Thanks for the input, smarty pants....

Only addition would be that trading is always irrational just sometimes trading aligns with our beliefs.

I think it's important to lay out the conditions for when you believe your thesis will be proven wrong. Otherwise you guys come off as perma-bears.

RV was selling the bottom in equities. I have no problem with that at all. I’d love to see them do a deep dive on what they missed. They have made plenty of good calls over time, especially on USD interest rates.

High retracement and market breath are just symptom of an irrational "market" that is disconnected from the fundamentals. That's been discussed at length. Decelerating unemployment is great, but just that - a slowing of the worsening, and the first step on a long road to recovery with ongoing pressure on corporate profits. I agree that the dollar weakening is curious. Could be we're sliding down the "smile" (discussed yesterday), or could be party due to uncertainty over US domestic security/future.

Lack of breadth is hallmark of a bear market bounce. The rotation out of the big name "defensive" tech stocks is a big deal The US stock market has been overvalued for the last ten years because we've become the piggy bank for world savings... This hasn't changed (yet)!!!

When we consider what is likely to happen to earnings over the next quarter or two, it seems like the P/E ratio is likely to hit all-time highs, assuming prices stay where they are or continue to rise. I tend to agree with RV that the stock market at present is overpriced and fragile. Doesn't mean it's about to break, just that the risk is high.

So what? The S&P 500 P/E ratio peaked > 120 in June 2009, just after the bottom

Bevyn S. - There are always Bulls and Bears. All I ask of RVTV is honesty. You have made up your mind. Be happy. DLS

Hey I'm just playing devil's advocate here. Don't silo yourself. Listen to both sides.

Also, it's pretty clear that there are massive income imbalances across the entire globe (capital is favored over labor) which imo is causing insane valuations (savings glut). I just think this gets duked out in the political arena before financial markets structurally change and revert to more historic 'sane' levels. We have not seen structural changes yet, and CB / governments are doing everything they can to prevent that (knowingly or not)

Good comments. I think we need to keep our minds open. At the moment its not clear to me whether this is just a bear market rally or the real recovery. Too many uncertainties in relation to the Virus reappearing for a second act, and the speed /extent of any economic recovery. I am hedging with a small equity position in oil and gold miners, but mainly in cash, with some gold and bitcoin. Patience and caution are needed in the current climate IMO.

Roger said it's "time to lighten up" but if one followed Real Vision, they already sold at S&P 500 2200.

Hi Shiu and Bevyn - please see my comments lower down

I'm a perma-bear who is trading bullishly. Central bank QE purchases are likely to continue for years, and scaled up for even the slightest crisis. Eg, there has been flooding in Texas, hence the Fed should step up the amount of corporate bonds it is buying. Each $1 of central bank purchases assets creates significantly more than $1 of indirect asset purchases as each asset holder shuffles out the risk curve. I hate this market, but the only way to trade it is with the trend. I would not be surprised to see 4000 on the SPX by year end (not a prediction, just possibility). Our politburos won't see this as a bubble, they will be patting themselves on the back instead. Keep the wind at your back, until you're sure that the tide has turned.

Hey I get it. We're at a unstable point in the private sector credit cycle, almost a hundred years in the making. However, until we start consuming more capital via closing income gap, the Fed chooses not to provide liquidity and not to reflate the bubbles (and thus allow deleveraging/collapse of the system), or politics (domestic or global) change the structure of the market that reduces foreign capital and manufactured goods flowing into the US, it'll just get more crazy as the liquidity continues to trickle up to high income savers / speculators / investors. Bubbles will continue to form and pop. We'll probably continue to see these crazy vol spikes, no doubt about that

This is what I was trying to communicate in my comment earlier as well. So far I have been more or less doubling down on the macro bets as they have edged down, I feel I’d rather be churning through successful trades while we wait for indications these macro ideas are coming to light.

I wanted to ask the same question. Since mid May repo flows are about 50 billion USD daily again. The short gamma trade is again active and we see the impact of it on the VIX, which is squeezed in a narrow downward channel. With a VIX still at twice the level a Var shock looks less probable at the moment but what about the impact of a change in market structure? As a lot of the dependable inflows (pension and buybacks) are replaced by an emotional herd of FOMO traders, doesn't this mean that the market is more at risk of a volatility event that blows up the gamma trade? Also, what would happen at that moment? Will we see a similar impact on the market as in March or will the FED back-stop it immediately and limit the downside, e.g. to 10-20% max? The FED does not buy equities (yet) so I wonder how they would calm markets? Adding a few extra trillion in QE may not work a second time. I guess buying equities (ETFs) would be the only option. I aslo fear they would close markets first.

Correction: we had 106 billion repo accepted today. It looks a lot like how it was mid February to me.

Can you elaborate?

Very roughly: Dollar, treasuries and stocks all get sold together as growth prospects dim and RoW takes profits and rotates...

Actually, Roger has been saying the market *could* retrace all the way to all-time highs. He also said that the 61% retracement would be significant in terms of upside momentum because, as I understood him, that would change him from looking at retesting lows to retesting highs. I think he has been very consistent.

I would actually like to see more technical analysis during times like these the fundamentals are one thing but the markets going to move homework is usually move and I’m not smart enough to know what’s going on

Selective listening

Listen Gary S. If you were looking for like a short term answer to the market action, I think you're missing the real value that these gentlemen are offering. Macro is the ultimate chess match in global investing, not to mention we are in the most trying times markets have ever witnessed because of the absolute decimation of capitalism as we all grew up knowing. These gentlemen are putting their thoughts out there for everyone to criticize as they see fit at the detriment or gain of their reputation not only personally but professionally but personally being as they are such a small sector of the financial community right now. Fantastic content and my hats off to all at RVTV. MUCH LOVE AND MUCH RESPECT. TY

Hi Gary – you are correct in that I never said “markets will go to 0.638 fib”. I have been talking about a framework and possibilities rather than certainties throughout, because a framework is relevant to everyone. However, here are a few of the signposts that I previously highlighted (obviously these are selective and therefore biased, but they are taken from transcripts): On March 18th I made the following observation in the comments section. “Its worth being aware that it's quarterly expiry week …..We have seen many instances of reversals (in both directions) around these expiries …. BUT it's not a statistically relevant observation. I factor the expiry potential into the framework, rather than use it as a hard and fast rule.” The market low was the day after expiry. I didn’t predict it. I outlined it as a possibility On March 25th I said: “So we should expect some bounces. And even if we got the basic Fibonacci bounce, 38%, that would take you to 2,640 on the S&P. We're still 3% or 4% away from that.” On March 26th I said: “I think the rally is more a function of how oversold we got post expiry and now rebalancing into the month end. I think I've mentioned a few times 2640. Well, we closed not far off that already tonight. Then the biggest target would be 2900. Just about 2900, which is the 62% retracement, so you go 38, 50, 62. I'm not saying we do that, but those would still be targets.” On April 8th I did a slightly deeper diver into Fibbs: “I use Fibonaccis not because I believe in them religiously but I just find them a great guideline. …. it's a very dangerous bit between the 38% retracement and the 62% retracement. Generally, we can expect markets to bounce at least 38% of the original selloff and more likely 50% to 62%. We can actually compare it to pretty much all these big selloffs that we've had. 2015, 2016 saw, I think, around about those levels of 50%, 62% rebounds.” On April 9th I looked at comments from Mike Green: “What he's also saying is that the size of the response can be unlimited, and theoretically, it can. It's also why I said yesterday why I'm happy to wait out until I see a new all-time high in the equity market, which obviously a significant way above where we are. Because if we do, then Mike's absolutely right. Then in that Dr. Strangelove way, I'll come to stop worrying and come to love the Fed. Now, I don't know, my gut feeling is that the assumption from Mike is probably correct. That's another reason why here we are, we've got a 50% retracement nearly all these big selloffs get to 62. If we get to 62, I'll start thinking about being maybe shorting it or taking off some more equity, but I'll have tight stops and then if I'm wrong at 62, I'll wait for the all-time highs and I'll have a drink to Mike Green. His analysis would have been correct.”

I normally don't praise people for the sake of praising them. To me Roger H is the only who does a decent analysis in a concise manner. Most of the guests and hosts are just rambling for hours with the boring rants with no real substances!.

That's a very good response and journaling, Roger, and the interview also of course. Thank you very much. Idea to RV: as you are an education platform as well, could you consider laying out the framework's and processed of thinking on all your own specialists (and why not, the people being interviewed) and have a separate section on your website for that where people can easily go read them and LEARN. Similarly like Hedgeye has laid out its framework on its website. Currently, people have to dig up all the transcripts and comment sections across the whole site and go to historical shows etc just to understand how some person's framework is.

Apologies for the typos.

Thanks Stewart. Helpful. In your example, if the central had set the rate higher than 4% at the beginning, wouldn't the program manager have no projects to choose from that is profitable? Are you imagining that would force the manager to come up with something more creative project that could have higher than 4% return?

Spot on Satish. Yes, it works the other way too, within reason. A simple example of that was when Volker hiked rates to 20% in the early 1980s. This meant that there were very few new enterprises which it made sense to fund, and hence loan creation dried up and went into reverse. After this stagnation, only projects with high expected yields existed. As entrepreneurs did these projects, we saw strong nominal GDP growth following this in the 1980s.

Apologies, that should have read: Spot on Satish. Yes, it works the other way too, within reason. A simple example of that was when Volker hiked rates to 20% in the early 1980s. This meant that there were very few new enterprises which it made sense to fund at these high rates, and hence loan creation dried up and went into reverse. After this stagnation, and as rates began to fall, many projects with high expected yields existed as they had not been profitable when funded at 20%+. As entrepreneurs did these projects, we saw strong nominal GDP growth following this in the 1980s. A simple way of saying the same thing is that lowering rates brings forward not only consumption but economic opportunity too. Once held lower for longer, less economic opportunity will exist in the future.

of course I mean: CFTC Non-Commercial Net Long Positioning

Hi Daniel - S&P e-mini futures shorts have moved considerably higher - this move actually started after 24th March, (the day after the lows) and has increased as the market has moved higher. This would either be hedging of the gains as the market rises or playing outperformance vs long single stocks and ETFs. The fall in short interest was within prime brokerage (hedge fund) accounts. The upside risk is that these hedges could now be lifted.

I fully agree with you. 1 technical day would help so much. That we have a trader and tell us what we could expect in the week time. By the price. Because markets are not rational. Could you consider to do that? Have them in the team. For example Mish Schneider of the trader that you had in daily briefing a couple of weeks ago. He was the only person who predicted this.

They had Tony Greer on the April 24th daily briefing, from what I remember of the comments it did not sit well. But that might have been because he was predicting S&P going higher, which has happened. I also found myself disliking his views initially (as they were opposed to mine), but it was such an education to hear his psychology. So as a proxy for trader psychology in general it was a real window in to what is going on. After, by chance, I read Reminiscences of a Stock Operator. Then it all made sense. They helped changed my mind, and improved my ability to hear views I disagree with dispassionately. They also made me a little less prone to 'wanting' the market to do what it 'should' do. The market doesn't care. It does what it wants. I'd recommend both that episode and the book. Especially if we're now potentially entering the realm of an emotional market.

Hi Ida - the fiscal side is key and the one to watch. We are starting to see the optimism that was concentrated in specific parts of the US now spread globally (EMFX have also broken higher: the Brazilian Real, despite unrelentingly bad news and data, has also strengthened significantly). Partly this is because other regions, such as Europe, are starting catch up on the accommodation front. The US went fast and hard. Early on, their stimulus was 2x that of Europe. With these latest increases (E600bn extra from ECB, extra E132bn fiscal from Germany), Europe is getting closer to parity. The potential for the EU to launch E500bn of non refundable bonds could also help stabilize the outlook further. Globally, fiscal stimulus should be putting upward pressure on long end bond yields, versus the QE bid from central banks on the other side. Higher yields should help banks (though a small part of the DAX now) and insurers (a bigger element in the index). The DAX also responds to global growth as it is an exporter: auto, chemical and industrial sectors have a heavy weighting (about 40%). So, if yields are moving up because of better growth prospects (perceived or real) then the DAX will perform well alongside higher yields. Over the last 2 years, the DAX has struggled when China growth was on the back foot (mainly 2018) - therefore watching how US-China trade relations develop maybe key to DAX relative performance.

Thank you Jordan! It's the only decent blazer I own : )

Yea it will probably happen, so enjoy your northern hemisphere summer while the sun shines

What I see is data that says who is at risk, i.e. those over age 60 are 98% of deaths, the remaining 2% are those with comorbidity. But what I hear in the media is a narrative that we're all going to die. It's frustrating to have these two disjointed themes. I'm not concerned about a 2nd wave at all if measures are taken to protect those in the high risk groups. From what I understand about all viruses is we're all going to get them at some point.

Trump wasn't president and there was no CNBC in previous pandemics. He said its over, so it must be.

Nobody talks about the fact that S America is in winter now!! Totally agree with this. I've been think this too over the past few weeks

We're definitely not all going to die (of coronavirus). The true fatality rate is probably 0.5%-1%. If there is a serious second wave (seems likely) many places will go into lockdown again, and you can imagine the impact of that. If there are no lockdowns, imposed or voluntary, we could face breakdown of the medical system....which is why we went into lockdown in the first place.

red herring...irrelevant information