|
So... I have money in GLD calls. GLD isn't really moving up still. On March 16th, there was backwardation in gold.
After doing some research, it seems that there is some sort of potential for gold to go into permanent or very long-term backwardation. This would happen if demand is high but confidence in the fulfillment of futures contracts declined.
So, this led me to looking up futures expiration dates. It looks like contracts expire march 20th. The next date after that isn't until June 19th.
Should I consider selling my calls (even if for a loss) before the end of march 20th, or is this just paranoia? Or, could similar concerns in other people be a reason for the backwardation in the first place?
|
On March 19 2020 09:08 travis wrote:
So... I have money in GLD calls. GLD isn't really moving up still. On March 16th, there was backwardation in gold.
After doing some research, it seems that there is some sort of potential for gold to go into permanent or very long-term backwardation (dollar collapsing). This would happen if demand is high but confidence in the fulfillment of futures contracts declined.
So, this led me to looking up futures expiration dates. It looks like contracts expire march 20th. The next date after that isn't until June 19th.
Should I consider selling my calls (even if for a loss) before the end of march 20th, or is this just paranoia? Or, could similar concerns in other people be a reason for the backwardation in the first place?
I posted this sometime earlier:
https://www.barchart.com/futures/commitment-of-traders/technical-charts/GC*0
It's only updated weekly
You can also look this up, but it's even less actual:
https://www.cftc.gov/dea/futures/deacmxsf.htm
GLD is a heavily manipulated futures market, it's the enemy of fiat. If we follow the 2008 technicals, we'd bottom out somewhere in the 1300-1400 range.
Media says it's dropping because of margin calls, but looking at the large spec. position staying more or less constant, it seems like BS. More likely to be some stressed out swap dealer caught on the wrong foot looking for a way to get out of their shorts amid a physical shortage, and some funds playing along to avoid a disaster.
If we follow the Jan 2017 playbook, the next move higher will start when large spec. is flushed out and swaps reduced their shorts.
I'd pick the 2k8 playbook here. But I can't tell you if tomorrow we'll have at least a recovery move higher.
|
Okay. Now new concerns.
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200317b1.pdf
This says that the fed will loan out money and that *EQUITIES* can be used as collateral.
Doesn't this mean that a company could take out a huge loan using their shares of stock, then buy out shares that individuals own of that stock, and then maybe even take out another loan using *those* shares as collateral?
Then the fed can just sit on those shares for 90 days protecting them against moving down during the pandemic? Essentially freezing the value?
Furthermore, if multiple loans are allowed... couldn't a company repeatedly buy back the shares and then use them as collateral for another loan, artificially driving the price of their own shares up through a series of loans?
|
I think it very likely that legislation changing or outright banning most kinds of buybacks will be taking center stage before long, especially when the airline bailout hits in earnest.
|
On March 19 2020 23:30 travis wrote:Okay. Now new concerns. https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200317b1.pdfThis says that the fed will loan out money and that *EQUITIES* can be used as collateral. Doesn't this mean that a company could take out a huge loan using their shares of stock, then buy out shares that individuals own of that stock, and then maybe even take out another loan using *those* shares as collateral? Then the fed can just sit on those shares for 90 days protecting them against moving down during the pandemic? Essentially freezing the value? Furthermore, if multiple loans are allowed... couldn't a company repeatedly buy back the shares and then use them as collateral for another loan, artificially driving the price of their own shares up through a series of loans?
Fed now accepts stocks as collateral btw. Seems the counterparty has run out of treasuries and mbs. They‘ll buy everything now.
Presumably, with the loans they can be kept from defaulting on high interest, while the fed buys them up. When they default, the Fed will have a big stake in them, and the loan will be erased. If 2008 was any lesson, that should be the moment the dollar stops its onslaught.
In other words, the weaker links of the US economy are being nationalized, not under the united states government, but under the Fed.
You, and maybe even "we", are going into socialism under Trump. Fun times.
This chart is important because the last time we had such an high in the gold to oil ratio was:
https://www.investopedia.com/articles/economics/08/1970-stagflation.asp#:~:text=This is known as cost-push inflation.&text=In reality, the 1970s was,inline with Keynesian economic theory.
|
vivax you mentioned GLD being manipulated before. can you elaborate on how it is manipulated?
|
United States41995 Posts
On March 19 2020 23:30 travis wrote:Okay. Now new concerns. https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200317b1.pdfThis says that the fed will loan out money and that *EQUITIES* can be used as collateral. Doesn't this mean that a company could take out a huge loan using their shares of stock, then buy out shares that individuals own of that stock, and then maybe even take out another loan using *those* shares as collateral? Then the fed can just sit on those shares for 90 days protecting them against moving down during the pandemic? Essentially freezing the value? Furthermore, if multiple loans are allowed... couldn't a company repeatedly buy back the shares and then use them as collateral for another loan, artificially driving the price of their own shares up through a series of loans?
This was always a concern with Trump and his narcissistic obsession with stock valuations. I’d assume that he asks why he can’t just use the treasury to buy the market back up to old valuations nightly and people in government have consistently failed to stop him doing that kind of thing.
|
On March 20 2020 00:49 travis wrote:
vivax you mentioned GLD being manipulated before. can you elaborate on how it is manipulated?
Jim Rickards explains it better in his books. He's an ex wall street lawyer who also worked with the government to investigate airline short positions placed before 9/11. Super interesting read.
Essentially though, all that you need to suppress the gold price is a money printer and a systemically relevant issuer for gold futures.
The long term endgame is a central bank monopoly on gold, so the working suckers can't be independent.
Gold confiscation could be ahead of the road, but hopefully they'll print a decent price for it.
Some news from fintwit:
+ Show Spoiler +
Not necessarily a bottom, they aren't blasting all their
reserves into them at once. But maybe starting to average down.
UH. This could be huge at the current vix levels.
monster tide 2 in dxy and equities coming?
https://twitter.com/6_Figure_Invest/status/1239956224126283777?s=20
|
United States41995 Posts
On March 19 2020 07:23 KwarK wrote:Show nested quote +On March 19 2020 06:54 IyMoon wrote:On March 19 2020 06:28 Vivax wrote:On March 19 2020 06:25 IyMoon wrote:On March 19 2020 06:23 Vivax wrote:On March 19 2020 06:18 IyMoon wrote:
UWT is at 27 cents a share.... is it a good idea to just kinda dump 3k into it and pick up 10k shares? Crude isnt going to be down forever I wouldn't do that. Better off storing fuel in the garage/shed for that amount tbh. I'm seriously considering it myself. Why not if you don't mind me asking? 4 months ago this ETF was at 40. If I just toss 3k in and wait 2 years on it could either be worth an amazing amount or be maybe.... half? High risk AMAZING reward? Apart from news of liquidation already appearing on stocktwits, so it won't even exist soon any more probably, are you 100% sure that the issuer, Citigroup, is going to get through this unscathed? I don't think Citigroup is going anywhere. You think theres a chance they just shut the ETN down based of the oil wars going on and companies going under? Edit: Kwark said its a strong buy and I respect him from the POL thread so 3k money on fire it is I didn't mean that specific ETF, there are other ETFs out there you can buy too like OILU. UWT may cease to trade soon (though assets would be returned through liquidation, wouldn't be a total loss). I meant that strong in that it's very reasonable to expect oil to go back up in the future and that a leveraged ETF would be a way to take advantage of that.
OILU up 56% today lol.
|
yeah its a goddamn rollercoaster out there
|
On March 20 2020 07:31 farvacola wrote:
yeah its a goddamn rollercoaster out there
Yea, I'm waiting for the next massive dump to take place. I have cash ready to try and ride that roller coaster at least once up, that's all I need. Lol.
edit: I also plan on buying some stocks for my little one that is coming + nieces and nephews. Trying to prepare with some sales if things were to return to a norm at some point.
|
On March 20 2020 07:42 ShoCkeyy wrote:Show nested quote +On March 20 2020 07:31 farvacola wrote:
yeah its a goddamn rollercoaster out there Yea, I'm waiting for the next massive dump to take place. I have cash ready to try and ride that roller coaster at least once up, that's all I need. Lol. edit: I also plan on buying some stocks for my little one that is coming + nieces and nephews. Trying to prepare with some sales if things were to return to a norm at some point.
Might be wise to spend it before those 1k checks arrive at your neighbours doors. But no pressure.
The MSFT dip I bought on 3/9 is up 1.1% today. Talk about bulletproof stocks, I guess the Fed doesn't like a future with linux OS.
Although judging by the chart it's the euro crashing that made it go up for me.
Bad news rolling in: One Swiss refinery just raised the premium on gold by 20%.
They have 4 huge ones in there, so it's rare to see this.
OILU up 56% today lol.
Good call, gratz!
Back to 24? Whoops
https://www.reuters.com/article/us-health-coronavirus-interventions/dollar-rampage-spurs-fx-interventions-speculation-of-big-g7-move-idUSKBN2163UT
Outcry for FX intervention in reuters now.
Sold my eurusd puts.
If the dollar gets weakened through intervention now, we should see the gold/oil ratio drop. One way or the other, I'm betting on the oil way.
+ Show Spoiler +
Whoops. 7 month delay
|
Do you think the hilariously long delay will affect futures? Shouldn't it push futures up, if the delay is longer down the road than the delivery date of the future contract?
|
On March 21 2020 00:57 travis wrote:
Do you think the hilariously long delay will affect futures? Shouldn't it push futures up, if the delay is longer down the road than the delivery date of the future contract?
At the moment I'd say that supply/demand on gold isn't the determining factor, but FX.
Presumably, response of the US to the threat of a rising gold price was to strengthen the dollar, but that shat the bed for other countries, so opec retaliated with a hit to oil prices, and those whose currencies are being devaluated to insane levels like Norway will respond too, because they're like many others an uninvolved third party suffering from this economic exchange of blows.
Down the road though, the Fed is trying to keep the dollar from hurting their own economy, they do that by issuing debt, they're curbing short term demand with long term demand, so eventually, it will get even stronger, and with it the liquidity issues. It's a self-reinforcing mechanism.
The US has more measures in the drawer to escalate here, like refusing to sell oil to countries cooperating with CN and RU.
While Switzerland as the seat of several supranational institutions and powerful banks is going to try to deescalate at first. I wouldn't put it past them to be able to deliver a big blow to the dollar if Trump keeps up his confrontational course.
Needless to say, your prez isn't good at making friends here.
To answer your question, I'd say there'll be a point when gold futures reach absurd levels and will get liquidated to protect issuing banks.
+ Show Spoiler +20.03.2020 / 17:00 Uhr
Von Hans Bentzien
FRANKFURT (Dow Jones)--Die US-Notenbank bemüht sich in Zusammenarbeit mit fünf weiteren Zentralbanken darum, die weltweite Versorgung mit Dollar-Liquidität zu verbessern. Nach Mitteilung der Europäischen Zentralbank (EZB) bieten die Bank of Canada, die Bank of England, die Bank of Japan, die EZB, die US-Notenbank und die Schweizerische Nationalbank ab 23. März jeden Tag einen Dollar-Tender mit siebentägiger Laufzeit an. Die Ergebnisse der Operation werden täglich um 10.50 Uhr veröffentlicht.
Die wöchentlichen Dollar-Tender mit 84-tägiger Laufzeit werden parallel weiterhin angeboten. Deren Ergebnisse werden mittwoch um 10.50 Uhr bekannt gemacht.
Fed is now providing tenders of $-liquidity to ECB, BOJ, BoC, SNB and BoE starting monday.
So this is one step to deescalation, but those who aren't included are entering a world of pain.
|
I've "lost" like 16-17% so far on my fund. Which isn't too bad. Though, I am confused as to why I read so much on the news that people are evacuating on all time lows.
Everyone who has big money is buying buying buying....
|
On March 21 2020 02:04 Jan1997 wrote:
I've "lost" like 16-17% so far on my fund. Which isn't too bad. Though, I am confused as to why I read so much on the news that people are evacuating on all time lows.
Everyone who has big money is buying buying buying....
If the price is dropping then literally the sell orders are outpacing the buy orders. So thats what has been happening for the last month, the sell pressure has been outpacing the buy pressure which has been driving the price down 30% from the highs for the major US indexes. So literally the "money" or "big money" if you want to call it that has been in the selling part of the market, thats why the price had to drop. If big money is equal in both buying and selling, then price stays thesame. If price drops a lot, clearly the pressure is in selling part of the market.
|
|
|
thinkorswim shows 3 really large candles in a row on a daily chart. the wicks are large but nothing like in that image.
the 1minute chart shows some huge spikes for 1minute moves, but still nothing like in the image.
|
On March 21 2020 07:05 travis wrote:
thinkorswim shows 3 really large candles in a row on a daily chart. the wicks are large but nothing like in that image.
the 1minute chart shows some huge spikes for 1minute moves, but still nothing like in the image.
Yeah looks like a false positive at first glance.
But looking at history, the last time something like this happened was in USDCHF on the 1/15/15, when the SNB unpegged their currency from the €.
And the FOREX chart doesn't show a false positive about that.
This might have been a decoupling event by the Norwegian CB. Thought a bit about it, seems unlikely. Large influx of dollars? Would make sense if someone expects the dollar to tank soon.
Possibly not the best source but I like the take.
http://www.munknee.com/which-is-the-worlds-safest-major-currency-youll-be-surprised/
It's also kinda odd that the Brent price is higher than WTI by a high margin.
CoT-chart for gold shows a large downtick in the large spec positions, while "others" bought it up, probably CBs, allowing the shorts to cover a bit.
^ yuge
If I'm reading between the lines correctly, this means there's a credit freeze in their banking systems. Alternatively, Amaz is starting to 'hoard' stock.
|
United States41995 Posts
On March 20 2020 07:26 KwarK wrote:Show nested quote +On March 19 2020 07:23 KwarK wrote:On March 19 2020 06:54 IyMoon wrote:On March 19 2020 06:28 Vivax wrote:On March 19 2020 06:25 IyMoon wrote:On March 19 2020 06:23 Vivax wrote:On March 19 2020 06:18 IyMoon wrote:
UWT is at 27 cents a share.... is it a good idea to just kinda dump 3k into it and pick up 10k shares? Crude isnt going to be down forever I wouldn't do that. Better off storing fuel in the garage/shed for that amount tbh. I'm seriously considering it myself. Why not if you don't mind me asking? 4 months ago this ETF was at 40. If I just toss 3k in and wait 2 years on it could either be worth an amazing amount or be maybe.... half? High risk AMAZING reward? Apart from news of liquidation already appearing on stocktwits, so it won't even exist soon any more probably, are you 100% sure that the issuer, Citigroup, is going to get through this unscathed? I don't think Citigroup is going anywhere. You think theres a chance they just shut the ETN down based of the oil wars going on and companies going under? Edit: Kwark said its a strong buy and I respect him from the POL thread so 3k money on fire it is I didn't mean that specific ETF, there are other ETFs out there you can buy too like OILU. UWT may cease to trade soon (though assets would be returned through liquidation, wouldn't be a total loss). I meant that strong in that it's very reasonable to expect oil to go back up in the future and that a leveraged ETF would be a way to take advantage of that. OILU up 56% today lol.
OILU closing (with share owners getting refunded their share of net assets which should roughly correlate to the share value because it's a commodity index)
https://www.proshares.com/news/proshares_announces_changes_to_etf_lineup_031220.html
|
|
|
|
|
|
EPT![[image loading]](https://pbs.twimg.com/media/ETdOYGZXsAEiCMW?format=jpg&name=medium)
![[image loading]](https://pbs.twimg.com/media/ETfHWOQXgAIYvjq?format=jpg&name=large)
![[image loading]](https://pbs.twimg.com/media/ETjCWX-XgAAEUNW?format=jpg&name=medium)
![[image loading]](https://i.imgur.com/EcmFdsY.png)
