Flash Update – February 25, 2021

Published on: February 25th, 2021

There is an excellent set-up for selling NDX, which fits with some of the “tells” discussed at length in In Focus and the early Feb Flash Update. Notably, both the sharp rise in bond yields to pre-Covid levels and the sudden loss of momentum in some of the darling stocks that have risen so sharply in recent months. Growth/Value rotation has recommenced in earnest. Whilst it could be benign, Julian fears a more pernicious outcome.

Comments

  • KP
    Kash P.
    1 March 2021 @ 15:18
    Jjjj
  • SB
    Samuel B.
    1 March 2021 @ 06:59
    Julian and partners' method of setting entry and exits works well even through volatility when using market close numbers. I will definitely be respecting the stop this go round :-(. Feels like it's against the law for the stock market to crash these days... Used long SQQQ and call option strike 16 on SQQQ for this trade.
  • MA
    Majed A.
    26 February 2021 @ 17:14
    Hi, Usually trades do not take effect right away. Even if Julian or Raoul share some ideas, I believe you need to have a look at charts and find a good entry. Its almost impossible for RV to time your entry. Prices wont simply fly away, its super rare. By the time I am writing this, the NASDAQ trade almost back to Julian entry. Just saying, good luck everyone.
    • JL
      J L.
      28 February 2021 @ 06:36
      Not sure how you trade but the original stop is 450 points away, by the time the email was sent this had almost doubled. Whether it crashes or bounces after that is irrelevant. It is not impossible to email trade alerts within minutes but you are right it is probably not going to be implemented.
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:30
      Quite so Majed. We can only play the ball as we see it. Same is true for our clients. What we want to do is provide useful guidance. In our view the first step to that is being right. The second step is clarity - if you don't understand what we are saying how is it of any use? And then comes timeliness. If we don't get the first two right the second is useless. Because we cant always be right about the first 2 we use stops. In a way, part of the problem with this call was not just that it arrived late, but that it was substantively correct quite quickly. If the market had rallied in JB's face everyone would have had an even better entry point!
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:32
      JL, this is a good point. We are more than happy to get into a dialogue with people either in comments or via email. Please email me and we will try and come up with alternative stop levels. But the very first question would be where would you place the stop if you were interested in this trade? Cos stops reflect personal circumstances as well as objective market levels. How much risk do you want? How aggressive would you play a short in QQQs? My email is harry@MI2Partners.com
  • AS
    ANDREW S.
    26 February 2021 @ 10:45
    Thanks for the update - although a little late to take any action.
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:25
      For what little its worth, Im not sure it is "too late". How would "too late" be defined? CK. below notes the risk reward given where the NQ sits is pretty well poised. We agree, and we take a negative view of it. So perhaps the way to play it is to identify your preferred support line and whack it if it breaks? I appreciate that we should work on the infrastructure to make sure you get notifications in a timely way, but we were keenly aware of the importance of timeliness and really made an effort to get this out promptly. If it failed, I think we should figure out a better solution. Either way, we always appreciate feedback and we will try and do better going forward.
  • LD
    Lance D.
    26 February 2021 @ 16:51
    Haha The boys could of sent this next week for all I care - when Raoul and Julien said they were a little worried about gold last month that was 'The real vision KEBAB' right there for me- I been around m/i long enough to understand when they are worried about something then its time to pay attention - I prefer them to be worried sick rather than sit about for a flash. I want to see them a nice vivd green in the next video LOL
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:22
      Lance, a fine point. They nailed both Gold and Oil in that video discussion and both were impromptu. Both excellent and very timely calls.
  • CK
    Constantinos K.
    26 February 2021 @ 08:06
    In the previous update, Julian said the next one might be just a two-liner... In the comments, I said that a two liner would be great so long as they send out an alert. Other people said something along the same lines and were told that they would be added to an email alert or something. How difficult is it to email all Pro members about a new Flash Update? It's pointless paying for this service and getting trade recommendations after the event has already began. NDX is now at a key support level for the whole of 2021. Might break down but it's just not the same risk / reward anymore.
    • CK
      Constantinos K.
      26 February 2021 @ 08:12
      Just to clarify, I really appreciate Julian's hard work and great reports in general - it's just a shame not to get such a time-sensitive piece on time.
    • JL
      J L.
      26 February 2021 @ 12:44
      The email alert appears to have been sent about 2 hours late as well.... flash should mean flash, the reasoning had been laid out in a previous reportsend an email with 2 lines of text if necessary, not hard at all
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:19
      I will speak to our colleagues to see how this can be done.
  • DD
    Donal D.
    26 February 2021 @ 04:03
    I'm based out in Asia so unfortunately did not get Julian's message in time to action it. Given NDX is now around the 12,828 level is it too late to put on the trade or should one wait for a bit of a rebound on Friday and then pull the trigger. Appreciate any inputs Thanks,
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:18
      I would suggest looking for a rebound, but what do I know? Trading is a fiendishly difficult business at the best of times. There was a decent bounce for much of the day on Friday, but it faded late and after the close. One might hope for a bounce in Asia but as far as I can tell they have been selling or hedging in Asian time of late.
  • BE
    Brandon E.
    25 February 2021 @ 19:49
    Julian, thanks for the willingness to put your neck out on a short call. Not for the faint of heart. For the individual/novice (I realize the question probably precludes me from executing this recommendation, so for education) how would you execute this trade? Futures/Options(strike/timing)? Thanks.
    • RB
      Ryan B.
      25 February 2021 @ 20:26
      I'm not an advanced investor either. I expressed this trade by buying put option contracts on QQQ ETF (through IBKR). April 16 strike 290. Not sure on the timing of this but I'm not buying a huge amount. If Julian is right, I'll add to this and modify my strike price and date of expiration as needed.
    • SB
      Samuel B.
      26 February 2021 @ 04:29
      There is SQQQ if you want leverage. It is inverse of NDX or QQQ so buy to bet on fall.
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:15
      Options are a good call. Options on the QQQ are a great way of expressing it. More aggressive traders might choose near the money puts. Less aggressive players might consider put spreads or simply exiting less cherished longs. More structured solutions like SQQQ are quite expensive and very expensive in terms of carry. They are also heavily leveraged. Use with care.
  • IB
    Ivan B.
    25 February 2021 @ 19:07
    Julian, thanks fort the update. Are you expecting 10Y yield continue to rise?
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:13
      Yes he is, although the easiest money has been made (isn't that always the way). Instead of breakevens leading the charge, JB suspects that further moves will be more balanced between real yields and breakeven inflation. I think JB expects 10y to tick up in a channel with the Fed steadying the market when it sells off too much. It was interesting that JPow's pushback was not about higher yields (a vote of confidence) but pulling rate hikes forward. But surely that means yields should go higher cos the Fed refuses to curtail the stimulus from fiscal. And god knows the election pledges are pretty chunky and havnt even been hinted at my legislation yet.
  • NM
    Niall M.
    25 February 2021 @ 18:04
    That was quick 🔪
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:10
      I get that a lot, although mostly from my wife. Joking aside, scary markets but Im not sure they are falling knives yet. A falling knife is a 3% down day or worse. We havnt got there yet. In fact, EDs were probably closest to matching the falling knife description.
  • nw
    nicholas w.
    25 February 2021 @ 17:48
    .All well and Good, but Im nervous of trying it again. I followed Julian last time he called the top- because I agreed, and just needed a shove. It cost ...and Im reluctant to risk another pasting
    • AC
      Alexi C.
      26 February 2021 @ 07:12
      A short is aggressive. Did a stop not work?
    • AP
      ANTHONY P.
      27 February 2021 @ 01:04
      Sorry to hear that. No one is always correct but Julian is always good about recommending stops.
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:08
      I totally take that point. Every time you try and short the market there are risks. There is a stop, and we acknowledge that the market could just come back. But if JB didnt warn you that he had taken an explicitly bearish view, how is he helping you?
  • SR
    Steve R.
    25 February 2021 @ 17:56
    If rates spike lower from here (they are overdue a bounce) surely tech will take off again?
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:06
      Yeah, but will they? So its certainly true that the Fed can rescue the short end. Absolutely. But saying the short end will be pinned down is much the same as telling you to take a pop at the long end. Either the Fed will respond promptly to inflation risks or they wont. If they wont, why are you buying the end at negative real yields. If they will respond promptly why was there no Fed response priced in till whenever?
  • JL
    J L.
    25 February 2021 @ 18:15
    published way too late for an immediate short sale, skip the editing next time please
    • RM
      Richard M.
      25 February 2021 @ 18:26
      Agreed . And I still haven’t found the button for email alerts . Reading 3 hours late ain’t much fun
    • SB
      Samuel B.
      26 February 2021 @ 05:40
      They got nothing but grief for skipping the editing a few releases ago tho ha. Was a bit late for me as well. Every sector feels like ping pong right now.
    • HM
      Harry M. | Real Vision
      28 February 2021 @ 19:04
      I take your point but there are all sorts of issues with execution of trades. In this case the market gave a tradeable bounce so there was no significant disadvantage to the slight delay from editing. In other cases the execution might be significantly worse because of lags in the editorial process. We do our best, and in this case we moved as quickly as we could.
  • AP
    ANTHONY P.
    27 February 2021 @ 00:46
    I don't see why i is too late to put this trade on. It is now 2/26/21 and NDX is at about 13,000. Thanks for the update JB.
  • DW
    Dean W.
    25 February 2021 @ 21:23
    I've got some SPY Puts, Mar 350, that have been getting hammered for a while but finally showing some life today. I'll probably sit out anymore put buying or shorting but don't mind seeing this overpriced stonk market get crushed a bit. Bond prices are dropping, equities are dropping, PMs aren't doing much, where TF is the money going, into cash? Maybe into BTC
    • AP
      ANTHONY P.
      27 February 2021 @ 00:21
      I gather you haven't been watching BTC sink like a stone this week. Trust me, it's not going into BTC. :o)
  • MC
    Michael C.
    26 February 2021 @ 04:44
    Thank you for the update, Julian.
  • MC
    Mike C.
    25 February 2021 @ 22:59
    Where do you think the Feds sensitivities are on the yield curve and in spreads? Is this acceleration in RoC crossing from an orderly backing up in yields & spreads to disorderly? And of course the reaction function when that happens. Thx