To The Moon

The excellent performance of China's stock market in June has made some Wall Street strategists optimistic. But if recent history serves as a guide, unless fundamentals improve, it could prove to be another short-lived rally.The MSCI China index is up about 8% since plunging into a bear market last month, outpacing the composite index of other Asian stocks. Goldman Sachs said the tactical trading window for Chinese equities was "open again", while Nomura said expectations of further stimulus from the property sector could help stabilize the market.Still, short-selling volumes in Hong Kong stocks have remained high in recent weeks, suggesting gains may have been driven by fast-money investors covering up bearish bets, as most long-only funds remain heavily underweight in Chinese equities. S

Even in the case of economic recession, the selling pressure on the stock market will not be as severe as in the past.Simon White, macro strategist at Bloomberg, believes that the excessive focus on economic recession stems from its impact on portfolio. The S&P 500 index fell an average of 5% before the recession began, and may fall a further 30% during the recession. But the price trend shows that stocks may not suffer such serious losses this time.However, first of all, the risk of recession has obviously increased, even if it is not an absolute certainty.One of the most comprehensive and reliable leading indicators for measuring economic recession is the recession gauge. It consists of 14 recession sub-indicators, covering a wide range of market and economic conditions. When at leas

No large hedge fund has shorted American stocks, thus driving up the stock price. However, investors' sharp reduction in holdings may have the same effect as chasing up the market.It's easy to focus on data on the biggest net-short position in S&P 500 E-mini futures in more than a decade. But as often happens in the financial sector, the truth is not always what it seems.This so-called big short is inconsistent with the positioning of NASDAQ and Dow Jones.It would be strange if speculators, that is, hedge funds, only took a short position on the S&P 500.PictureOn the contrary, these data are likely to be influenced by hedge fund index arbitrage.Index arbitrage was once the exclusive domain of banks, but it was limited by Volcker rule. This was introduced in the wake of the global f

When everyone is paying attention to the recent trend of the US stock market, or even more To be exact,As 0DTE's volatility suppression seems to permanently freeze the S&P index in the range of 4100-4150 …Picture... The real trend is in Japan, where the Nikkei 225 index closed above 30,000 points for the first time since September 2021, just one step away from the Tokyo Stock Price Index closing at its highest level since 1990.On May 12, I tweeted that the Nikkei 225 Index officially started to rise, and it rose by more than 1,300 points on May 18, accurately grasping the starting point of the trend.PicturePictureThe Nikkei 225 index rose 0.84% to close at 30,093.59 points on Wednesday, with an increase of 7.32% this quarter. By contrast, the S&P 500 index is up less than 1% and th

Investors are trying to get through the end of the rate hike cycle in the most cautious way, waiting for the green light to take risks, but this may take time to materialize.The stock market is extending the consolidation stage, which may continue. Volatility in the Euro Stoxx 50 was once again suppressed, with the Vstoxx index trading below 18 and back below its 10-year average. Investors are torn between expectations that the Fed will turn doves later this year and uncertain macroeconomic prospects.After last week's economic report, the swap market already expects to cut interest rates by more than 75 basis points in 2023, although strategists warn it may be premature. Meanwhile, the European Central Bank has not yet completed its rate hike."There is a good chance that the market will mo

An old adage says investors should "sell in May and leave".Historical analysis shows that summer market is often the weakest month of the year. The mathematical statistics bear this out, because the $10,000 invested in the market from November to April far exceeds the amount invested from May to October.PictureInterestingly, during the "May Sell" period, the maximum pullback/retracement was much larger. The previous important dates of market plunge were October 1929, 1987 and 2008 respectively.However, it is not every summer that the performance is poor. Historically, there have been many periods when "selling in May" didn't work and the market rose. 2020 and 2021 were examples of large-scale Fed intervention pushing up prices in April and the following summer. In 2022, however, the opposi

Operation cycle of gold priceSince April 18, 2022, the high point of gold price has shown regularity, with stage high point (top) appearing every 39-44 trading days. At present, there have been six consecutive such cycles. If we want to explore the reasons, it is more about trading behavior and financial behavior. If the current macro background is not broken, the cycle will continue.PictureWhat is the current macro background?To put it simply, the market constantly switches between two expectations-hard landing or soft landing.Hard landing scenario will trigger interest rate cuts, and the yield of US bonds will drop sharply.Soft landing scenario the US economy perfectly avoids recession and enters the next cycle, with interest rate falling far less than hard landing.The former is good for

In the past 10 days, the implied interest rate curve of FederalFundsRate market has fluctuated greatly, as shown in the following figure:​on March 8th, Powell's congressional testimony conveys a hawkish position on the immortality of inflation, The market interest rate price soared close to the end rate of 6%, and then the Black Swan incident occurred-the collapse of Silicon Valley Bank caused continuous thunder of small and medium-sized banks, Credit Suisse was difficult to operate, the US Treasury Department and the Federal Reserve rescued the market urgently.After that, the interest rate was expected to drop sharply to the end rate of 4.75% on March 15th (green line above). March 16th, with the crisis between Credit Suisse and American small and medium-sized banks coming to an end,