Comment by phil

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phil
November 17th, 2015 at 7:06 am

Good morning!  

Big rally this morning off G20 promising to add 2% to global GDP by 2018:

G20 leaders push for global growth

• In their final communique from a summit in Turkey, the leaders of the world's largest economies stuck to a goal of lifting their collective output by an extra 2% by 2018, even though growth remains uneven and weaker than expected globally.
• "Our top priority is timely and effective implementation of our growth strategies that include measures to support demand and structural reforms."
• G20 leaders also endorsed plans to address Syria's refugee crisis, taxation, climate change, cyber security and inequality.

Of course, you are supposed to forget that this has been their goal since 2009 and they have utterly failed for the past 7 years so far…

Oh, and they will do this while cracking down on Corporate tax avoidance and reversing climate change! 

God, I miss being young enough to believe all this BS…

Europe is exploding higher – 1.5-2%, Asia was up 1% with Australia up 2% but Shanghai flat but, in general, we are just plowing higher and our Futures are up half a point already:



I THINK we'll stop here for the day, however, as the Dax is testing 11,000 and I don't see any logical reason why we should be up 500 points (4.7%) in two days in Germany – kind of idiotic given the terror attack and the immigration crisis but that's what the markets are doing….



Obviously, the run from 10,000 to 11,000 is 10% so, if we look at it from a bullish perspective, then a 200 (weak) and 400 (strong) retrace from 11,000 holding would be bullish consolidation for a move back over 11,000 and we could consider Monday's move down to 10,500 an overshoot so it will be very bullish if DAX gets over 11,000 again – I just don't think they do.  

S&P, for all the bluster, still has to show us the money at 2,100 and the Russell hasn't even popped a strong bounce yet and NYSE is still dead at 10,200 so this "rally" is even narrower than the one we complained about last time we hit the tops:





Still, silly to make predictions in this insane market – just have to go with the flow for now.  

These rallies where materials go down while industrials go higher are completely ridiculous but so are the Central Bank policies that are driving them.  Good point made in the steel article above (2:38) that the ultra-low rates are keeping suppliers alive who should have shut down production ages ago and it's causing these production gluts as what constitutes marginal production costs is driven lower and lower with low-cost refinancing of debt.

The article after that (2:52) explains why we can buy /NGJ6 today for $2.50 (I'm up to 12 now, even though my original entry was $2.44, so now $2.46 avg) – they reclassified /NG storage levels and added some to bring us closer to the SHOCKING 4Tn level that always spooks the markets this time of year.  



This revision will be public on Thursday and we may spike lower but it will be the good kind of lower we want to take advantage of.