Capital Trading Group

Alternative Investments within Managed Futures

Knowledge is the True Freedom

Posted by Capital Trading Group on Jul 3, 2018 1:44:41 PM

Statue of LibertyHappy 4th of July everyone and what we have seemingly been accustomed to by now, is the fact that holiday’s that come mid week, seem to wipe out the whole week in terms of productivity. Anyway for the United States, July 4th is the iconic symbol of national independence as it commemorates the signing of the Declaration of Independence in 1776. Despite being voted and signed on 2 days prior, we celebrate it on the 4th, maybe because that’s when the documents actual wording was approved. Anyway, speaking of wording, it seems as if the Preamble has been thrusted to the forefront with the election of one Donald John Trump. We highlight this part of the Preamble as being most relevant in describing the new administration from those prior,

“That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

 

QanonFor those that haven’t heard of “Q” or Qanon, we highly suggest you research it. This movement that has been ongoing behind the scenes is formidable and has gained a huge following not just here, but globally. Many main stream publications have come out denouncing, discrediting and mounting a clear disdain for any such conspiracies, but we know better. We know that there is always truth to something, especially something this large. We only mention this because it does effect business, it does effect markets and in life, knowledge is the true freedom. So let’s just say, we want you to know so you aren’t surprised. If you want to know more about it, @Prayingmedic on twitter is a good place to start. We will leave it at that.

 

What's your privacy worthIn other news, we thought it interesting that Facebook’s, submittal to congressional hearings follow up questions, some 2000 or so, exposed the fact that it continued to share data even after they admitted to such. Facebook continued to share data with 61 hardware and software makers as well as app developers even after the 2015 admission of sharing data and after they had said it cut off third party access. (thehackernews.com)

 

Reminbi ChartThe financial markets continue to exhibit worry about fed rate hikes, yield curve flattening and of course impending trade wars via tariffs. Speaking of trade wars, lets take a look at the Yuan shall we, as you can see, its been weakening ever since things began to heat up: (chart courtesy of CQG and Keystone charts)

 

 

Gold_CNHWe know the Chinese are in a mad scramble to try and dedollarize but we tend to think those efforts are fleeting and we don’t think this is what they had in mind when converting into gold, as you can see both the Yuan and Gold losing ground, aka double whammy:

 

Who say’s you can’t win a trade war. Most don’t realize but the US is in a very formidable position right now globally. Many disagree with this notion, but we tend to think that Trump will never negotiate from a position of weakness. Many don’t know but his uncle John, in which he is named for by middle name, was president of MIT. Word is his uncle also possessed all of the great Nikolai Tesla’s files, God only knows how much data was extracted from that vast and profound knowledge base. Needless to say, we don’t envy the rest of the worlds position.

Top Oil ReservesHas anyone thought why the hell has crude oil performed so well??? How much is America now producing? How much do we sell? The US sells nearly 10.6 mln barrels per day, second only to Saudi Arabia, so where is the petro dollar and weak dollar correlation again? Anyway, through our research and what we thought was strange is that, Venezuela has by far the largest oil reserves in the world, nearly 14% more than Saudi Arabia. Maybe this is why the country is so destabilized, how the hell can a country like this with all this wealth, be so maligned, so malfunctioned and mismanaged? Considering it is a federalist set up on the forefront, but dictator presidential rule on the backside, maybe this has something to do with it. Maybe they should just link their currency to oil through the blockchain and then will the realize their power…just saying.

 

WTI vs ES ChartSpeaking of oil, here is a chart from Keystone charts once again, pointing out the strength of oil even versus that mighty SP500. You can see the target resistance line, we are getting close, so perhaps some profit taking will hit the sector given such a locale.

 

 

 

Moving back onto the China-US theme, when we look at the Shanghai Composite, we can’t help but think the SP500 will play catch down here as this entire year, the SHComp has underpriced the SP500 and the divergence has grown quite wide over the last month:

Shanghai Composite vs SPX

 

Central Bank QE

Then again, we all know there is a willing and able PBOC, BOJ or ECB to back stop any formidable attempt to dump their wealth generating mechanism. In fact all this talk of the US tightening is just not valid in the larger central bank global scope of things. Here is a good chart showing how much tightening is not going on, perhaps on a relative basis but overall, we are still net QE $290 billion.

 

So where is all this QE going again? Well to a shrinking pie and of course PE and M&A. The WSJ ran a good article highlighting the fact that 2018 is on pace for record global deal volume:

Mergers and Acquisitions Worldwide

In other news this week, Amazon bought online pharmacy PillPack Inc. for $1 billion in cash. This deal should worry the likes of CVS and Walgreens, as Amazon continues to create the one stop buy everything you need conglomerate. Seems a bit antitrust like, but we know that will never happen, even if Trump does talk a tough game.

 

            Let’s take a look at the futures settles for Friday June 29th  Crude Oil has been the standout, up some 25% on the year and up 17% last quarter alone! Natural Gas was up 7% last quarter as well, the Russell 2000 was the best equity performer edging out the Nasdaq, up 10% and 8.7% respectively for Q2. We don’t follow OJ but it was a standout for Q2 up 20%:

US Futures Markets-1

 

SP 500 Weekly Close Only

We would like to highlight the SP500 weekly chart of raw data and a simple 7 period Moving Avg. this weekly close should see follow through this week if we can’t trade above the 2750 area.

 

 

 

The Crypto Currencies were once again bottom fishing but it seems as if the momentum has slowed and that a bounce was in order. This did occur over the weekend but here are the closes for Friday:

Crypto Currency Corner

 

We highlighted a chart on Friday of Monero as we saw a nice bounce on Friday and they were actually up 8% last week:

 

Monero

As far as our CC Index boring to lower is how we can explain it, although with the weakened momentum we may be gearing up for a nice summer bounce. As many know the ecosystem continues to grow and we are more than bullish:

CryptoCorner Index

 

FashionistaJust to reinforce our two-tiered economy once again, what has become the obvious theme of who truly benefits from QE, we have these headlines, first up, H&M, who’s tag line is “fashion and quality at the best price.” Well we suppose you can keep dropping prices, because if there isn’t discretionary spending at the lowest levels, then demand sinks, inventory’s rise and as for profit:


Gucci and YSL record growth

As far as the luxury brands, well considering the disparity in income, this shouldn’t come as too much of a surprise. Moët Hennessy Louis Vuitton SE or what it is commonly referred to solely as Louis Vuitton or LVMH posted RECORD 2017 revenue, so too did Kering group better known as Gucci and YSL:

Ok that’s it for this week, we hope you enjoy some parades, some outdoor fun and some intriguing local conversation, we know we will. Cheers!

 

 

 

 

Capital Trading Group, LLLP ("CTG") is an investment firm that believes safety and trust are the two most sought after attributes among investors and money managers alike. For over 30 years we have built our business and reputation in efforts to mitigate risk through diversification. We forge long-term relationships with both investors and money managers otherwise known as Commodity Trading Advisors (CTAs).

We are a firm with an important distinction: It is our belief that building strong relationships require more than offering a well-rounded set of investment vehicles; a first-hand understanding of the instruments and the organization behind those instruments is needed as well.

Futures trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Futures trading is not suitable for all investors.

Nell Sloane, Capital Trading Group, LLLP is not affiliated with nor do they endorse, sponsor, or recommend any product or service advertised herein, unless otherwise specifically noted.

This newsletter is published by Capital Trading Group, LLLP and Nell Sloane is the editor of this publication. The information contained herein was taken from financial information sources deemed to be reliable and accurate at the time it was published, but changes in the marketplace may cause this information to become out dated and obsolete. It should be noted that Capital Trading Group, LLLP nor Nell Sloane has verified the completeness of the information contained herein. Statements of opinion and recommendations, will be introduced as such, and generally reflect the judgment and opinions of Nell Sloane, these opinions may change at any time without written notice, and Capital Trading Group, LLLP assumes no duty or responsibility to update you regarding any changes. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Any references to products offered by Capital Trading Group, LLLP are not a solicitation for any investment. Readers are urged to contact your account representative for more information about the unique risks associated with futures trading and we encourage you to review all disclosures before making any decision to invest. This electronic newsletter does not constitute an offer of sales of any securities. Nell Sloane, Capital Trading Group, LLLP and their officers, directors, and/or employees may or may not have investments in markets or programs mentioned herein.

Topics: Crude Oil, facebook, flattening yield curve, global trade war

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