Capital Trading Group

Alternative Investments within Managed Futures

Interpreting Fed Speak & FOMC Projections, Crypto Craze and Repeal of Net Neutrality

Posted by Capital Trading Group on Dec 21, 2017 8:53:24 AM

Last week saw the final Fed meeting of 2017 and the final meeting with Janet Yellen as chair.  The FED raised rates another 25bp to put the top end of the Fed Funds range up to 1.5%. This move was widely expected and priced into the markets.  Here are the headlines:

  • FED SEES FASTER 2018 GROWTH
  • LABOR MARKET STAYING STRONG
  • MONTHLY BAL. SHEET RUNOFF TO RISE TO $20B IN JAN.
  • Median dot plot for 2020 rose to just over 3% for Fed Funds level
    (What policy makers think is coming in the future)

 

Yellen doesn’t feel that the equity markets are flashing any warning signs and doesn’t feel that the markets exhibit levels one would deem “frothy.”  Even though she didn’t use specific fundamentals or none at least that we can understand, it seems as if the FED simply views the upward move in the markets as “Job well done! Job well done alright, it only takes roughly $2 Trillion a year of increased global debt to keep this linear pig going, but who cares about debt, right? 

 

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Artificial Intelligence is Supplanting Humans

Posted by Capital Trading Group on Dec 13, 2017 11:59:16 AM

     What a week for Blockchain, that’s all we can say.  For all the hoopla circulating around the introduction of Bitcoin futures and all the endless blather of uncertainty, we feel that the CBOE futures came and went without a whimper.  The CBOE site was down for a bit, but overall the trading of Bitcoin futures, had zero effect on the overall Bitcoin price.  As we have stated for quite some time, Bitcoin should never be confused with any derivative, nor should any of our readers be confused about what we refer to as Bitcoin. 

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Something New And Profound Is Upon Us!

Posted by Capital Trading Group on Dec 7, 2017 10:47:43 AM

Last week was highlighted by the big hoopla about the big unveiling and roll out of the Trump tax plan. We can hardly stand the anticipation, speculation, Dems bipartisanship, yadda, yadda, yadda. The only real question is how much pork is Wall Street being served up and how far in debt does the country have to go to appease these corporate overlords. So they want the 20% rate or lower which we all know transcribes to a near sub 10% effective rate, really? Then there’s the issue of a pending government shutdown, which will no doubt-ably be averted last minute with a strong kick of the debt can down the road. Anyway the equity markets were whipsawed with the SP500 putting in a rarified 2% move in about an hours’ time on Friday. A rare increase in volatility, we are surprised the bots recovered. The NASDAQ market seems to have already started to roll over and seems to be having difficulty holding the 6400 level.

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The Arms Race: Bitcoin and the S&P 500 Index

Posted by Capital Trading Group on Dec 1, 2017 2:35:23 PM

We hope that you had a wonderful Thanksgiving and that the conversations were as off the cuff as ours. We decidedly opted to listen more than opine as we ingested not only too much turkey but certainly a fair amount of economics and far too much Trump speak, especially from our millennials in attendance. What we didn’t find surprising was the questions about bitcoin and crypto currencies. We didn’t even hear the word bubble, but rather more inquires and questions about the technology in general. The common thesis seemed to be, which one is still a buy the SP500 or Bitcoin? Well our readers certainly know where we stand and we were reluctant to withhold such a formidable position from our willing audience. Our initial explanation stuck right with the technological advancement and its possibilities, not merely estimating future valuation, but rather predicting an exciting arms race in the industry. Maybe that’s the wrong euphemism considering NK is up to their old nuke launch tests. Speaking of, we haven’t quite figured out their motive, but we are certain there is more than meets the eye. Something just doesn’t smell right, for what does NK have to gain in relation to what they have to lose? Ok, sorry off track a bit but anyway as of this writing Bitcoin is pushing the $10k mark and the SP500 is well over 2600 so our best analysis is to just stick with the prevailing winds and say, we see no bubbles here, just simply more of the same fiat debasement going on.

We did handpick, or shall we say cherry pick a few charts courtesy of Zerohedge this week, which does show that the SP500 is exhibiting some true extremes, some things we haven’t seen in a very long time.The first chart we have is SP500 Price to Sales, which hasn’t seen such an apex since 1999 and we all know what transpired after:

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Summer Doldrums

Posted by Capital Trading Group on Jul 26, 2017 10:15:10 AM

As we labor along these summer trading days, awash in great anticipation of the next FED policy move, we can't help but bring to light some of the driving facets behind the equity, bond and currency moves.  We believe that our readers must understand the simple fact that central banks are the biggest driver, not only as to the daily direction of bets placed, but as to the overall trends in general.  We heard for years how the plunge protection team didn't exist.  We heard for years that dope Steve Liesman, that FED butt kissing media spinning journalist tell us that the central banks don't directly affect the markets.  Now after 9 long years of ZIRP and $15 Trillion dollar major central banks balance sheets (not including PBOC), the markets are as frothy as ever.  We hear bubble talk after bubble talk, bonds are in a bubble, equities are in a bubble, Bitcoin is in a bubble. 

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