How can you just leave me standing?
Alone in a world so cold? (World so cold)
Maybe I'm just too demanding
Maybe you're just like my mother
She's never satisfied (She's never satisfied)
This is what it sounds like
When doves cry
Janet Yellen could not have been more doveish yesterday.
In what was effectively a sharp rebuke of the recent speeches by Fed hawks, the Fed Chairwoman talked down the economy, pointed out global weakness and other potential dangers that will, if nothing else, keep the Fed on a very slow path towards raising rates. Some Fed watchers thought Yellen's message was murkier than usual and raised doubts about the central bank's forecasts and monetary path.
"Janet Yellen gave her audience limited lip service to 'baseline' projections and expectations for dual mandate improvement and rate normalization, but carpet-bombed her audience with possible downside caveats. In so doing, she created the distinct impression that she had little confidence in the Fed's baseline outlook," wrote Ward McCarthy, chief financial economist at Jefferies, in a note.
As Dave Fry notes: "Fed Chair Janet Yellen has it both ways—she continues to suggest U.S. economic growth is “solid” but says global growth is weak (China) hence, raising interest rates will be measured or slow. This is mana for bulls which then means bulls can play and so too can other markets. Since growth is slow, even in the U.S., this is the cover the Fed has to please Wall Street, voters and bulls.
"Who is she kidding? No matter the contrived BS bulls now can assume the recent recovery rally was well-known by insiders on Wall Street. We have some substantial positions in stocks since tape action is the discipline we must follow even as we rage against obvious dishonesty and the machine. The assurance of lower interest rates also benefits commodities with commodities overall especially gold but not crude oil, at least this day."
That's the page we were on in last week's Live Trading Webinar (replay available here if you can't afford a live feed), where we went long on Silver Futures (/SI) and, as you can see, we're already up $2,150 on 4 contracts and we'll take 2 off the table here ($15.35) and put a stop on the 2 remaining at $15.29 to lock in most of our gains. Congratulations to all who played!
That Natural Gas (/NG) trade we discussed in yesterday's post has doubled this morning, to almost $3,000 in profits at $2.24 and that's our goal, so we're done with those entirely for now. That brings our Futures gains on last week's Webinar up over $5,500 – not bad for a week's work!
Natural Gas is our Trade of the Year and we're using the ETF (UNG) to make our long-term play – the Futures trades are just a bit of fun while we wait. Since we are watching /NG Futures anyway, we may as well pick up a bit of extra cash as they bounce around within our range.
In general, we're leaning towards using this FREE MONEY rally to lighten up our portfolios. None of the macro fundamentals have changed – this is just another shot of adrenaline getting a twitch out of a comatose economy – nothing more – especially on the global scale:
- Japan's Industrial Output Falls as Weak Exports Sap Demand
- Even BOJ Has Limits as Central Bank Balks at Minus 0.6% Yield
- China's Large Banks Wary on Li Keqiang's Plan for Bad Loans
- China's True Demand For Copper Is Only Half as Much as You Think
- It's Worse Than 2008": Toronto's "Condo King" Weighs In On The Death Of Alberta's Housing Market
- Fitch Downgrades Chicago After "Worst Possible Outcome" In State Supreme Court Pension Reform Bid
- Rail Traffic Volumes Tumble As Coal Stockpiles Soar At Record Rate
- Donald Trump rescinds pledge to support eventual GOP nominee
- MSNBC Host Admits Democratic Primary Rigged, While Station Simultaneously Rigs Coverage
That's just this morning's headlines and no, I didn't skip the good news – there wasn't any – other than a nice, old lady who says she will always give us free money, we just have to join her in her candy house in the woods – what can possibly go wrong!
"In the past, she and I might have looked at a glass of water and disagreed about whether it was half full or half empty," wrote Amherst Pierpont's chief economist, Stephen Stanley. "Today Yellen took the partially full glass and dumped most of the water out and defiantly declared the glass mostly empty. Her assessment of the economic and policy outlooks is well out of step with most of her colleagues on the FOMC as well as most private sector economists."
CASH!!! Is my play for today. You can get a lot of it for your stocks today and the Dollar is low (95), so you get a bonus when it bounces back in June when the Euro collapses!
