Five Hundred Words 12/20/2018

Thursday, December 20, 2018

Daily Writing

 

Housekeeping

As I mentioned in a previous post I will be in China from December 25th to January 15th.  My intent is to continue updating the blog while I am there, but I cannot guarantee that I will be able to post every day.  One factor I cannot control is the quality of the internet connection.  I don’t plan on using a VPN, so if WordPress doesn’t function well in China, I’m going to be forced to deal with the consequences of that.  Even if I can’t post while I’m away I will continue writing and I’m sure I will have many stories to share by January 15th when I return.

 

 

Things I am thinking about today

  • Find software I can use to analyze my writing empirically (e.g., word usage rates, typing speed, etc.)
  • How can I keep track of major announcements made by the Chinese communist party?
  • What is the best way to map historical events into a framework?
  • For example, when Xi Jinping gives a new speech, how can I readily incorporate that information into my central China framework

 

 

Things I was thinking about yesterday

  • What key economic metrics am I overlooking?  Especially regarding China?
  • Chinese internal crisis of confidence.  Are Chinese elites losing faith in Xi?
  • The empty promises of Xi Jinping.  What promises specifically?  “Reform”?
  • The Federal reserve is scheduled to raise interest rates 0.25% today.  How will the market respond?
  • Where can we find opportunities in this environment?
  • What is ‘open interest’?
  • Why is it significant if LIBOR moves higher (or lower)?
  • How to improve my technical analysis?
  • How can I improve the structure of my days?

 

Trading Log

9:48 AM

Today I spent most of the day casually observing the market and listening to an audiobook by George Magnus titled Red Flags: Why Xi’s China is in Jeopardy.  It is an interesting book focused on understanding China’s current problems in 2018 while also examining the historical context behind China’s interests as a modern superpower.

Market Observations

I find it quite interesting how briefly the yield on the US 10-year stayed above 3.00%.  The idea that the Chinese were actively selling US treasuries in October and November doesn’t really seem that ridiculous.  I don’t understand bonds quite as well as I would like, but I’m having trouble understanding most asset classes in this market environment.

I’m also drawn to the rapidly declining yields of the Brazilian Government Bond.  What is the reason behind this?  In October the yield on the BGB was almost 11.00%, now it sits at 9.41% as accelerating downward.

Market Data

Resource Commodities

 

December 20, 2018

December 19, 2018

December 18, 2018

December 17, 2018

Gold Spot

NA

1249.00

1245.20

1238.10

Silver

NA

14.600

14.65

14.535

Platinum

NA

789.00

792.00

785.00

Copper

NA

2.6825

2.7040

2.7200

Crude (WTI)

NA

47.00

48.64

50.53

Global Government Bond Yields

 

December 20, 2018

December 19, 2018

December 18, 2018

December 17, 2018

US 10 year

2.79%

2.82%

2.85%

2.86%

US 30 Year

3.02%

3.06%

3.10%

3.12%

UK

1.26%

1.28%

1.28%

1.27%

Germany

0.23%

0.25%

0.24%

0.26%

Brazil

9.41%

9.56%

9.67%

9.67%

Italy

2.73%

2.78%

2.93%

2.95%

Japan

0.02%

0.02%

0.01%

0.02%

Major U.S. Indices

 

December 20, 2018

December 19, 2018

December 18, 2018

December 17, 2018

VIX

NA

25.15

24.68

22.36

DOW

NA

236.93

237.70

239.86

S&P 500

NA

255.18

257.19

259.39

NASDAQ

NA

6741.80

6812.51

6864.23

Currency Cross Rates

 

December 20, 2018

December 19, 2018

December 18, 2018

December 17, 2018

USD/JPY

NA

112.450

112.500

112.9200

EUR/USD

NA

1.1392

1.1369

1.1344

GBP/USD

NA

1.2628

1.2650

NA

AUD/USD

NA

0.7141

0.7175

0.7181

USD/MXN

NA

20.068

20.066

20.223

USD/CNY

NA

6.894

6.896

6.905

USD Index

NA

97.03

97.02

97.15

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Five Hundred Words 12/09/2018

Questions:

  • What is poverty?
  • What are the causes of global income inequality?
  • What creates inequalities amongst people?
  • What are the different viewpoints
  • What does China gain from stealing US intellectual property?
  • What is credit impulse?

 

How much intellectual property is China accused of taking from the United States per year?

What are the core topics currently?

  • Eurozone slowdown
  • US-China trade war tensions

 

Yesterday I received advice from two very wise people I know.  They told me it isn’t necessary to trade every pattern.  Often times it is better to wait for a pattern you understand to to ride it.  The world consists of large trends which are consisted to even smaller trends.