ES Journal - 2023/2024

mervyn said:
prepare yourself, ta-35 down 2.5%. war will start this week, it seems.
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Some things to consider:
- the sofr curve is now pricing in implied growth of less than 60bp in 2025 (consensus is at 1.7%)
- if data this week is bad, but not consistent with a recession, then you could get a near-term rebound
- however, war risk premia is likely to rise (US and Israeli sources suggest a Monday attack) and the Fed (a la comments from Alan Goolsbee) seems to be pushing back against extrapolating from one data point
- I’d argue that the trend of data in labor market is quite weak and supports a Sep cut of 50 bp (currently priced in) — in fact the market is currently pricing in 4.6 cuts (25bp) by December
- US eco revisions are going to move lower (consensus at 1.7% for 2025…) and that will drop eps estimates. A stock price is comprised of the metric and a multiple — in this case the metric will fall, but with rates also falling, the multiple can expand — my hunch is that high growth names that aren’t so cyclically exposed will outperform (kind of like mag7 vs the rest)
 
longandshort said:
Some things to consider:
- the sofr curve is now pricing in implied growth of less than 60bp in 2025 (consensus is at 1.7%)
- if data this week is bad, but not consistent with a recession, then you could get a near-term rebound
- however, war risk premia is likely to rise (US and Israeli sources suggest a Monday attack) and the Fed (a la comments from Alan Goolsbee) seems to be pushing back against extrapolating from one data point
- I’d argue that the trend of data in labor market is quite weak and supports a Sep cut of 50 bp (currently priced in) — in fact the market is currently pricing in 4.6 cuts (25bp) by December
- US eco revisions are going to move lower (consensus at 1.7% for 2025…) and that will drop eps estimates. A stock price is comprised of the metric and a multiple — in this case the metric will fall, but with rates also falling, the multiple can expand — my hunch is that high growth names that aren’t so cyclically exposed will outperform (kind of like mag7 vs the rest)
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i trade rates all the time, if i were to keep both zt and zn, could have done 5-6x instead of 3x booked. rate is ahead of the fed by miles, like last year expected 6 rate cut this year. consumers run out of money, p/e would contract.

outperform is a relative term, i wouldn’t buy any dip at this moment. i feel a circuit breaker event is on the horizon.

keep the money until holiday rally and trade small during next few months is my view.
 
mervyn said:
i trade rates all the time, if i were to keep both zt and zn, could have done 5-6x instead of 3x booked. rate is ahead of the fed by miles, like last year expected 6 rate cut this year. consumers run out of money, p/e would contract.

outperform is a relative term, i wouldn’t buy any dip at this moment. i feel a circuit breaker event is on the horizon.

keep the money until holiday rally and trade small during next few months is my view.
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It really depends on where we clear risk. All the bad positioning in mid-24 (April through end of July) is going to have to reset. The question is how quickly will it do that.
 
SammyJ said:
You got that right !! . You know how the bully on the playground screws with everyone until that one wrong guy he messes with . Well I’m that one wrong guy .Poopie go change your diaper . Lmao
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What could go wrong?


upload_2024-8-4_11-23-38.jpeg
 
longandshort said:
It really depends on where we clear risk. All the bad positioning in mid-24 (April through end of July) is going to have to reset. The question is how quickly will it do that.
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stagflation

ndx is already in the correction territory, why wouldn’t spx?
 
NoahA said:
Just curious to ask if there is still a video in the works like you suggested the other day?
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Most likely, it’s a matter of getting time and motivation to do it. Also I’m superstitious regarding revealing the nuances of it all. Whether it will be duplicated and fails to work after a bit since algos can be designed to arbitrage it. I may just show the balance in real time change instead of the full screen shot.
 
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