Divided We Fall, Weekly Wrap, 9/17-23/2017

Macro and Markets

The major economic news this week was the FOMC meeting whose statements on future rate increase and balance sheet reduction were on the hawkish side. Consequently, stocks and gold sold off. The gold COT showed a weekly decline although the price decline has been in place for over a week. Once started the decline tend to persist for at least 3-4 weeks and most likely longer in this cycle. We can now say that gold is in an intermediate decline that’ll likely last into late October. It has likely concluded or about to conclude A of an ABC down.

Over the weekend, the bombshell was not NK related but the feud between Trump and the sports leagues. Forcing businesses to take sides therefore alienating a large portion of their customer base will be utterly disastrous. No amount of tax cuts can off-set that. I’m relieved that NFL/NBA has taken the high road.

Reading the comments on Zerohedge & oh how I miss the old days where words were sharp but insightful & I couldn’t help but shaking my head. People who were advantaged by the electoral college system (as opposed to the population size) are blind to their disadvantages in economic power. If businesses were forced to choose, regional divisions aside, they will not come down on the side that technology advancement has left behind. The Civil War was won on economics, but of course certain people cannot be expected to know history. Let’s hope it does not come to that.

The market may start to worry that the tax cuts are in jeopardy. I say let’s get it over with, yeah or nay, and have the certainty that there is a lame duck President after just nine months. That’s all the certainty this market needs.

Cryptocurrencies

Prices still look to be in the downward channel since early September with ETH marginally stronger. Further thoughts can be found in the longer post I just completed.

Portfolio

On Monday afternoon I closed about 2/3 of my PM hedges at a spot price of $1307. I closed the rest Tuesday morning but should have kept them longer. I’m examining the circumstances around the decision on Tuesday to see how I can do better next time. The purpose of the PM hedges is to mitigate volatility and possibly enhance returns. Those hedges were quite profitable so met my goals in this regard. On Friday I rolled forward the ATVI puts at 65. I also picked up some SOXL.

Good Reads

None of the above is investment advice, the standard disclaimer applies.