Basement Macro isn’t a platform to engage in political jousting. I’m interested in finding opportunities for investment/trading profits, pure and simple! So put your political persuasions aside and let’s try to make some money! As I have consistently opined – whether you love him or hate him, Donald Trump isn’t going anywhere! In fact, I still believe he’ll beat out Clinton – […]
Today at 8:30am we’re set to receive a data deluge – including CPI, building permits and housing starts, that will make or break the core thesis for my two largest trades: short Gold and short housing. Short Gold is a contrarian trade, based on the market’s unidirectional positioning and my belief that markets are missing the boat entirely […]
NFP came in weak, as expected. On the release, $GC1! spiked, $DX1! dove and $ES1! tanked. Again, all par for expectations. That said, no sooner than 6 minutes after the release, $DX1! was already trading higher than pre-NFP. Could that be a signal of capitulation on the bearish dollar trade? Yes, that’s a gutsy […]
$DATA has a recent history of massively underpricing implied volatility! Heading into the last six earnings reports, $DATA options underpriced the next day move by an average of 50%! Talk about buying volatility at a discount! Right now, $DATA options are pricing in a 13% move, down from a steady 18% move all week. I jumped into […]
Despite lower raw material costs – for nearly all of 2016, housing (via $ITB and $XHB) has consistently underperformed the broader S&P 500. Year-to-date, housing related stocks ($XHB) are down 3.4% and homebuilders ($ITB) are down 3.0%. Is this weakness set to continue? The data says ‘yes!’ Demand is rolling over as yields are backing up and while supply […]
Sometimes, in the market, I get a weird feeling, where something just seems off. Today was one of those days. Gold’s price action just seemed off. I like to use correlations between different asset classes to help shape a narrative for how the market is trading. While the longer duration correlation data fails to support a “risk-on”/”risk-off” […]
Just as I predicted, OPEC is not and never planned to cut production. It’s all political theatre and tape-bomb chaos! Oil will continue to head lower and as it does, we’ll continue to see fear grow about US banks’ exposure to energy defaults. Naimi reiterated Saudi’s strategy again yesterday in Houston: choking off high-cost producers […]
Respect, but don’t buy production cut rumors. Add to shorts Respect, but don’t buy these production cut rumors. In short, nothing has changed on the macro supply/demand front. If anything, the supply glut has worsened this week with Iran, Saudi, and Abu Dhabi having confirmed production increases. Furthermore, the only countries that are actually lobbying […]
The Chinese currency situation can be boiled down to a few bullets: Concerns about the trajectory of Chinese economic growth Fears of a large scale devaluation waiting in the wings Capital is fleeing from the country at an alarming rate Yuan value is weakening due to all three above PBOC is spending nearly $800bn a […]
I like biotech stocks because of their asymmetrical risk and volatility. $SRPT – Biotech maker of, among other things, an experimental treatment for Duchenne Muscular Dystrophy (DMD). In short, a frameshift mutation on the X chromosome causes the disease, characterized by muscle degeneration and premature death in boys, usually before their 25th birthday. SRPT’s treatment, Eteplirsen, triggers excision of exon 51 […]
