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May 31, 2017

www.tgmacro.com

Volume: 1 Issue: 130

St. Stephen

Saint Stephen with a rose, in and out of the garden he goes Country garden in the wind and rain Wherever he goes the people all complain Sound like someone we know? I like to start the morning off by powering on the computer, finding some slow rolling music to put a smile on face, and scrolling through Twitter to see what I missed. This morning I was upset the President of the United States left a tweet notification on my phone that said,

“Despite the constant negative press covfefe” and that was it. In fact, I cringed but I commit [expletive] type-o’s all the time, so I have sympathy for the guy. Yesterday Trump had to endure a pathetic stooge enacting a slanderous stunt for the shock & awe click value it brought CNN. This morning the universe of Twitter trolls are mercilessly blasting the President and making up memes about his new word, “covfefe.” You can’t say he didn’t ask for it, but it’s abundantly sad to me that this is what people focus on when, as a country, we have much bigger fish to fry. Let’s press on to the markets while the intolerant left sizes up Hillary’s leather jacket for another run at the White House. Cable was the worst performing currency on the planet yesterday off 65 basis points. FX traders are reacting to a YouGov poll that suggested Theresa May would lose 20 seats and be stripped of her majority in Parliament in next week’s snap election. Do you remember the media’s “polls” that had Hillary waltzing into the White House on that evil looking grin and fake wave to nobody. If I told you the YouGov poll was created by the same people, would you still buy the “Hillary’16” calls? If I told you the YouGov poll is the medias attempt to snafu sentiment on everyone in Europe and the U.K. after the latest Islamic terror attack on the children of Manchester, would you trade off of the YouGov poll and sell cable down here? If you are a seller of cable down here, call me because I have a “YouvGottaBeKiddingMe” poll I would like to sell you the results of. We’ve got a Prime Minister with great command of the Brexit process, who won in a surprise victory herself, looking to put up a real fight against terrorism, while the rest of Europe “Fights Back With Candles And Teddy Bears” and you are going to believe the English are going to vote her party out of a majority? Not a chance, Mate. I dug right into the main stream media swamp to get the details on this poll only to find out that a responsible sounding Research Director (Kathleen Brooks, EMEA) said that the poll “is the outcome of a model that has used untested methodology to come up with this hung parliament conclusion.”

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May 31, 2017

www.tgmacro.com

Volume: 1 Issue: 130

She said to take the YouGov poll “with a pinch of salt.” I say, “I’m £1.2800 bid for size, come and covfefe me.” If I get covfefe’d in the next 24 hours, it’s going on the PosMon while proper English takes a holiday. I faded the speculative short cable traders down at £1.2500, who looking for a post-Brexit collapse and it worked. If the media branches currently losing their composure are going to set cable back toward 1) 50-day moving average support at £1.2750, 2) the neck line of the “reverse head and shoulders” it broke out from with 3) the 100-day moving average in blue crossing up through the 200-day in yellow while 4) the relative strength index is well oversold around 25, then I’m bidding for cable with veins popping out of my neck at this level. “One man gathers what another man spills.” Yesterday we saw another grinder of an equity rotation that could continue today. Technology is still chasing FAANG up a flagpole, gawking at AMZN’s four handle price. At some point, there will probably be an elevator down from this 30 and 40 basis point escalator up the sector has been riding. Maybe once we catch the world’s soon-to-be richest man, Jeff Bezos, droning a fake news story on a cocktail napkin over to the #WaPo headquarters, but we’re not there yet.

Oil is back below $50 but I haven’t abandoned bullish posture. I’m still sitting here waiting for a monster reversal and retracement trade in E&P (XLE chart left) and oil services. Tom Lee, at Fundstrat Global Advisors, was speaking my language when he explained what happens when oil goes backwardated. He reminded us credit and equities should be somewhat related, and then points out that IG CDS has been the best performing CDS sector this year. He thinks that market is anticipating backwardation caused by the OPEC production cuts like I am, and yet energy stocks have collapsed. Remember when bank CDS outperformed bank equities marking the bottom of the post financial crisis banking sector in 2008? Tom Lee and I do too. I’m not taking my focus off this trade, or the camo paint off my face. The utility sector (XLU) is making good on the technical breakout. Industrials (XLI) are hanging at the high behind outsized rallies in MMM, WHR and strength in transportation stocks (NSC, UPS, R.) The problem is last night China’s PMI recovery did little to inspire natural resource markets. Iron ore (chart left) broke range and fell 3%. This morning its dragging the base metal complex into the red with LME nickel and zinc off roughly 2% apiece. Zinc has been a leader and it still has technical merit. Nickel

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May 31, 2017

www.tgmacro.com

Volume: 1 Issue: 130

is coming apart and gold is going nowhere fast. Maybe because of the new currency in town. If you read my bullish piece, “Bitcoin Blitz” on Friday, you should read this outstanding piece, by Macro Tourist Kevin Muir, for some balance. The guy was on to the blockchain mining Bitcoin long before I was even looking at it and I have a ton of respect for that. I also have respect for the same trader that says, I left $5.5M dollars on the table and “my forecasts have all been completely wrong.” Read Kevin Muir for a solid second opinion to my bullish posture, and then movie on to “Big Week for Blockchain” because last week sure was. Jeremy Epstein points out (back of the envelope style) the interesting dynamic that there are nearly 1,500 computer science students in North America at top tier schools likely sitting on $30-$40M of cryptocurrency wealth. They’re 18-25 years old, 98% male, and they’ve got a lot of levered investing potential. These are the people that hold the keys to the crypto universe, but it’s a small population. When Epstein estimates the crypto community at 24,000 people globally, I get really confident that it’s still early enough to invest sensibly and this sector is zero percent tulip market bubble. There are 750 million people in the G7 alone (UK, US, Japan, Germany, France, Italy, Canada), which excludes many wealthy industrialized nations and only accounts for 10% of the world’s population. How many of those

people are invested in the global stock & bond market? What if that larger group of people makes the decision to put a sliver of crypto-currency in their portfolio? Can we guess that groups size at 250 million investors? What if they decide to buy some bitcoin? Now I’ve really got to run. Time to download my new blockchain interface app, JAXX and start bidding for some. Saint Stephen will remain, all he’s lost he shall regain Seashore washed by the suds and foam Been here so long, he’s got to calling it home.

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May 31, 2017

www.tgmacro.com

Volume: 1 Issue: 130

"I am appalled at the behavior of the media. It's the collapse of journalism."

- Camille Paglia

"All government, in its essence, is organized exploitation, and in virtually all of its existing forms it is the implacable

enemy of every industrious and well-disposed man." - H. L. Mencken

“I think ISIS can do terrible things and I worry a lot about what is happening with the

Muslim faith. But it’s the Russians who tried to destroy the very fundamental of

democracy, and that is to change the outcome of an American election.”

- John McCain, channeling H.L. Mencken

“We have a President that is creating episodic chaos every single day, and that is no

doubt affecting consumer behavior.” – Howard Shultz

“Freedom of speech and thought is not just for warm fuzzy

ideas that we find comfortable, it’s for ideas we find

offensive.” - Fareed Zakaria

“I tried being reasonable, I didn’t like it.”

- Clint Eastwood, born May 31, 1930

“First I prepare, then I have faith.”

- Joe Namath, born May 31, 1943

"The real fountain of youth is hidden in the imagination you draw upon to face everyday challenges." - Sophia Loren “Drumming was the only thing I was ever good at.” - John Bonham, born May 31, 1948, Died September 25, 1980 “He was definitely the greatest rock & roll drummer that ever lived, and that’s all there is to it, really.” - Jimmy Page “I have learned that to be with those I like is enough.” - Walt Whitman, and me Born May 31, 1819, Huntington, Long Island

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May 31, 2017

www.tgmacro.com

Volume: 1 Issue: 130

Position Monitor: Note to self – momentum trading Canada going POORLY.

NOTES: The POSITION MONITOR is to keep track of the technically driven trade ideas that I think have merit, and account for them

in evenly based logarithmic, then portfolio returns.

o Each position size is 10% of the portfolio o The portfolio will be limited to a total of 10 positions at once o Profit and Loss (PnL) is calculated in log returns o LONG positions in BLACK, SHORT positions in RED, ‘paper trades’ are in gray o Stop losses in BLUE have been moved up to protect profits. o Position initiations are discussed in the Morning Navigator before and on the date of inception o CLOSED TRADES are “grayed out” at bottom and marked CLOSED in the PnL column o Only the most 10 recent trades will be visible, the rest will be hidden within the spreadsheet to save space

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May 31, 2017

www.tgmacro.com

Volume: 1 Issue: 130

[Joe Namath – Pinterest]

[Sophia Lauren – Elle]

[Walt Whitman – Dan’s Papers]

[John Bonham – Pinterest]

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