Makes sense. I remain net short. Risk parity funds are blowing up now. Nowhere to hide.

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Ended? Do you see signs that it ended or is it just a beginning? What do
you look at? VIX?  Thanks

Tech Trader continuing to cut both longs and shorts. Exposure now 61% long by 21% short if you exclude the short-term ETF buys from Friday.

Why are you cutting? Do you think a selloff would continue?
My model oddly is buying USD.
Thanks

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Not necessarily bearish, just neutral. It's just not seeing positions it wants to stay in at this time.

Got it. Thanks!

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Good luck. You are buying a very overvalued market but central banks could come and save us. I am scared to be long ahead of FEd and BOJ on 21st.



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Tech Trader appears to be hedging itself by simultaneously shorting two more names $RSG, $LOW (utilities, consumer).

In general, I would think of inaction exactly as just that - inaction.  It
just doesn't see any opportunity but it doesn't mean it's bearish. Tech
Trader is very conservative, so it takes a lot of ideal conditions for it
to want to make a trade.

Thanks for the reply. Fascinated by this AI.

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Maybe because European banks are not in your universe? I had many buy signals on DB and CS back in July. I think today was a short term top. I unloaded because I did not like what ECB did. I am still bullish on them medium term but Fed is a threat near term.



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No they're in the universe, just no signals.

Were you short Gold and miners? That might still work for next few weeks I think.

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No we went long $EGO a couple days ago, which is a gold miner.

Tomorrow is ECB. Expectations are pretty high from equity guys. Bonds are much less optimistic. Given Fed meeting is less of an event (weak U.S. Macro data likely removed Sept hike from the table), tomorrow's ECB is very important. BOJ is not until end of the month.

It is incredible how equities diverged from macro this month. CBs meetings drive price discovery and all market does is re-positioning for CB meetings. In the meantime, economic growth is deteriorating as monetary stimulus is failing to spur growth and inflation. I don't think CBs are ready to give up, hence bond yields are not going to rise and lower growth will have to get priced in equities.


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Market was relieved by weak NFP but it was a wrong reaction. The market should be worried about weak private payrolls. We have service ISM on 6th which would also most likely disappoint.

I see probability of hike at 30% for September with weak economic data and can't really get excited about risk. The probability should be zero like it was back in June post Brexit. Now I want to be short and defensive. Fed would likely try to talk  up hike damaging risk further, ECB would likely disappoint, and Kuroda would be a clown on 4th. I think this market is too dangerous to be long especially high beta but maybe this is why those who are long would get rewarded.
  I am upset about calling weak job report correctly  and not making much money on the right call because of fake reaction today. Why did curve steepen? Ridiculous.Momentum factor only gained 0.17% today also because Oil was up for some stupid reason (Putin opened his mouth). Anyways next week will be fun. Hopefully roller coaster.


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Also just added $PAY as a potential breakout.

Just saw Chinese PMI beat. Not good for risk. Tomorrow US ISM is the biggest data point at 7am PST.


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Oil and USD are working. Bond yields also fell since Friday. However bid for equities remains strong. Equities are diverging from macro: reinforces my short risk recommendation. NFP this Friday will be huge! Last chance to sell before we get the most important data point for Fed. If NFP prints above 220k jobs, I expect a hike in September. While U.S can stomach another hike, can the rest of the world with Oil still below 50 and deflation? I think we are going to see some fireworks soon.



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Yeah $SPY is down only slightly and $QQQ actually is positive while defensive sector $XLU is down over 2%. It looks like people are actually rotating out of defensive into risk. Tech Trader meanwhile taking a lot off the table on both sides and getting more neutral, now about 67% long by 25% short (33% cash), with technology remaining the biggest exposure at 25%.

I am expecting risk off next week. I am disappointed today with weak risk off reaction but next week would be ugly. "Bloody Monday"...


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Doesn't seem like much risk-off at all today. Defensive sectors like $XLU and $XLP are actually selling off hardest while everything else is holding up.

Surprised TT hasn't bought into financials?

Yes  you are right. I expected Fed to be dovish but they came out hawkish, which caused repositioning and created this illusion of 'risk on'. High beta out performed low beta by 0.9% today and Momentum lost 0.35%. This is good for today but worse for next few weeks. I think we get a massive reversal and you want to own Utes and Staples. I am amazed how oil held up relative to USD move. It might be up for geopolitical reasons or it a fake reaction. Let's see on Monday. Next week will be interesting. I stayed defensive and even added. Good luck


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By the way look at EWZ and EEM. I was short since last week, as well as XBI. These are early signs of risk off. I am short IWM too which is flat since I shorted it but it does look weak and ready to break down soon. It is just my opinion.


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I recommend to be neutral or short Oil and energy stocks. Next Friday is NFP, which is expected to be strong, and if it is strong they could hike. USD would likely rally next week (normally the case after hawkish Fed) and Oil inventories in US are now turning up. Chinese demand is likely going to weaken since they are consuming less and exporting more. Geopolitical risk (Yemen threat for Saudi oil) keeps oil up which means it is overvalued relative to fundamentals.

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