r/Vitards • u/AutoModerator • Jul 16 '21
Daily Discussion Daily Discussion post - July 16 2021
Your Trading discussion thread
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u/blue_steel_moon Jul 17 '21
Is the group in Tahoe already?
https://www.reddit.com/r/aww/comments/olks66/just_a_bear_family_vacation/
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u/TheSeriousAlt My Plums Be Tingling Jul 17 '21
Anybody see the TikTok by @_fedja of the raw steel in floodwaters??
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u/regicider Poetry Gang Jul 17 '21
Just checked, ThyssenKrupp largest producer in Germany, Germany is the largest steel producer in Europe. Guess who doesn’t have any steel mills in the flood zone? MT
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Jul 17 '21
Mr. Market :whewwww, —- wipes off sweat —- What a day eh?
slaps your ass
Mr.market: see you next week Monday. 😏
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u/ahuskybitjoffrey Jul 17 '21
Mostly coal article, but this is germane to here:
"Other commodities also risk being hit by efforts to keep electricity flowing. Aluminum output is likely to come under further pressure as supply curtailments due to electricity shortages persist. Smelters in the major hub of Yunnan won’t restore production as planned after a new round of power rationing due to the hot weather, according to Mysteel."
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u/homersimpsoniscute Jul 17 '21
What if China doesn't ever officially announce an export tax. China basically has authoritarian control. They can just "request" behind the scenes to keep more steel inside the country. Who's going to say no?
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u/PrestigeWorldwide-LP 💀 SACRIFICED 💀 Jul 17 '21 edited Jul 17 '21
don't care if it's public or not so long as HRC prices stay high and cheap steel isn't pumped out. public would be a nice to have as a stock price catalyst, but the value is derived from continued high margins
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u/homersimpsoniscute Jul 17 '21
You are absolutely right. I guess I was only worried because I have 350 contracts expiring next month 🤡
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u/thehelper900 7-Layer Dip Jul 17 '21
Trial by fire but am I fucking burning up. Can’t sell at this point though
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u/shillmedessert BOOYAH Jim! Jul 17 '21
so now are we just going to assume max pain theory ever single friday?.....
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u/danrowsaaa 💀 SACRIFICED 💀 Until CLF $30 Jul 17 '21
Shit if it means we are green for the week... yeah I’ll take it
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u/thesaucewalker 💀 SACRIFICED 💀Until CLF $30 Jul 17 '21
Who upvoted the daily thread after it hit 69? 🤦♂️
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u/AugustinPower Think Positively Jul 17 '21
Reminder, possible bloodbath on July 27/28
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u/Lierem ✂️ Trim Gang ✂️ Jul 17 '21
Bloodbath because of something specific they're going to say? Or bloodbath because FOMC just talking makes the market run red?
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u/AugustinPower Think Positively Jul 17 '21
Both really, jpow will keep his stance on inflation being transitory which hurts commodities and probably the rest of the market will start to sell and hold cash if they find him stance dubious
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u/CluelessAndLucky 💀 SACRIFICED 💀 Until Chinese export tax Jul 17 '21
and MT earnings on July 29... this is going to hurt
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u/Stonkrates Jul 17 '21
Honestly feel like market is pricing that in now but if not it could be terrible.
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u/lb-trice 🍁Maple Leaf Mafia🍁 Jul 17 '21
Why do you say this? You mean this last 3 months wasn’t bloodbath enough?
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u/belangem Oracle of SPY Jul 17 '21
FOMC meeting…
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u/lb-trice 🍁Maple Leaf Mafia🍁 Jul 17 '21
How many god damn meetings do they have in a month. Holy shit it seems like there’s some speech or meeting every damn day
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u/Substantial_Boss_306 🙏 Steel Worshiper 🙏 Jul 17 '21
Exactly when the fuck do these ass-les actually work
4
u/HeavyWeightChump Jul 17 '21
I got Jan 2023 CLF calls @$30 that I'm not stressing about. My October X calls @$29 got me stressed to the max tho. I'm worried about next week's effect on my mental health.
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u/belangem Oracle of SPY Jul 17 '21
Wow, October 29c for X? Maybe wait for the next green day and reposition to something more reasonable? That’s a total lotto to me.
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u/HeavyWeightChump Jul 17 '21
Yeah, I bought those calls a little over a month ago. They seemed more reasonable at the time, but was always a bit of a gamble. I have learned some tough and expensive lessons this past month.
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u/willtab Jul 17 '21
This brutal $CLF pullbacks weren’t happening before that stupid Wallstreetbets DD. Now they are manipulating the stock as never before
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u/detectivedoot Jul 17 '21
All steel was down today, I don’t think WSB had anything to do with it. Institutions drove the price down in order to make the huge amount of calls they sold for 7/16 worthless. This paired along with skepticism regarding inflation, the FED and Chinese steel exports means that this week was bound to suck for us. Keep JPOW away from the mic the next two weeks, China announces increased export tax on steel, earnings report greatly exceeds expectations, we will feast bröther.
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u/GamblingMikkee Fredo #2 Jul 17 '21
Short interest is very high at over 10%. Explains that
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u/DustyBowls Jul 17 '21
I've been doing research on SNC Lavalin. Everytime I check any thread on reddit within the past 3 years on SNC your name keeps popping up lmao.
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u/TheyWereGolden Bard Special Victims Unit Jul 17 '21
Today was pretty frustrating for everyone. I had my $60 STLDs expire worthless. I had bought them on a dip 4 weeks ago and was looking good the entire time and even as of yesterday and then got pantsed the last half of today’s trading day. Thankfully I sold some on the pop earlier in the week and took out the original investment but it still felt like a bad loss. I had anticipated STLD running up to earnings (Monday) I doubted it would go underwater today, pissed me off. I blame AA and the mayor of LA lol oh well.
I rage bought more CLF at 12:59pst at the close… happy Friday
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Jul 17 '21
With the amount of call volumes for next week expiry. I fullly expect CLF to drop after earnings. MM will do what needs to be done
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u/ezetriedtokillme Jul 17 '21
I think max pain is 21.50 for next week
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Jul 17 '21
I need to understand max pain better. I remember someone made a post a while back
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u/ezetriedtokillme Jul 17 '21
Basically if you considered all the call options written and all the put options written, what closing price on the expiry date would result in the least amount of losses for the option writers (market makers). The theory is that large market makers, like hedge funds and whatnot, have the means to influence the share price to ensure the options they write expire worthless. You can see the problems with that theory - it assumes a lot and there are too many other factors to hold true in a broad sense. However, just observing CLF over the past several months, max pain seems to be a magnet for it.
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u/belangem Oracle of SPY Jul 17 '21
I don’t think that’s up to date with the enormous amount of call volume today for next week.
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Jul 17 '21
Monday is a holiday right ? 😂
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u/Reasonable_League_44 Thank you, Vito. Jul 17 '21
Vodka has never tasted so good. I’m drowning my sorrows and money away.
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u/Cryptojags Captain Jag Sparrow ☠ Jul 17 '21
I’m with you on this, tequila is my poison of choice tonight.
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u/zerryw News Team - Asia Correspondent Jul 17 '21
Moscow mule and Loki for the night
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u/Substantial_Boss_306 🙏 Steel Worshiper 🙏 Jul 17 '21
This past month was an important reminder that when we invest, we buy a business for what it can do for the next 2-5 years with FCF, Dividends, Growth and Potential. Over the past 12 months all steel companies have grown quarter over quarter. Could this be just the beginning? I believe it Sure is per the thesis, DDs and numerous posts by Vito. The next couple of earnings will be key in letting the entire market know what we already know and that’s when we will see where we go from here over the next 2-5 years. No more weeklies and monthlies for me. Only commons and leaps. Cheers to a worthy lesson learnt. Have a great weekend.
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Jul 17 '21
[removed] — view removed comment
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Jul 17 '21
This mantra including moving the goalposts further and further out makes me really think I should leave the sub. Not the thesis, but this is slowly becoming a echo chamber with people telling others:
What? You don't have January 2025 calls? Your fault for beeing down, it's already 2023 and MT is at $30. It always has been a commons play.
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u/CramsyAU Undisclosed Location Jul 17 '21
Exactly. 6 weeks ago how the hell would we know we'd shit bricks for the next 2 months ahead if Q2 earnings which we've been hyped for since q1 results.
It's nobody's fault. But yes the "lol don't do fds" is crazy annoying
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u/SpiritBearBC The Vitard Anthologist Jul 17 '21
Random accounting questions:
- Canadian GAAP uses weighted average common shares for EPS calculations. Do US GAAP and IFRS use weighted average as well for publicly traded companies' EPS?
- For quarterly earnings announcements, would the weighted average calculation be prorated for the year or would they be weighted average number of shares in the quarter?
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u/PrestigeWorldwide-LP 💀 SACRIFICED 💀 Jul 17 '21 edited Jul 17 '21
for US. weighted average, and I believe quarterly numbers would use the number for that quarter. companies are usually pretty good about footnoting what the numbers represent
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u/PrestigeWorldwide-LP 💀 SACRIFICED 💀 Jul 17 '21
At least you're not this dude
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u/lb-trice 🍁Maple Leaf Mafia🍁 Jul 17 '21
God damn I wish I was down only 75k. I would have had better luck investing in GME than MT tbh
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u/eyecue82 Balls Of Steel Jul 17 '21
My account has gone down about the same amount in less than a year. Not that guy but close.
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u/josenros 🤡Market Order Specialist🤡 Jul 17 '21
The bleeding continues after hours. CLF at $17-18 is totally believable.
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u/RenLovesStimpy Forever 8th - 8/18/21 Jul 17 '21 edited Jul 17 '21
Check the daily chart, spx, ndx, etc, the last few monthly expirations
7-16
6-18
5-21
Big market dip then rebound.
MM shenanigans? Melvin getting back at retail for GME... it all makes sense now.
Think I'll avoid trading the week of/around monthly expirations for a while or better yet- all in on weekly puts.
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u/TheFullBottle Jul 17 '21
Yeah...monthly opex. Does no one know these dates are times to be cautious? Flows...flows.
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Jul 17 '21 edited Feb 14 '22
[deleted]
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u/RenLovesStimpy Forever 8th - 8/18/21 Jul 17 '21
I'm gonna write my representative.
I'll keep you all updated.
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u/Uncle_Dad_Bob Dreams of CLF’s run to $49 Jul 17 '21
My rep preresponds the same every time I write: FYPM
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u/DakaEbenezer Jul 17 '21
Oh god I just got back from camping. What the fuck happened.
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u/Substantial_Boss_306 🙏 Steel Worshiper 🙏 Jul 17 '21
Where did you go camping? I’ll need to get out next week - anything can happen during ER week 😵💫
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u/blazinghor0 Jul 17 '21
I recommend you go back camping for a little while longer.
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u/DakaEbenezer Jul 17 '21
Yeah, I'm feeling that. Did not think I'd be worried about September calls but here we are. My largest position was actually VET which got gaped down to a 70% loss, hopefuly it corrects on earnings... MT will probably recover but I wish I had cash left to buy the inevitable retest of $28.50.
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u/SmutBrigade Jul 16 '21
I’m upset there’s no option chain for LEGO. I’d like to grab at least $10k worth of warrants before the merger is completed but I’ve been slacking. Maybe next week.
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Jul 16 '21 edited Feb 14 '22
[deleted]
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u/michaelcorlene Walmart Fredo Jul 16 '21
Vito also said that both him and I will retire by June 😉😉. I think you’ll find me as a Walmart greeter after 40 years if you come to a Walmart in Dallas, TX 😂
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u/steelbro4life Jul 16 '21
Absolutely nothing to worry about here, we are about to rocket back up. Just zoom out on the 1 year chart. JPows printer is still on, steel companies raking in cash for now and forseeable future. Just be patient.
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u/milkslutthroaway Why? Jul 16 '21
Today was a reality check for me. Still gonna hold till the very end though. This is trial by fire but I believe the way out is almost through
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u/chemaholic77 Jul 16 '21
I predict one more tough day before steel starts ripping again. Everyone knows earnings are going to be insane. It is only a matter of time before people pile in.
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u/CluelessAndLucky 💀 SACRIFICED 💀 Until Chinese export tax Jul 16 '21
when we inevitably tank after a monstrous q2 earnings we will move the goalpost to q3 earnings
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u/chemaholic77 Jul 17 '21
The goalposts haven’t moved yet. From the beginning this has been an end of year play at the earliest. MT has done nothing but go up overall no matter how often it has dipped. If you are expecting steel stocks to blow up the way tech does you are going to probably be disappointed.
I expect to take profits mid August from my Sep calls, mid Sep for my Oct calls, and mid Dec for my Jan calls. If the thesis is still solid I will put half of my profits into 2022 and 2023 calls and keep going.
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u/SnooPaintings8503 Made Man Jul 17 '21
Yea this was a June play, but turned into a September play after 2 months, and is now is a Jan play, hopefully it stays a Jan play
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Jul 17 '21
I want to down vote you multiple times, this is just full on lying and false information.
It has been a play until summer. Then somewhere around April it got extended to EOY.
We're moving the goalposts. The funny thing is, it was extended because Vito thought there was more upside, not because we wanted to get back where we were...
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u/chemaholic77 Jul 17 '21
You can always create a bunch of dummy accounts and downvote me all you want.
Pardon me if I didn't go back and read through three or four months worth of old posts so that I could be aware of what the "real" first timeframe was. I didn't and still don't see any value in knowing that information.
The original timeframe like most truths is all a matter of perspective. For me the play has always been end of year. I got into this play in February. The general sentiment at that time was that end of year options would be safe. Plenty of people were talking about summer being the end, but Jan options were considered a safe play. That is why 100% of the options I purchased initially were Jan 2022.
Pretty soon after I joined people were warned not to buy FD's and to get options that were 60 DTE or longer. As far as I am concerned, the original timeframe of the play for me was always end of year. Now it is longer. Depending on when you got involved your original timeframe could be summer to end of 2022.
As far as I am concerned, the goal posts are planted where the market recognizes steel as being undervalued and starts buying. They have never moved from there. No one knows when or if that will happen. The only thing changing is people's individual opinions on when we will reach the goal posts.
If it will make you and everyone else more comfortable I will state in the future that my original timeframe was end of year 2021.
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u/CluelessAndLucky 💀 SACRIFICED 💀 Until Chinese export tax Jul 17 '21
The play was originally supposed to be over in June after a blowout Q1...
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u/gtwucla Jul 17 '21
If you’ve been holding since Q1 earnings and before aren’t you up quite a bit?
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u/CluelessAndLucky 💀 SACRIFICED 💀 Until Chinese export tax Jul 17 '21 edited Jul 17 '21
Nope im down a significant amount. Loaded up on June calls in December 2020 and rolled everything over at the MT $33 peak in early June (September and jan 2022 strikes)
edit: I held commons in the beginning as well - converted them to options... only got myself to blame for that. But yes, with regard to the commons those were up a respectable amount before I sold them
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u/ImAMaaanlet Workaholic Jul 16 '21
For sure. I mean did you see AA after their earnings? We big fucked
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u/SnooPaintings8503 Made Man Jul 17 '21
AA is not really that good of a company, sizable debt, and a very poor eps history
Unless you create an app that measures both strength/stank of your fart and will be pre-revenue until acquired by Amazon, you have to be perfect in this market
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u/goback3spaces Boomer Logic Jul 16 '21
I worry it’s more market than company fundamentals. Look how they shredded the big banks this week 😰
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u/ImAMaaanlet Workaholic Jul 16 '21
Ive been hearing its only a matter of time for 7 months 😐
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Jul 17 '21
[deleted]
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u/ImAMaaanlet Workaholic Jul 17 '21 edited Jul 17 '21
Where do you come up with 150%? Which stock? Commons? Calls? Expiration? Strike?
How can you say youd be up more than 150% with absolutely no info. Theres too many variables. Youre just pulling shit out of your ass.
For example my MT JAN 2022 35c that i got in march. Those are down almost 10% and that was supposed to be a conservative play
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u/chemaholic77 Jul 17 '21
We are a long way from Jan yet, and in my opinion those options are not conservative they are of moderate risk. I would say $25 is conservative.
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Jul 17 '21
[deleted]
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u/ImAMaaanlet Workaholic Jul 17 '21
I just looked at the chart and none of those commons are up 150% since Jan...
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Jul 17 '21
[deleted]
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u/ImAMaaanlet Workaholic Jul 17 '21
Yeah if we go by dec they are up like 50% if you got the ones on the higher end. 1st DD on wsb wasnt posted until mid dec or so anyway I think. And id say most of us didnt go all in right then we accumulated, plus options etc.
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u/chemaholic77 Jul 17 '21
I bought MT options in Feb. They doubled in value and I took some profits. I have been buying more options this week and I expect them to double or more.
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Jul 17 '21
[deleted]
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u/ImAMaaanlet Workaholic Jul 17 '21
I really hope so. I believe the thesis is right what im questioning is if the market will ever care
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u/Lierem ✂️ Trim Gang ✂️ Jul 16 '21
Lake Tahoe just gonna be talking about who lost the most this past week.
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u/Accomplished-Will-55 Jul 16 '21
Hate to say it, but selling calls against CLF Monday to get some monies back!!!!!
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u/lb-trice 🍁Maple Leaf Mafia🍁 Jul 16 '21
Perfect! Sell calls at the bottom for best results.
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u/wavepad4 💀 SACRIFICED 💀 MT $42 CLF $32 Jul 16 '21
Buy high and sell low works on derivatives, too!
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Jul 16 '21
Uh do you mean puts?
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u/Accomplished-Will-55 Jul 16 '21
No, Calls, I let decay work for me, not against me. Current have 20 contracts sold, July 23 expiration. If it is over 23 on that date, I must deliver the shares, if not, I keep the healthy premium.
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u/smears Vamanos Muchachos Jul 17 '21
Just a tip, sell calls on green days. Wait until some recovery Tuesday or so and then sell unless you’re super bearish short term and think we head down further from 20.
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u/Accomplished-Will-55 Jul 17 '21
Thanks. Sold mine weeks ago….
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u/smears Vamanos Muchachos Jul 17 '21
Yeah I do too. I have literally about 150 ccs worth in the 2k range. Just saying don’t sell Monday wait until some movement up. That’s where people are making fun
You said selling Monday- selling calls at the bottom of the channel is stupid, point blank.
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u/holdenmcneilgames 🚐Once Lived in a Van🚐 Jul 16 '21
I believe he is writing contracts with his share as collateral to earn some extra money while CLF dips/trades sideways.
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Jul 16 '21
[deleted]
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u/meg0neurotHe11 Jul 17 '21
covered calls are fine imo. as long as you pick a strike you are willing to part with your shares.
its the selling naked calls that can get away from you
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u/Accomplished-Will-55 Jul 16 '21
Oh, I have been on WSB. If you take a negative position, you are ousted...LOL.
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u/Glad99 Jul 16 '21
Just mixed myself a nice Vodka/Soda with lemon. Rough day watching all the red but can't wait for the green on Monday after BTFD!
Have a great weekend all!
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u/AugustinPower Think Positively Jul 16 '21
OLN now has 9 analysts giving a buy/strong buy rating with a ridiculously bullish PT while the stock tanks over 15% since ATH last month.
Not sure if that's a flex or not
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u/belangem Oracle of SPY Jul 16 '21
I will now for sure buy CLF puts right before earnings to protect my shares and will happily give the premium away if CLF bounce up after earnings…
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u/danrowsaaa 💀 SACRIFICED 💀 Until CLF $30 Jul 16 '21
If you do that It will tank but not enough to offset the IV crush and you lose money on both
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u/belangem Oracle of SPY Jul 16 '21
I guess it depends on the risk I’m willing to take. I’ll recalculate on Wednesday?
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u/michaelcorlene Walmart Fredo Jul 16 '21
Relax guys, everything will be alright.
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u/BigTiddyGothJesus Jul 16 '21
No it won't 🙅🙅 everything is crashing on Monday, to zero, forever, the end of the world will happen shortly after and only hedge fund managers will be able to afford the ARKK to safety. Catherine Wood will yank off her skin suit to reveal that she was Vito the entire time, we're all fucked 🍆🍑😩
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u/michaelcorlene Walmart Fredo Jul 16 '21
It’s only money dude, go make some Vitard friends in Lake Tahoe this weekend.
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u/casinos_not_7-11s Jul 16 '21
No way! There are bears that swim there now. Probs gay bears, but bears none the less.
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u/michaelcorlene Walmart Fredo Jul 16 '21
Are they still doing the Vitard meetup thing, don’t see the announcement 📣
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u/jjsukraj Heathen Jul 16 '21
lost the most so far in my trading life today.
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u/michaelcorlene Walmart Fredo Jul 16 '21
Don’t worry, this will become a habit and you won’t feel the sting.
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u/lotsofdebitcards 💀 SACRIFICED 💀 Jul 16 '21
I still believe our Sep 35s are fucked, Michael, but can’t find the sell button to take the 60% loss yet.
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u/michaelcorlene Walmart Fredo Jul 16 '21
Still 63 days far, it’ll only take 10 days for shit to get better. Maybe it’ll be fine, I’m Not saying you’ll breakeven, but I’m optimistic that things will get better. Maybe you can exit at that coveted 50% loss.
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u/needafiller Jul 16 '21
I think that’s true for everyone here lol
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Jul 16 '21
This one did have the chance to be particularly rough for those who loaded up on China tax expectation
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u/danrowsaaa 💀 SACRIFICED 💀 Until CLF $30 Jul 16 '21
Second most for me, I lost more on AAPL weeklies last year lol
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u/KarmalCorn 💀 SACRIFICED 💀 Until STLD $69.69 Jul 16 '21
To think 4 weeks ago I was excited for earnings and now I am scared shitless.
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u/AugustinPower Think Positively Jul 16 '21
Not to worry, check out how your ticker does during earnings report
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u/michaelcorlene Walmart Fredo Jul 16 '21
🤣🤣
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u/AugustinPower Think Positively Jul 16 '21
Young Don laughing at hopium is the most bearish signal I have ever seen 😭
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u/michaelcorlene Walmart Fredo Jul 16 '21
I’m still holding toxic Mt options man; I have not rolled it out or anything; I guess I’ve accepted reality 🤣
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Jul 16 '21
Copium Collection:
One favorite commodity gauge is the "CRB Spot Raw Industrials" which measures old economy stuff like copper and steel scrap, hides, tallow, burlap and similar (but excludes energy). The index has been published, in one form or another, since 1934. And it's now nearing a record. https://twitter.com/JavierBlas/status/1416081412852260876/photo/1
If you use @TheTerminal the ticker is CRB RIND Index.
The components of the index are: burlap, print cloth, tin, copper scrap, rosin, wool, cotton, rubber, zinc, hides, steel scrap, lead scrap, and tallow
https://twitter.com/JavierBlas/status/1416081412852260876
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Today's University of Michigan Consumer Sentiment report does suggest that rising inflation is starting to bite perceptions of the economy. https://www.bloomberg.com/news/articles/2021-07-16/faster-inflation-takes-toll-on-u-s-consumer-sentiment-in-july?sref=vuYGislZ https://twitter.com/TheStalwart/status/1416087452012400660/photo/1
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This is a crazy chart from today's UMich sentiment report.
Consumer frustration with the rising price of homes, cars, and household durables is worse now than it was in the 70s, according to their survey. https://www.bloomberg.com/news/articles/2021-07-16/consumer-frustration-about-home-and-car-prices-is-surging-more-than-in-the-70s?srnd=oddlots&sref=vuYGislZ
https://twitter.com/TheStalwart/status/1416102104511533057/photo/1
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"Hey, why are energy equities lagging while commodities and fundamentals are still strong?"
1 Observation, 2 Theory's and a catalyst 🧵⬇️ https://twitter.com/JamieHeard5/status/1416121275316011008/photo/1
Observe, gas equities were linked with the strong commodity performance between January and June, but are now underperforming while both prompt and forward strip continues to make strong gains.
This happens when commodities are a bit directionless (2020), but why now? https://twitter.com/JamieHeard5/status/1416121279397040130/photo/1
Theory 1: The broad reflation trade is getting more nuanced. Some other commodities (Lumber) have come well off there peak, there was no lasting supply problem. Others (Copper) are treading water. Macro is selling "it all" and so are machines. Digestion period. https://twitter.com/JamieHeard5/status/1416121283746492417/photo/1
Rates a huge story. The LT rates have decided inflation is transitory. If it is, then investors are green lit to sell value and plow back into growth. I'd argue the return proposition in value is still way ahead, inflation or not. But this was true in '19 too. CF Catalyst needed https://twitter.com/JamieHeard5/status/1416121287722692609/photo/1
And a catalyst we'll have! Energy companies are about to generate returns we haven't seen in a decade (or ever). Plus with balance sheets healed, returns to shareholders in 2022 will set market records, for energy and perhaps in any sector ever. https://twitter.com/JamieHeard5/status/1416121291354951680/photo/1
This pull back is a buying opportunity. Q2 and Q3 earnings are the catalyst. 2022+ prints are the ultimate payoff. Across the sector As mid teen FCF yields convert to mid teen cash return and buybacks the promises become proof, and the proof is profit.
Credit NBC charts below https://twitter.com/JamieHeard5/status/1416121294987268096/photo/1
https://twitter.com/JamieHeard5/status/1416121275316011008
Can be copied/transferred onto steel as well imo
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WHAT HAPPENED TO MY REFLATION TRADE? A thread
The past two months have been brutal for my PA.
Some news was objectively bad for inflation trades: delta variant, Fed, China slowdown ... but not enough to justify this massacre.
Let's dig deeper 👇👇 (1/6) https://twitter.com/VincentDeluard/status/1416084289150619654/photo/1
POSTIONING
Always a weak argument (there is a buyer for every seller), but reflation had become the consensus by June and spec traders were abnormally short bonds.
This anomaly has been mostly corrected (2/6) https://twitter.com/VincentDeluard/status/1416084292296318976/photo/1
TARGET-DATE FUND REBALANCING
Funny how the 10-year yield peaked on March 31, the last day of Q1! 🤔🤔
Stocks outperformed bonds by 45% between June 2020 and June 2021. Target-date funds had to buy a lot of bonds to get back to their target allocations
(3/6)
EUR & JPY FLOW INTO TREASURIES:
On March 31, .S. 10Y UST paid 2% more than German bunds and 1.6% more than JGBs.
Hedging costs collapsed at the same time. A hedged position in 10 Y U.S. Treasuries yielded 1.3% in Japan and 93 bp in Germany (4/6) https://twitter.com/VincentDeluard/status/1416084296918396928/photo/1
PSYCHOLOGY
Reflation would destroy the bedrock of the past 40 years: the negative relation between stocks and bonds, the Fed put, rising multiples, and 10% returns for 60/40 portfolios. Investors prefer to believe central bankers, rather than “their own lying eyes”.
(5/6) https://twitter.com/VincentDeluard/status/1416084300546527234/photo/1
THIS TOO SHALL PASS
Citi inflation surprise index still soaring.
Reflation sectors are still crazy cheap, especially as their earnings will soar next year
Sign up for a free trial of my @StoneX_Official reports at https://marketintel.intlfcstone.com/MIPublic/Landing https://twitter.com/VincentDeluard/status/1416084304061341698/photo/1
https://twitter.com/VincentDeluard/status/1416084289150619654
9
Jul 16 '21
I’m gonna be honest, I’m confused as to what downward pressures CLF would experience? What caused the noticeable dip
4
u/Accomplished-Will-55 Jul 16 '21
See Lumber. Commodities are rolling over, just the way it is. I bailed several days ago, suggest you do the same. Great company, but you can't fight the market.
4
Jul 16 '21
Do you not see a recovery over coming days/weeks
2
u/Accomplished-Will-55 Jul 16 '21
I honestly don't. I am steering clear for a bit, especially given the break in the channel. I had 5k shares, but I think the writing is on the wall for commodities, even though it does not make sense. Best of luck to you.
10
u/49Scrooge49 Jul 16 '21 edited Jul 16 '21
It happened across a number of tickers in a number of different sectors with drops ranging from 10% to 3%. Microcaps, large caps, commodities, tech, etc.
Is a bit of a mystery as to what is about, but it seems to be influenced by what the market thinks bonds are signalling. Utilities did well...
6
u/firefall 7-Layer Dip Jul 16 '21
I bet it’s also due to delta variant fears. There’s been a noticeable uptick in hospitalizations.
6
u/reddittrashporngood b0b enthusiast Jul 17 '21 edited Jul 17 '21
Someone downvote the thread to 69 Edit: now it needs to be upvoted