Greg Blotnick – Sidebar

June 2017
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  • Greg Blotnick – MarketWatch – Hedge Funds February 9, 2017
    Opinion: Investors are dumping hedge funds just when they’re needed most – Greg Blotnick Hedge funds today are about as welcome as a stick in the eye. Endowment funds and pension funds are reducing allocations en masse in favor of indexing and private equity, as outflows reach levels unseen since the financial crisis. Harvard University… […]
    Greg Blotnick
  • Correlations have crashed January 24, 2017
    boon for stock pickers  (per MS) “CORRELATIONS HAVE CRASHED: Editors at Morgan Stanley won’t let analysts use the word ‘crash’ without a good reason and its best way to describe what has happened since election across globe…regional correlations, cross-asset correlations and individual stock and FX correlations have fallen simultaneously. That’s unusual; we haven’t seen a… […]
    Greg Blotnick
  • 1/11/2017 – Macro from RBC January 11, 2017
    McElligott on how “its all the same trade”: The US Dollar is the “grand unifying theory asset” for nearly any and all “profile” global macro or thematic equities trades in the marketplace right now, as it represents investors being long this “new” version of “economic growth.”  As such, performance is significantly tied to the direction… […]
    Greg Blotnick
  • Morning Markets – Dave Lutz – 1/9/17 January 9, 2017
    “Good Morning!   US Futures are starting slightly under pressure, confounding the peeps on CNBC wearing their Dow20,000 hats.   We have pretty much a sea of red across Europe, with the DAX off 55bp in a market that sees Fins and Energy lagging.  Multiple Italian banks are being halted limit down, hitting the MIB for 1.7%… […]
    Greg Blotnick
  • 2017 Forecasts – Stifel, Canaccord January 4, 2017
    Stifel: Our S&P 500 target is 2,400 in 2017 with no recession seen until late 2018 Our S&P 500 target is 2,400 in 2017 with no recession seen until late 2018. The S&P 500 continues to act as if Fed exit began in May 2014 during the QE3 taper and we expect the Fed to… […]
    Greg Blotnick
  • Wisconsin College Using Snapchat to Notify Students of Acceptance December 14, 2016
    UWGB adopts a new way to reach incoming students. Source: UWGB Using Snapchat to Notify Students of Acceptance
    Greg Blotnick
  • McElligott at RBC – Grossing Down December 13, 2016
    RBC Big Picture (Charlie McElligott) – DATA AND TRUMP KICKING-UP ‘ANIMAL SPIRITS,’ AGAINST SIGNS OF Y.E. GROSS-DOWNS –good commentary from Charlie at RBC: OVERNIGHT: Generally higher equities (Estoxx / DAX still holding at highs while Spooz dip ‘red’—highlighting the ‘relative value’ of EU equities against US as they break-out, see Mark Orsley’s piece today) and… […]
    Greg Blotnick
  • CS – “Sticking With Small Over Large” December 8, 2016
    Small caps set to benefit more under Trump administration tax rate the key driver (and lack of foreign revenue) IWM’s “have become a show me story. The main DRIVER supporting small cap is Economic Indicators & Policy, as small tends to lead when real US GDP is 2-3% range. Small caps also benefit from protectionism… […]
    Greg Blotnick
  • OpCo: Revisiting Yield Vehicles In Context of Rising Rates December 7, 2016
    Revisiting Yield Vehicles In Context of Rising Rates & Slower Replacement Cycle
    Greg Blotnick
  • Small caps saw the most PE expansion since April ‘09 – BAML December 6, 2016
    Small caps saw the most PE expansion since April ‘09
    Greg Blotnick

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In Defense Of Hedge Funds – Greg Blotnick – MarketWatch

Sourced from MarketWatch – Greg Blotnick

Hedge funds today are about as welcome as a stick in the eye.

Endowment funds and pension funds are reducing allocations en masse in favor of indexing and private equity, as outflows reach levels unseen since the financial crisis. Harvard University plans to fire half of its endowment staff and shut down its internal hedge funds amid underperformance.

While some of the disdain is deserved, there are a handful of misconceptions about hedge funds — particularly long/short equity — among the media and investors that are worth clearing up. The key takeaway is that redemptions are rising just as hedge funds are well-positioned to outperform. Long/short funds use leverage, derivatives and short positions in an attempt to make money in any market condition.

Hedge funds have been around since Alfred W. Jones first hung a shingle in 1952, but their popularity (as measured by assets under management) picked up in the 1980s and accelerated after the Nasdaq COMP, +0.21%  bubble popped in 2000. The zeitgeist of the era, as well as the “secular vs. cyclical” debate, is captured in historical articles by Forbes and our very own Wall Street Journal.

In the late 1990s, sentiment was poor following Long-Term Capital Management’s collapse in 1998 and became exacerbated as many funds underperformed during the meteoric stock market rise of 1999. A cyclical bottom was marked as industry patriarch Julian Robertson closed Tiger Management in 2000 — which was the second-largest hedge fund only three years earlier — just months before equities collapsed.

Also read: Nouriel Roubini’s Trump’s erratic, destructive policies could tank the markets and Victor Reklaitis’ Dan Loeb’s playbook for investment home runs in the Trump era

Long/short funds, as one would expect, trounced the market over the following few years, delivering 16% returns in 2000 with the S&P 500 SPX, +0.52%  down 9%, 5% returns with the S&P 500 down 12%, and minus 2% returns with the S&P 500 down 22%.

Sentiment began to shift, with the WSJ remarking in mid-2002: “Both the Dow industrials and the Nasdaq fell to fresh lows Friday, and given the performance, investors are hunting for places to put their money where it won’t evaporate. Hedge funds, on the surface, seem like a natural choice, given that they’ve outperformed the market for the last two years.” The industry’s assets under management grew 38%.

Three months later, the Journal noted: “Hedge funds are viewed as a way of making money even when stock prices are in decline, making them particularly attractive to some investors now.” A similar dynamic played out after 2008 as long/short equity funds returned minus 12%, lower than the S&P 500’s minus 37%.

So even professional investors and allocators suffer from recency bias — people most easily remember something that has happened recently — and think to add downside protection only after a stock market crash. We are seeing the inverse of that today.

In this long bull market — which turns eight years old next month — hedge funds by nature will underperform, yet investors continue to benchmark performance as upside capture versus the S&P 500 — which is a misunderstanding of how most long/short funds operate. The product writ large is designed to reduce a diversified portfolio’s correlation to the market, lower standard deviation (thus increasing a portfolio’s Sharpe ratio) and ultimately deliver long-term returns in excess of the market. Investors today are redeeming money from long/short funds when those investments are likely to be needed most.

Greg Blotnick is a long/short equity analyst at a private investment firm covering consumer, TMT and industrial stocks. Blotnick has spent his career in the asset-management industry and served as a fundamental analyst for former multi-billion dollar hedge funds. He holds an MBA from Columbia Business School and is a CFA charter holder. Follow him on Twitter at @Greg_Blotnick.

Trump’s First Week (1/24/2017)

FIRST WEEK–While Industrials off only small, Russell getting hit for 30bp as the $ falls on “America First” angst.   FT notes[] weekend headers “do not encompass actions which financial markets have been hoping will [be] giving the economy a boost, but rather the array of negatives which the rest of the world fears and the more circumspect financial market participants have highlighted”.

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 FX Angst from the Inaugural protectionist tone has the DXY on 6week lows – Pound hits five-week high as PM May prepares to meet Trump Friday – Mexican peso touches two-week high, while the Turkish Lira slides into their Central Bank call tomorrow.  With the weaker $ – Base Metals rallying with Gold hitting two-month highs

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U.S. hoteliers have reported seeing a decline in bookings from European travelers heading into 2017 and are looking to explain what has caused the drop – Possible factors include[] economic uncertainty in the continent, coupled with a new U.S. president who is unpopular in several European countries. But it’s hard to say what combination of things, if any, is keeping Europeans away.

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Just two days after taking office, Mr. Trump said he would follow through[] on plans to renegotiate the North American Free Trade Agreement, or Nafta, the two-decade-old deal that binds the U.S. economy to Canada and Mexico.  Mr. Trump’s advisers are considering pressing for changes to Nafta’s rules for the auto industry in ways that would require more of a car to be produced in North America and could possibly mandate that a significant portion of vehicles be produced in the U.S. in order to be shipped around the bloc duty free, according to two people familiar with the plans.  The Mexican Peso has been a ‘Buy the News” since the Inauguration

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Jittery Indian IT cos watching keenly as Trump takes charge[] – Given that US market accounts for 60 per cent of India’s IT exports, the industry and the government here will spare no efforts in their outreach program over the next few weeks to showcase the role of Indian technology sector in making the US economy more competitive – INDA, the India ETF, looks like it is rolling abck towards $26

Greg Blotnick – Reversal of Trump Trade

Commentary Per RBC Capital

Commence ‘pain trade.’  Let us begin today by taking it back to last Wednesday’s now-prophetic “RBC Big Picture” note:

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“Fundamentally with the USD bull-case, this is a large part of why there is SO much focus on key items like the border-adjusted tax element of the Trump policy push.  A large part of the Dollar’s strength (beyond ‘just’ the data) post- the election has been based upon this, where if the corporate tax rate were cut to say 20%, the Dollar would by economic theory have to then appreciate 20% (and of course too, an additional ‘tax factor’ driving the USD bull-thesis is that a meaningful chunk of $2.5T of profits held overseas by US corporates would be repatriated following a ‘business friendly’ incentive package / one-time cut to the repatriation tax to say 8-10%).


There is a view though within some verticals of the business community is that the border-adjusted system represents a very significant risk (consumer retail most notably) to their businesses / the broad economy as imports become more expensive and will create trade distortions (while the CBO itself says that the border-adjusted system would NOT reduce the trade deficit, which is a driver of its political popularity).  There is so much discourse on this issue currently on this topic within the C-suite in fact some in policy circles are now saying they believe it appears increasingly likely that the ‘full’ border tax adjustment (currently in the Houses’ version of the bill) ends up being watered down to a sort of “relocation penalty” (which would likely then appear in the Senate-version of the bill).


Again, this is all a hypothetical, but if some of this ‘sense’ around said USD ‘bull driver’ turning potentially bearish was to ‘leak’ into the market, it would take some of the air out of the “long USD” trade–and that is where things could go off the rails.  If the Dollar broke lower, its likely too that bonds and duration would rally; defensives (staples, utes, reits) and growth (tech / biotech / discret) squeeze against crowded value unwinding (fins, energy, indus); yen and euro would squeeze mightily; gold squeezes while copper pukes in a favorite commodities ‘pair’ unwind; HY could reverse weaker vs IG (currently everybody long CCC vs BB on the high beta trade)…this would be the theoretical path to our next pain-trade or even VaR shock.”




Overnight, we see that Donald Trump has indeed talked-down the BAT, criticizing it in the WSJ as “too complicated” and stating that the US Dollar is “too strong.”  With this confirmation that the Trump administration is indeed backing-away from the BAT, we see USD smashed-lower against all G10 and all 24 EM currencies, with the Bloomberg USD Index down 1.1%, a 2.5 standard deviation move (relative to the past year’s historical returns).


As such, expect there to be significant buy-side performance pain today with regards to the below key “long USD”-linked “US reflation” trades (as quoted above) seeing real capitulatory / unwind flows:


  • UST complex ripping / curve bull-flattening (2s10s -4.3bps)
  • Massive squeezes in Yen, Euro and EMFX as stop-losses are triggered.
  • CNH coming unglued -1.0% and through the 6.80 level
  • Russell-minis and Spooz spanked to session lows currently
  • EU heavy cyclicals like metals & mining -1.7%
  • EU Xover CDX seeing its largest widening day of the year
  • Gold squeezing higher +1.3% while Copper is being crushed -2.1%
  • VIX ripping / squeezing +12.9%


Per the tea-leaves from Kristen Arey’s CFTC positioning update Friday night, the focus of the pain will come from leveraged funds and their FIC shorts, as the already record shorts in FV and ED grew even-further to NEW record shorts.  This is going to leave a mark, and recall the point I’ve been making on said short—all of the positive PNL from this trade was last year, meaning that chief risk officers are going to be that much quicker to ‘tap out’ on these significantly underwater shorts just 2 weeks into the new year.  Also worth noting that the 14k new VIX shorts added last week will likely be stopped-out.


Upon the US equities session, expect more of the same—‘value factor’ / cyclicals (ex energy which benefits from crude / Dollar relief) are likely to be underperforming defensives / anti-beta / bond proxies, as “long duration” will see major outperformance as per the UST-move.  Expect ‘growth factor’ to see some ‘haven’ status gains too (tech, cons discret) as the January factor mean-reversion should run-further.

Hedge Fund News 1/11/2017

Downward Trend for Fees Seen Accelerating
Hedge fund fees, which have come down only marginally despite years of investor push-back, are set to fall hard and fast.

That’s the consensus among industry professionals who participated in Hedge Fund Alert’s annual outlook survey. By a wide margin, respondents predicted average management and performance fees will decrease “appreciably” over the next three years — with a number pegging the new norm at about 1% for management and 10% for performance, versus the traditional 2-and-20 structure. The survey, conducted in November and December, captured the views of 78 hedge fund managers, investors and service providers. Blue-chip fund operators that continue to meet investors’ performance expectations will remain largely insulated. But most others will have little choice but to slash fees if they hope to retain limited partners and attract fresh capital.

Banner year:

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Greg Blotnick – What Traders Are Watching 1/6/2017

Greg Blotnick – WTAW – per Dave Lutz

YUAN RIPS– China strengthened the renminbi’s trading range on Friday by the most in more than a decade[] as investors awaited data expected to show Beijing is continuing to burn through its reserves to support the currency.  Following the biggest two-day surge in the offshore version of the renminbi in history, the People’s Bank of China on Friday fixed the midpoint for the onshore market 0.9 per cent stronger at Rmb6.8668 per dollar, the biggest rise since unpegging from the US currency in 2005.

Goldman Sachs advised clients[] that the best times to bet against the yuan have tended to be after interventions that flushed out bearish positions, or when China concerns were off traders’ radar screens.

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The cost for banks in Hong Kong to borrow yuan from each other overnight soared to 61.3% on Friday, the highest since Jan. 12, 2016[].  To bet on a drop in the yuan, investors often “short” the currency by borrowing yuan in Hong Kong, swapping them for dollars and later swapping them back at a more favorable rate. As the cost of borrowing yuan rises, so does the cost of that trade. That can force investors to buy back yuan in Hong Kong, driving the currency higher[].

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The Chinese government is due at the weekend to release data on its December foreign exchange reserve holdings[]. November’s fall of $70bn in the total — the largest in 10 months — was seen as a sign of rising outflow pressures and sparked debate about how much the PBoC was prepared to burn through to slow the renminbi’s slide.  Bitcoin has been slammed for 17% in the last 2 days on the squeeze

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All eyes are on[] China’s foreign-exchange holding data tonight, which will update with last month’s figures on Jan. 7. If they drop below the psychologically-significant $3 trillion threshold, the currency would come under further pressure.  Analysts at Bank of America Merril Lynch expect reserves to dip to $3tn, a drop of $25bn in December – “China can clearly prevent people shorting its currency but can only do so as long as its still large FX reserve pile lasts” said Rabobank[].

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Lotta guys are short the Chinese ADRs as a proxy for being short the Yuan.   JD, NTES, BABA, TAL all ripped higher on the Yuan move.    Chinese Internet Names up ~400bp on average yesterday.  Good timing for MS to do a quick spot secondary in JD.  KWEB, The Chinese Internet ETF, has leapt 6% in last 2 days to the 200dma,

EMPLOYMENT!Today is Jobs Day, and after ADP / ISM Employment yesterday – expectations for a miss are ramping.  Economists forecast a net gain of 183,000 jobs and an unemployment rate of 4.7%.  “The only reason to expect less than 210,000 [on Friday] is that it’s getting harder and harder to find people to fill the positions that employers have open. It’s a supply issue, not a demand issue,” said analysts at DBS.

Greg Blotnick – What Traders Are Watching 12/12

Gregory Blotnick – What Traders Are Watching: 12/12/2016 Abbreviated format this AM.   Running off to PT – Back by 8:30.

“What Traders are Watching” – Gregory Blotnick 12/12

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OIL HIGHER – Gregory Blotnick 12/12– Over the weekend, a group of heavyweight producers outside of the Organization of the Petroleum Exporting Countries, including Russia, agreed to scale back their output by 558,000 barrels a day[]. The move would come on top of the cut of 1.2 million barrels a day agreed to by OPEC in late November. The total reduction represents almost 2% of the global supply.

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The market got an extra boost of confidence on reports that Saudi Arabia indicated that, if necessary, the kingdom may be willing to take a deeper cut than the 486,000-barrel cut it had agreed in the November meeting – All Eyeballs on[] the inverse “Head and Shoulders” formation in WTI

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 Twitters note[] that Russia being named to monitoring committee increasing the probability of compliance

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The weekend’s Oil deal “clearly is going to secure inflationary pressures” going into the first quarter of 2017.  JGB’s say their 10YY go to 7bp, while Bunds and Treasuries are getting hit across the board, with heavy steepeners going thru

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Maybe Oil Likes Rex? – Trump’s top candidate for chief diplomat is uncompromising Texan[] – A broad-shouldered, plain-speaking Texan engineer, the 64-year-old Mr Tillerson has led Exxon since 2006 and worked at the company for 41 years. His character and the company’s reflect each other: highly competent, intellectually rigorous, but also often inflexible. He is not a polished diplomat. But he has been an effective negotiator, and has maintained and developed Exxon’s relationships with resource-rich countries all over the world.

CHINA WHACKED– China stocks suffered their biggest fall in six months on Monday as blue-chips were knocked by fresh regulatory curbs to rein in insurers’ aggressive stock investments[], while rising bond yields prompted profit-taking in equities.  China’s insurance regulator, which recently warned it would curb “barbaric” acquisitions by insurers, said late on Friday it had suspended Evergrande Life, the insurance arm of China Evergrande Group, from conducting stock market investment.

That hit the market hard as insurers’ relentless buying in modestly-priced industry-leading blue-chips was one of the main drivers behind the recent strong advance in the market.

WATCH UNICREDIT– UniCredit SpA agreed to sell its asset-management unit Pioneer Investments[] to France’s Amundi SA for €3.88 billion ($4.10 billion), bolstering its capital buffers as it tries to meet tougher new banking regulations.  The sale of Pioneer, which manages assets worth €225.8 billion, is part of a broader plan that UniCredit is set to announce on Tuesday to strengthen its finances.

Italian bank stocks are rebounding on Monday morning after Paolo Gentiloni was appointed[] as the country’s new technocratic prime minister in an effort to ensure a quick solution to the country’s current political crisis.  The FTSE Italian Bank Index has gotten upside 200dma, and feels like tomorrow could spark a huge cover event

Monte dei Paschi pushes on with capital plan to avoid state recapitalization – The Italian bank will up its efforts to woo investors into a debt-for-equity swap this week, as it looks to attracted the €5bn needed to avoid a state bailout that would result in serious losses for its bond and shareholders. Monte’s Debt has clawed back ½ of Friday’s losses

FED AHEADOn Wednesday, there will be particular focus on the Fed’s new “dot plot”[] — a map of where individual officials project the Fed funds rate will be in the next three years.

It “could give us a first look at FOMC members’ true thoughts on whether they feel that the fiscal policy initiatives announced by the new US administration will boost the economy in 2017 or whether they have concerns about the adverse impact of trade policies on the US economy”

December’s option expiration has a bullish history. In fact, the week of options expiration and the week after have the most bullish record of all Triple Witching expirations, AlmanacTrader reports[]


BIDDING WARS– President-elect Donald Trump has two major changes[] affecting multinationals under his tax reform agenda. First, he wants to cut the corporate income tax rate from 35 per cent to 15 per cent.  Second, he wants to introduce a special corporate tax repatriation holiday rate whereby corporations with money stashed overseas would be able to pay a tax rate of just 10 per cent on that income in order to bring it back into the United States.

Tax experts have already warned this could usher in tax revenue wars.  KPMG said countries that do not cut their tax rates would be “outliers” and this would have a negative impact on their economy.  KPMG chairman Peter Nash said we could see “bidding wars” between nations to attract investment

Greg Blotnick – Investor Positioning and Equity Funds

Two articles I wrote for blogs – along with more articles on Greg Blotnick’s SeekingAlpha and answers on Gregory Blotnick’s Quora

Short Selling In A Bull Market – Common Mistakes In Security Selection

Greg Blotnick – negotiating fees with your financial advisor

Equity funds raise exposure to overweight as election polls shift

Equity funds raise exposure to overweight as election polls shift:

Historically, close elections have seen a rising uncertainty premium & equities flat in 4 months leading up to the election, followed by a 5% rally. However in last 2 weeks, polls have moved sharply in favor of Hillary Clinton, while those favoring Republicans to retain control of House have also edged up again after a small pullback. Polls are thus pointing to a continuation of the political status-quo which combined with already positive data surprises and a strong start to the Q3 earnings season has seen US equity funds raise their exposure to overweight.

Equity funds raise exposure to overweight as election polls shift

Rising active equity fund positioning offset by continued outflows but demand-supply balance to improve after earnings blackout:

Even as active equity funds have raised exposure, end investors have continued to pull money out of developed market equities despite positive data surprises in the US & also in Europe. The demand-supply backdrop for equities should improve however, as an increasing proportion of companies exit buyback blackout periods after reporting earnings.

Rising active equity fund positioning offset by continued outflows but demand-supply balance to improve after earnings blackout

Third straight week of outflow from defensive bond-like equity funds:

The $3bn outflow in the last 3 weeks is the largest in over a year but still a small fraction of the cumulative inflows of $50bn ytd and over $180bn since 2010.

Large outflows from money market funds beyond prime-government fund rotation:

While massive rotation in flows within MM funds out of prime & into government funds has been in spotlight, there has also been a large net overall outflow. These outflows go against typical seasonality which points to strong inflows in 2nd half of the year. With equities seeing persistent outflows & bank deposits flat over the last 2 months, the outflows from money market funds are benefiting fixed income funds.

Large outflows from money market funds beyond prime-government fund rotation

Active managers in fixed income markets positioned for a rate hike but bond funds continue to get inflows:

Aggregate positions in bond futures are extremely short while shorts in Libor rates futures are also at 2 year lows. Across maturities, futures positions are already very short in long-dated bonds & in the 5y & have fallen to neutral across the rest. Active bond funds have largely outperformed with rising yields over the last 3.5 months & look to be underweight duration & overweight credit. Solid inflows into bond funds have continued, mainly benefiting credit while government bond funds are seeing outflows.

Active managers in fixed income markets positioned for a rate hike but bond funds continue to get inflows

Dollar creeps higher as long positions rise:

Rising Fed rate hiking expectations have seen dollar moving higher. The dollar is now 4/5th of the way up flat range it has been in over last 21 months, accompanied by rising long speculative dollar positions. Short positions have risen across most other currencies, led by the euro and the pound while yen longs have fallen. Mexican peso shorts however have fallen sharply in the last two weeks.

Dollar creeps higher as long positions rise

Oil prices now more than 30% overvalued, at extreme of historical valuation band , as long positioning jumps to record highs:

Oil prices are now more than 30% above our estimate of fair value based on dollar & global growth, a level of overvaluation that has marked historical extremes. The strong rally has been accompanied by net speculative long positions rising to new record highs as gross longs rose to extremes while gross shorts fell sharply. Oil long positions are worth over 7 days of global oil production, a record high, & have also disconnected from their earlier tight relationship with dollar longs. History suggests that multiple channels of linkage between dollar & oil will re-assert themselves & see prices converge.

Oil prices now more than 30% overvalued, at extreme of historical valuation band , as long positioning jumps to record highs

To know more check out this PDF and get more details on this.

Greg Blotnick – Columbia Business School

Greg Blotnick’s Columbia Business School website for Cluster X 2014 Alumni

Greg Blotnick - Columbia Curl

Greg Blotnick – The Columbia Curl

Thoughts on Markets 10/19/2016 – JonesTrading

Good Morning!  US Futures are mixed this AM as Earnings continue to roll (INTC getting clobbered) and China GDP on target with 6.7% growth.   Euro Markets are mostly red, with the DAX off 10bp as only Consumer Discretionary seems to be well bid in Germany.   Italy is outperforming on Monte Paschi headers – the only exchange in the green.   UK is getting hit for 10bp as UK Builders under pressure on Travis Perkins and Consumer from Reckitt’s #s.  Volumes across Europe are light, with most echanges 10-20% below Trend.

Thoughts on Markets Deux:

The Dollar is backing off 7month peaks as Fed fund futures around a 65% probability of a move, down from 70% pre CPI yesterday.  The Euro is a bit weaker ahead of ECB tomorrow – while $/Y is breaking lower quicker as headers say BOJ “No Additional Easing” roll.   The US 10YY had a test and bounce off the 200dma overnight as Investors put in for the Saudi Bond Deal.  Metals are mixed, with Gold enjoying the falling $, while Nickel gets whacked for 1%+.  WTI has shot back above $51 as the Saudi oil minister calls an end to price ‘downturn’ and a Huge draw in API inventories support WTI into expirytomorrow.   Natty gas is getting whacked for almost 2% tho.   Softs are weak across the board.

We have a heavy slate of Catalysts today, with Housing Starts and Building Permits for September along with Weekly Jobless Claims at 8:30 – Fed’s Williams Speaks in New Jersey at 8:45.  At 9:50 we get the Bank of England Bond-Buying Operation Results, just before the Bank of Canada Rate Decision at 10.  10:30 brings that DOE data for Crude.

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Thoughts on Markets Three:

Chinese GDP 6.7% yoy 3Q flat vs Q2. We revise GDP growth to 2016e 6.7% yoy (was 6.4%) & 2017e 6.6% yoy (was 6.5%). We lift CPI inflation 2016e  2.0% yoy (was 1.8%) & 2017e 1.6% yoy (was1.3%). China’s September money & credit data > expectations. IP growth 6.1% yoy in Sept < expected vs 6.3% in August.