Bear Cave 2 (Bull Allowed)

[robo]

The Yield Of Supersafe I Bonds May Soon Reach 6-7%; Don't Wait, Buy In January
Jan. 16, 2022 6:04 AM ET158 Comments57 Likes
Summary

The nice lady with the dog pictured below is in a celebratory mood perhaps because she just bought her annual allotment of I Bonds.

I Bonds are the ultimately safe and effective inflation investment offering flexibility in holding period, a likely 6-7% 12 month yield, and up to 30 years of inflation protection.

This article suggests buying your annual $10K limit a few days before the end of January rather than waiting for the May or November resets.

I Bonds with their zero fixed rate beat the daylights out of TIPS all maturities of which have negative real yield plus vulnerability to a general bond selloff.

Nobody really knows where inflation will go or whether we will experience deflation; I Bonds purchased now defend against deflation too, never declining from their highest accumulated value.

https://seekingalpha.com/article/44...on-reach-6-7-percent-dont-wait-buy-in-january


Consider doing at least some of your 2022 I-Bonds purchases during the upcoming week.


If you buy I Bonds during the coming week then you will get the entire month's interest for January and you will be locked in at 7.12% guaranteed with no state or local income taxes through the end of June 2022:

Kaplan
https://truecontrarian-sjk.blogspot.com/

 

[robo]

How the Japanese Yen Relates to the Stock Market
Imre Gams | Jan 19, 2022 | Market Minute | 4 min read
What can the Japanese yen tell us about American stocks?

Well, as it turns out, quite a bit.

The Japanese yen has long held a reputation for being a safe-haven currency.

Meaning, when traders are feeling uncertain or fearful, the yen tends to appreciate while risk-on assets like stocks tend to get sold.

But why would the currency of another country be so attractive when the market gets scared and investors duck for cover?
What can the Japanese yen tell us about American stocks?

Well, as it turns out, quite a bit.
https://www.jeffclarktrader.com/market-minute/how-the-japanese-yen-relates-to-the-stock-market/

 

[robo]

Remember seasonality?
It wasn't long ago everybody was busy front running the January effect. Sentiment has definitely changed and January isn't actually as good as people think, especially not the second part of it. Let's see how this plays out, but the bullish seasonality should kick in later, or is this time different?
https://themarketear.com/

What about VIX seasonality?
VIX seasonality looks "strong"...but don't forget volatility is mean reverting.

 

[robo]

SPY daily: Moves down to, or back testing the 100 sma on the daily chart, have been good buy points in the past. Watching to see how this move down plays out.

I placed a trade based on the daily pattern that SPY would bounce. A high risk counter-trend trade, but I liked the odds. We shall see if it turns into a trending move to trade or fails to confirm. LOL.... The SPY could also just keep moving lower...

Long VXF and GDXJ.

 

[robo]

IWM daily: The move down for small caps continues..... IWM down around 15% since printing the 243.72 high marker in November. A look at the weekly too....

IWM weekly: Week 9 since IWM moved below the 10 sma on the weekly chart. It has not been easy trying to trade small caps the last 12 months.

 

[robo]

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Orders will ship free starting in late January

https://www.covidtests.gov/

 

[robo]

VXF 2 hour chart: You can see how VXF continues to trend lower and below the 10 sma on the 2 hour chart. Still NO BUY signal unless you are counter-trend trading like I'm doing. LOL..... Catching the falling knife.

 

[robo]

VXF daily: The move down continues. A possible ICL or maybe a YCL coming our way.... Around a (- 16%) move down since printing the high marker of 199.76 for this index. It be very close to the S Fund.....

Bottom Line: The Trend remains down. No "Easy Money Monday" this week unless you were short....

Long - VXF and GDXJ.

 

[robo]

VXF daily: An undercut of the 170.29 marker..... Waiting to see if buyers show up....

I added a few more shares of VXF at Vanguard as we back tested (BT) the lows 170.00ish.... If I wanted to add to the S Fund it's hard to tell what the closing price would be.

Dear

The following order executed on 01/18/2022 at 9:35 AM, Eastern time:

Account:
Transaction type: Buy
Order type: Limit
Security: VANGUARD EXTENDED MARKET ETF (VXF)
Quantity: 10 share(s)
Price:* $170.00

 

[robo]

LOL..... I have tried this more then once..... It always looks easy "AFTER the FACT" and the market has bottomed with a nice bounce.....

Two Rules for Catching a “Falling Knife”
Jeff Clark | Jan 18, 2022 | Market Minute | 4 min read

Most traders are familiar with the cliché Wall Street warning of “don’t catch a falling knife.”

You see, buying into a stock that’s falling sharply is generally a bad idea. While picking the bottom of a stock can lead to massive gains… if you buy at the wrong time, it can also lead to big losses. And, frankly, most of the time… that’s what happens.

But there are times when the knife is so close to the ground – where the risk of further loss is minimal, and where the potential gains are so enormous – that it makes sense to reach out and grab it.

Today, I’m going to show you how to find these setups…

Let’s start by looking at an example.

Take a look at this chart of Lululemon Athletica (LULU), the sports apparel manufacturer known best for its line of yoga clothes…
https://www.jeffclarktrader.com/market-minute/two-rules-for-catching-a-falling-knife/

 

[robo]

DéJà Vu All Over Again
Jan. 18, 2022 7:36 AM

The financial markets will consistently behave similarly to whatever they have done in the past under nearly-matching conditions.

There are numerous sectors today which will likely gain while large-cap growth shares keep making lower highs for two or three years.

We have stealthily entered a meaningful rotation out of large-cap deflation-loving U.S. growth shares into small- and mid-cap inflation-loving global value shares.
Most investors are either treating 2022 as though it will be an approximate repeat of 2021 or else they believe that the investing world is totally different than it has ever been in the past. Both of these expectations are seriously flawed. The financial markets will consistently behave similarly to whatever they have done in the past under nearly-matching conditions. Early 2022 has numerous parallels to early 2000, early 1973, and the late summer of 1929. In addition, the past year which was 2021 was surprisingly analogous to 1999-2000, 1972, and 1928-1929. Therefore, what will occur over the next few years can best be determined by examining the market's behavior during 2000-2003, 1972-1975, and 1929-1932. This is especially true since so few investors are doing likewise, thereby making it probable that you will come out far ahead by studying and applying these valuable parallels.
https://seekingalpha.com/article/44...urce=seeking_alpha&utm_term=RTA+Article+Smart

 

[robo]

Rates: Will they matter?

(Will) rates matter?
The short term gap between NASDAQ and the 10 year is rather wide here (again). If "they" start to care about rates properly, tech could be in for another round of beating...

 

[robo]

A ugly gap down for stocks this morning as the dollar gaps up. We shall if buyers come in or it scares others to sell. The SPY looks to gap down around 1% at the open, so VXF will probably be more. I will post charts after the open.....
https://www.investing.com/currencies/us-dollar-index


Gold about flat, but Silver is on the move.

 

[robo]

Fed - time to normalize

Morgan Stanley's Wilson remains pone of the big bears out there and expects a correction of 10-20% during H1 2022. One of the similarities he sees is the Fed "set up" in the 1940s. He writes: "It was a very similar set-up to today with spiking inflation forcing the Fed's hand to start to normalize extraordinary monetary accommodation. The equity market took notice by adjusting the risk premium sharply higher, much like we are seeing today with the highest-valued stocks. Our view is that this could also happen to the S&P 500 as the Fed begins to act. If so, it's anyone's guess how high ERPs can rise but 350bp seems like a low estimate if the markets decide it's time to adjust for a new regime." Worried Wilson remains worried...
https://themarketear.com/

 

[robo]

The Fed is set to become a net seller of MBS and spreads are likely to widen

The Fed has started tapering its net additions of $40bn a month in MBS for most of QE4 and is only set to net add $20bn in the January reinvestment period. They are on schedule to end net purchases after the February reinvestment period. JPM: "Our current base case has the Fed reinvesting all paydowns into MBS from March through June, and first letting MBS run off the balance sheet in July. Fed holdings of mortgages began the year at $2.60tr, we expect a peak of $2.62tr in February and at YE22 the holdings to be $2.47tr (down 5% y/y). By the end of 2023 we expect the holdings to decline a further $361bn (down 19% from the peak)".

 

[robo]

Cycles: It all sounds good, but my magic 8 ball is broken. So we shall see how it plays out and I will just trade what happens in real-time.

Dollar update: Crash coming?

https://www.youtube.com/watch?v=PzOsBHHhMaU

https://blog.smartmoneytrackerpremium.com/

 

[robo]

Cycles - YCL: 22 months since the last yearly cycle low. Note the historical data of the 50 sma on the monthly. If that doesn't concern you as an investor then you are not paying attention to valuations.

 

[robo]

LOL..... Maybe to some..... One thing I do agree with..... It's what the Fed does, not what it says, that investors should be watching for the next several months. The insiders continue to sell.

Probably the most important chart in the world
DM normalization is expected to move along multiple fronts as rising policy rates will be accompanied by balance sheet contraction. DM central banks have added nearly $12 trillion to their balance sheets over the past two years and JPM expect a roughly $2 trillion runoff over 2022-23.
https://themarketear.com/

 

[robo]

In BUY territory. Close to "EXTREME BUY"...
The Goldman Sachs "Sentiment Indicator" measures stock positioning across retail, institutional, and foreign investors versus the past 12 months. Readings below -1.0 or above +1.0 indicate extreme positions that are significant in predicting future returns.

 

[robo]

I bought VXF ( Like the S Fund) at Vanguard during the trading day on Friday, and I can sell whenever I want, as often as I want, anytime during the trading day.

A high risk counter-trend trade based on a oversold, lower BB tag. I took a 15% position using TSP funds, ( which is a small account these days) and a even smaller position at Vanguard. The price I got was just lucky, but close to the low of the day. I was waiting for a back test of the lows.... So that worked out this time. I still have NO IDEA what VXF will do next week. The chart looks ugly and it remains in a downtrend. NO buy signal from my system. This is a ST trade based on other indicators and not my trend trading system. That system remains in a 100% cash position. The 15% move Friday is gambling, but with odds I like for a win. Like counting cards when playing Blackjack, but that doesn't mean you have a winner. It just improves your odds for a win.

So a few tips based on what I did with my TSP funds. My trading accounts is a much different story!

Dear robo,

The following order executed on 01/14/2022 at 1:17 PM, Eastern time:

Account:
Transaction type: Buy
Order type: Market
Security: VANGUARD EXTENDED MARKET ETF (VXF)
Quantity: 25 share(s)
Price:* $170.44