Bull Case vs. Bear Case Part II (Tactical Ideas and My Opinion)

What’s in Today’s Report: Bull case vs. the bear case part II (Tactical ideas and my opinion), and more…

Is the S&P 500 forming a double top?

Is the S&P 500 forming a double top?

Term Structure in Natural Gas Has Turned Bullish

Any real commodity trader or analyst knows that watching the “term structure” of commodities can offer substantial insight into whether the trend in that commodity is turning bullish, or bearish. The term structure of natural gas has become significantly “backward-dated” in that the current month’s prices (for January delivery) are trading higher than February’s price. Prices for February delivery are trading at a higher price than March delivery, and this lasts all the way out until June 2014. Term structures can be an important indicator of physical demand for a commodity, and as the backwardation in natural gas implies, we are seeing a systemic increase in demand for natural gas—not just a temporary uptick in demand due to cold weather to start the winter. And, that is potentially bullish not just for natural gas, but for natural gas producers. Read More

The Economy: A Look Back And What’s Ahead This Week 12.9.13

Last Week Last week’s economic data continued the trend of surprising to the upside, highlighted by the jobs report on Friday. The takeaways from last week’s data were threefold: First, from an economic perspective, the data further implied we’re seeing a mild uptick in economic activity, although nothing huge. Second, from a WWFD (What Will […]

Watch How SHY Trades After the Jobs Report

I want to again point out that, although I’ve heard the opposite lately, both stocks and interest rates can rise together going forward.  As I pointed out about two weeks ago, the key difference between this recent rise in yields and the May-August rise in yields is that this time, the “short end” of the yield curve hasn’t sold off (it has actually risen).  And, that implies the market is more comfortable with the idea of higher interest rates, and that this recent rise in rates, and subsequent steepening of the yield curve, isn’t a “rally killer” for stocks.  Read More

Jobs Report Preview

The “consensus” expectation is for 185K jobs added in November, although given yesterday’s ADP report, the “whisper number” is somewhere closer to 200K. I’m going to give the “Goldilocks” scenarios, but first keep these couple things in mind …

Why IOER Matters to You

IOER, or “Interest On Excess Reserves,” refers to the interest the Fed and other central banks pay banks on their excess money (reserves) they keep in those central banks. So, if I’m a large bank, and I deposit more money than is required at any Fed bank, I get paid 25 basis points on that money. As of the latest Fed release, in October there was more than $2 trillion in “excess reserves” on the Fed’s balance sheet, earning 0.25% annual interest.