing down 2 dollars on the day.

Taking a look at the commodity markets we had a big move up in copper even with the weakness in equities.  Oil, which once again seems to have a mind of its own most of the time, kept with that MO again today. Seemed weak when the equities were on the highs. When equities came off and went negative oil seemed to be strong. Ultimately you can make money in that market but its all about timing and if you are in it too soon you are as good as dead.

I think looking at the bigger picture you still need to be short equities. One of the risk currencies, the New Zealand Kiwi, has stayed below a daily trend and broken the 6996 level in which it needed to stay above to keep the trend higher.

With that being lower, as shown below, and the Euro/Yen Cross at the level it is at, as Brian has talked about, I think that longer term play is just to be short equities. Not to mention the unstopaBONDS where they are at!

Good luck trading!

Justin’s market overview for Wednesday….

All eyes continued to focus on the yen today. Whispers of a Japanese intervention sent the yen tumbling overnight. With nothing imminent, we saw the yen grind all the way back in the morning.

Unexpectedly, German IFO business sentiment rose to 3 yr. highs. Whereas U.S. durable goods released a number lower than forecasts. In addition, new home sales in the U.S. recorded record lows. Looks like the storm clouds in Europe have shifted over to the United States. I wouldn’t argue with anyone who would want to be short U.S. indexes against the European equivalent.

The rubber band is being stretched right now. When will it snap?

levels i am looking at……

short 1054 then 1075 with a final short at 1096 in the s&p minis. above there,  i am done trading from the short side.

the downside looks ugly in the minis, with a possible hiccup at 1017.5 to stop the bleeding.

long 13517 and 13500 in the u.s. 30 yr. bonds

long 12511 in the u.s. 10 yr. notes

long 116 58 in the yen

It’s not a question of enough, pal. It’s a zero sum game, somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred from one perception to another. – Gordon Gekko

This is Brian Tehako giving you my daily blog on the market.

I want to Thank Andy Turner for taking over my blog yesterday.  His blog was short and sweet…. But right to the point that leads right into my blog

The EURO/ YEN.  Holy crap did it get hammered overnight and continued through the early morning.  Being a macro trader I believe in the movement in money moves all markets.  This shift of money is unreal in the Euro/Yen.  In my trading career I have not seen the Euro/Yen in these areas it made this morning.

Yesterdays settle was 912 in the Euro/Yen.  It made a low today of 646.  With these levels here and we did make a nice bounce back above 800, but these equity markets could see a 10% drop easy, 20% probable, and maybe even back to our lows from 09/10.  I know this seems crazy…… But I still believe that the currency moves started the FLASH CRASH….. If  so……. We will BREAK HARD!!!

One thing I also noticed today that was very strange was the metal sectors.  Silver was really strong on the bounce in equities.  Silver was strong, then Gold, and Copper was really weak.  Keep one eye on that Silver in these moves…. Gold should stay stronger…. If it doesn’t, you may want to start bottom feeding on these equities.  It happened today and worked.

EXISTING HOME SALES……….. OHHHHHHH BOY…… IT WAS BAD!!!!!

We were looking for 4.65M and -13.4%.  It came out 3.83M and -27.2%.  You cant get much worse(15 year lows).  Equities hammered and debt continued it’s extreme BULL market.

Richmond Fed came out suprisingly a little better.  We were looking for 8, and it came out at 11.  That took me for a little bit of a surprise, but it is such a small number.

Going into the close today:

DON’T BUCK THE TREND.

Stay short equities

Stay long debt

THE TREND IS YOUR FRIEND.

Check out my live spot today on Fox Business News around 2:10 Central Time.

Remember…… No drinking and Trading!!!

justin here…here is the summary for wednesday’s trading day.

on a light economic news day, we saw more of the same in the debt futures, new contract highs. oil dropped today to its lowest level on an increase in U.S. supply. the oil inventory number came out a little mixed which caused a slight bounce off of its lows. we saw pressure on the commodities throughout the morning and with it a drop in equity indexes.

levels i like for tomorrow

long 13226 in the 30 yr bonds.

long 12508 in the 10 yr notes.

long 7261 in the oil,  short 7694

long 12751 in the euro

To trace something unknown back to something known is alleviating, soothing, gratifying and gives moreover a feeling of power. Danger, disquiet, anxiety attend the unknown – the first instinct is to eliminate these distressing states. First principle: any explanation is better than none… The cause-creating drive is thus conditioned and excited by the feeling of fear ……. Friedrich Nietzsche

Good Afternoon…….. Time for Brian Tehako’s viewpoint on the market.

TODAY WAS NO FUN!!!!

Today I saw the curve being very sensitive to the dollar.  I know some days this works and some days it doesn’t… But today was sick how it worked.  But no matter if they wanted to buy the curve or sell the curve, the market direction in the debt market is up.  This rally is getting real crazy.  WHO WANTS THESE RATES?

I do not have a problem if the debt wants to rally because the equities are getting the beatdown they deserve, but the things rallied today.  Not only did they rally today, but the good old USA stocks rallied stronger while the dollar is getting put in the woodshed out back.  This stuff confuses me.

So today the dollar goes down……. Buy debt (OK, I can see that) , Buy commodities (Maybe, but even if debt is going up), Buy equities (COME ON PEOPLE).

HOW CAN EVERYTHING IN THE WORLD GO UP????????  WHERE DOES THIS MONEY COME FROM?????

I think the equities are a short…….. I am short, I will stay short, and I may even get shorter!!!!

On the currency front…….. I think this is a risk market kids…….. Watch the Euro/Yen….. It’s your DADDY!!!!

Have a great trading weeek……. Tomorrow is a big number day……. Mr. Turner will update you on all those numbers.  Today we had nothing even worth talking about.

Remember….. No drinking and trading.

This is Justin and I will be filling in today on the blog. Today we saw some of the same things as we did as yesterday (low volumes). Needless to say traders were being cautious in front of today’s rate decision. Stock markets did get hit a bit after a negative Non-Farm productivity report.  U.S. curves were weak all morning. Prior to the rate decision, we did manage to see a September contract high in the 30 yr. bonds at 12926.

And the FOMC decision is……..UNCHANGED!!! Fed stated that the recovery was more modest than expected. In the near term rates will stay exceptionally low. Debt markets and equity markets took this as a positive and both ripped higher. We continued to make new contract highs in the debt futures and equity indexes held their bid. The U.S. dollar was the one casualty of the fed decision. George Washington took back all the gains from the three day rally.

Don’t stand in the way of a runaway train!

Greetings all! My name is Justin Diamond and I will be posting the market events each Wednesday.

The dollar sell off yesterday was short lived. We held a small support at 8059 and basically steamrolled higher all morning.  Gold ripped higher as well off of recovery concerns. In my mind, something has to give here. With the dollar rallying, I have to believe that gold will come off at some point. I guess we will have to wait and see.

The U.S. treasuries got hit throughout the morning. That down move may have been triggered by a strong Canadian dollar as well as the Japanese yen getting a beat down.  A move above 9778 in the Canadian dollar created more energy to the upside.

The stock markets continued its death grind higher with a positive ADP employment change and ISM.

Trades I am eyeing tomorrow……

Long  US 30 yrs @ 12719

Long US 10 yrs @ 12314

Long S&P minis @ 1105

Long Eurostoxx @ 2757