Hedge funds are not buying? At least some of them.

hello,

The recently published the latest reports and summaries positions in the portfolios worth noting the two perhaps best known funds in the world.

I mean, among other things controlled by Warren Buffett's holding company Berkshire Hathaway, which at June 30 this year, had $ 55 billion in cash patiently waiting for buying opportunities.

In turn, the George Soros Fund, built nominally worth $ 1.3 billion position in put options on the S&P500 Index, allowing to earn a possible decrease in this Index. At the end of the second quarter was the largest position in the portfolio of Soros Fund Management constituting 17 percent of assets.

 

chart 1. Number of put options on the S&P500 in the portfolio of Soros Fund Management (thousand pcs.)

 source: SEC

In addition, I want to show how the summary trading with volume. 15-session average is at its lowest level during the entire bull market. Even at the beginning of 2012 it was about 70% higher.

There's no one to buy the shares, but still less investor sells them.

 

chart 2. SP500 Index with volume; 2014-08-28

regards,

oscarjp

Outflow of cash from the Warsaw Stock Exchange in July.

hello,

welcome, after a short break due to my holiday leave. During my absence in the markets has happened a lot but I assume that those reading my entries are people that continuously read information and economic data so I will not come back to them.

I decided to analyze the Polish capital market which occurred in July. This is a continuation of an entry dated 28 July. Link below.

The main reasons for declines on the WSE in June

In the previous post I showed that the Open Pension Funds in June "sold shares of companies listed on the domestic regulated market and bonds convertible into shares of these companies, and listed on the market pre-emptive rights and rights to shares, on value of PLN 1.85 bilion." Where a large part of it was invested in bank deposits.

Unfortunately, in July, the outflow of cash from the Polish stock market has intensified. Throughout the month of July funds sold shares worth about 5 billion PLN. In addition, we recorded a cash outflow from investment funds focusing on the Polish stock market. In July, investors paid out from them almost 500 million PLN more than they had paid. It is also the lowest balance of sales in this segment by March this year.

chart 1. Behavior of Indexes in July; 2014-08-21

In the analyzed of Indexes, only NASDAQ100 ended the month above the line while Polish Indexes recorded declines in around 5 - 6 percent.

regards,
oscarjp

29. Summary of the trades (July 15th, 2014 - July 31st, 2014)

hello,

It is time for a summary of all transactions are still open from the previous summary and new which I wrote during the last 2 weeks of July.

Below links that refer to each of them.

trade 1 - USD/CAD

trade 2 - EUR/USD

trade 3 - fSP500

trade 4 - fSP500 LONG

KGHM recommendation

trade 1.

This is the Trade exactly from the seventh of July, which was closed exactly on August 1 a few minutes after 11:00 using order "take profit" at a price 1.0939. At the moment, I expect slight descent down, then I will recommend next wave of growth.

trade 2.

Recommendation appeared on the day of the seventeenth of July. The transaction is still open with the possibility of reaching the 1.3325 where I set the order "take profit". I chenge ofcourse my "stop loss". now is 1.3480.

trade 3.
The transaction number three presented two scenarios. The first downward and the other upward. If the price does not come until the indicated levels was worth it to take a short position. According to the scenario, the transaction was closed.

trade 4.

The transaction referred to also in the same entry. We have come to the level so I decided to take a long position. According to the scenario number one.

KGHM recommendation

Recommendation is still short, but without the transaction.

And according to the tradition the whole statement in the summary table.

Summary of trades

best regards,
oscarjp

TA and DCF of Bogdanka

Hi,

Just started an August. So I think that is a good time to have a second short analysis of a public company from WIG30 Index.

Lubelski Wegiel "Bogdanka" SA is one of the leading producers of coal in Poland, outstanding against the industry in terms of financial performance, efficiency coal mining and investment plans assuming making of new fields.

Sold by the Company Coal energy is mainly used for the production of electricity, heat and cement production. The Company's customers are mainly industrial companies, especially companies operating in the electricity industry located in the eastern and north-eastern Poland.

August 20th, the company will publish the financial statements for the first half of 2014.

chart 1. quick liquidity ratio, 2014-08-01

The value of this ratio should oscillate in the region of 1.00. This means that in this case the company does not cover in 100% of its obligations as they fall due.

chart 2. current liquidity ratio, 2014-08-01

Indicator calculates the ratio of total current assets to current liabilities.

chart 3. the rate of recovery, 2014-08-01

Non-current assets + long-term liabilities to non-current assets. The level of this ratio should not fall below the level of 1.00 The lower level indicates that the financing of assets by current liabilities.

chart 4. debt to equity ratio, 2014-08-01

Growth rate is greater involvement of external financing in relation to the sources of their own.

chart 5. cover liabilities by equity, 2014-08-01

This ratio shows what the company's dependence on foreign capital, as well as compares debt companies with capital invested by shareholders. It shows how the size of the debt attributable to shareholders every zloty contribution. Since this index is well illustrated by the company's ability to repay liabilities. Too low index values ​​may indicate a high risk of loss.

chart 6. ratio net debt/EBITDA, 2014-08-01

calculated as the ratio of net financial debt to operating result with amortization and depreciation (EBITDA) for the last 12 months.

chart 7. TA of Bogdanka, 2014-08-01

At present company's share price is a lateral trend with a slight downward slope. In connection with the appearing negative attitudes on the market can be expected to achieve yet another wave around in 98 - 100 PLN where wy will should buy stocks.

My DCF Model indicates 144 - 152 PLN with probability of 79-81%.

So, my recommendation now is WAIT

When reaching the higher level than the 121 - 123 PLN, change the recommendations LONG.

regards,

oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

there is a new tab - "Shares analysis"

hello,

Attention. Brief information. From 28 July when appeared entry for the analysis of mining company KGHM I decided to expand the scope of the publication on my blog by adding a bookmarks "Shares analysis".

As a reminder, the first analysis will find <here>.

Regarding the scope of the publication. At first I decided to limit ourselves to companies quoted on the Polish capital market.

Thank you for your attention.

best regards,

oscarjp

Macroeconomic indicators as they go down - or is it just shortness of breath ?

hello,

 

Continuing the entries about Polish stock exchange and the economy, today I would like to encourage you to analyze the Current Issues of economic activity.

 

link

currently implementing a second scenario envisaged on 9 June on my blog.

 

In the current analysis, I propose to focus on economic indicators because it had recently published the latest readings and the readings were very consistent in terms of direction of change. This direction is now downward. Due to the historical relations can be considered that this phenomenon is at least in part explains the analogous signs of weakness on the WSE.

 

Following is a brief list of the most subjective of me Current Issues of indicators describing the situation in the Polish economy.

 



chart 1. Industrial Production Y/Y; 2014-07-30



chart 2. Industrial Production M/M; 2014-07-30



chart 3. Retail Sales Y/Y; 2014-07-30



chart 4. Retail Sales M/M; 2014-07-30



chart 5. Manufacturing PMI; 2014-07-30

PMI disappointed again. PMI is an indicator regarding the situation in the industry and is not hard data, however, the signals sent by the related to whole economy. It is not only that the reading fell below the expectations of economists, but most of all is that bad luck was confirmed. Index was at the lowest of 11 months. Previously, this kind of signals we have seen in the years 2000, 2004, 2007 and 2011. In three of these four cases, investors watched for some time been developing a negative scenario for the stock market, but that would not be over.

 

In addition, the sanctions imposed against Russia by the United States and the European Union within the conflict of war with Ukraine could plunge Russia and push in the financial crisis. In addition, Russia may start to defend by imposing an embargo on various imported products. Russia imposed an embargo on Polish fruits and vegetables.


regards,
oscarjp

TA and DCF of KGHM; my recommendation

hello,

 

Below I posted my technical analysis of KGHM with with current quotations for copper futures expiring in September.

 

According to my analysis, we reached significant levels which are 130 - 131 PLN. The current correction which started on March 17 can be described as an ABC correction where wave C equals 100% of wave A.

 

In the case when stock finisz the sessions day above 131 PLN and the establishment of a new short-term highs, should take into account the change of describing the current correction.

 

 

chart 1. technical analysis of KGHM, Daily, 2014-07-28

 

The futures chart, it is clear that copper prices were not able to knock out new highs in the medium-term trend and noted decrease in the regions in which at the moment they are. In the case observed in the Chinese market bubble in the real estate market and as a result the pumping of GDP only thanks to government procurement can conclude that the price does not reach new highs should see lower prices.

 

chart 2. Copper futures, H1, 2014-07-28 

 

 

My DCF Model indicates 91 - 102 PLN with probability of 81-83%.

So, my recommendation now is SHORT with SL 133.30 PLN

 

 

best regards,

oscarjp

 

 

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

the main reasons for declines on the WSE in June

hello,

 

Today's entry, I decided to dedicate the home market which is the Warsaw Stock Exchange. And exactly what were the reasons recorded declines in June.

 

In the said month, the correlation between the U.S. and European Indexes was surprisingly small. On the chart below clearly shows that only SP500 and Nasadaq100, closed quotation above in comparison to the end of May.

 

 

chart 1. Behavior of Indexes in June, 2014-07-28

 

Factors can be multiplied. It is certainly among them tense geopolitical situation in relation to the conflict in Ukraine. It is Microcameras scandal, which wavered Rankings government and questioned the independence of the central bank.

 

But one of the main reasons for such a poor condition of the Polish stock exchange outflow of capital was in the possession, which are Open Pension Funds.

 

According to published information provided by pension funds show that during a June, sold shares of companies listed on the domestic regulated market and bonds convertible into shares of these companies, and listed on the market pre-emptive rights and rights to shares, on value of PLN 1.85 bilion.

 

This money is for the most part namely PLN 1.08 billion were invested in bank deposits in the Polish currency.

 

Another part of which is PLN 0.36 billion was invested in bonds and other debt securities issued by companies listed on the domestic regulated market

 

PLN 0.23 billion were invested in shares of companies listed on a foreign regulated market and bonds convertible into shares of these companies, and listed on the market pre-emptive rights and rights to shares. So speaking colloquially in shares traded on the foreign markets.

 

It should be noted that the total OPF have invested funds in the Polish stock market of 120 billion PLN and the outflow of capital in the last month accounted for less than 2 percent.

 

best regards,

oscarjp

fSP500 Index - "packing up" a huge smart money in long positions

hello,

 

In today's entry I want to show the behavior of the index E-mini SP500 between 15-17 July.

 

But before I show You very interesting charts together with possible scenarios for the next few days, it is worth recalling what were received the most important information, which influenced the increase in volatility in these days.

 

July 15, 2014

 

Germany – ZEW Index: 27.1; expected: 30.0; previous: 29.8

 

The July decline was 7 the next, and recently such a situation took place in November 2011. But then it was known that behind this euro crisis, now the obvious cause is not. Not only that, the ZEW in all these seven months, not only declined, but each time was below expectations! So economists are predicting this indicator all the time hoped that the deterioration is temporary.

 

USA – retail sales in June: +0,2% m/m; consensus: +0,6% m/m; previous: +0,3%  m/m; Revision of the previous reading to +0,5% m/m

 

Yellen – summary of final statement

 

Yellen in your text writes about many obvious issues like that GDP fell in the first quarter of the reasons the weather. Directly mentioned that the unemployment rate is 6.1%, and PCE inflation measure of 1.8%, but there is no mention that these better than expected after the data have any impact on the assessment of the situation by the Fed. Not only that, Yellen quickly adds that the situation on the labor market must continue to improve and indicates a low-growing wages, and emphasizes that the majority of the members of the Fed expects inflation to remain below 2%. Disputes also focus on the weakness of the real estate market.

Also the same occurrence, in the context of data from the U.S., had a mild accent. If the Fed ignores the rapid improvement in the labor market and higher inflation.

The effect of the head of the Fed: Discount on Wall Street, especially Internet companies;

 

July 16, 2014

 

USA – Industrial production (June) m/m: 0,2%; expected 0,4%; previous 0,6%

 

The head of the Fed announced that at the end of the year, the central bank will communicate how to reduce the balance sheet, which as a result of programs QE1, 2 and 3 has grown to total over $ 4 bln. Yellen said that discussions on this issue are advanced and the Fed will share the conclusions, when they will be completed.

 

"Some asset prices may be on the high side"

 

July 17, 2014

 

USA - new sanctions imposed on Russia in connection with the conflict of war with Ukraine:

 

1) lack of access, to the issue of market shares and debt over 90 days (Rosneft has $ 13.7 billion of maturing debt this year);

 

2) restrictions for companies such as Rosneft, Novatek, Gazprombank, 8 companies from the defense sector.

 

The ECB will reveal the results of AQR at the end of October. Together with the results of the assessment of asset quality in banks will be the results of stress tests for individual banks in the euro zone.

 

USA – permit for the construction of houses: 963 thousand; expected 1040 thousand

Housing starts: 893 thousand; expected 1018 thousand.

 

The strong increase in volatility in the markets after the information about the shooting down civilian passenger aircraft flight MH17 on the territory of Ukraine by Russian terrorists.

 

Conclusions:

As you can see the information that appeared on the market there were a lot and are only listed by me first. It was this information rather negatively perceived by investors. As it turned out bad information was a good opportunity for huge smart money "to pack" in Futures E-mini SP500.

 

bad and good informations = good informations because smart money rules

 

chart 1. E-mini fSP500 Index, H1; 2014-07-25

 

On the chart above clearly shows increased turnover, where the market under the influence of bad news coming out of the market or take short positions. On the other hand, the financial institution that uses the fear of the market and buys the whole market. in the next phase when the market is already bought by using definitely less money can lead Index, to new highs what now realized.

 

chart 2. fSP500 Index, Daily; 2014-07-25

 

On the chart number 2 I presented two scenarios that assume continued upward trend with an attack on 2000 points in the coming weeks.

 

I think that on the chart presented very clearly so I will not elaborate a lot. In case of the scenario number 1 or 2 will decide the next few days. In the case of overcoming levels of 1982 points we should observe the continuing trend growth and output of more than 2000 points. If the market shows weakness it is possible to going down around in 1918 points.

 

 

regards,

oscarjp

 

 

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

Does anyone else controls the carousel of debt?

hello,

 

At the beginning I have a question for you. What is the Bank for International Settlements? It is very important question that hardly anyone devotes attention to what the Bank says.

 

And should be. Why?

 

As the Bank for International Settlements [FIS] is the most important financial institution in the world. This is called. central bank for central banks.

 

Surprised? Sure there are now questions why no one cites, does not pay any attention to him?

 

Maybe because it tells how it really is and not pulling the wool over eyes with unnecessary words. As we know, the national central banks like the FED, BOJ or ECB are independent from governments, but each of them is a member of the BIS and implements the policies outlined in Basel.

 

At the meetings held every two months governors of the central banks discuss about the future of the banking system in a coordinated manner to lead a global financial policy. Recently published BIS 84th Annual Report, which shows the current global economy situation in the world.

 

I have not found anyone who would referred to this report. That's why I'll do it myself. Very important messages contained in this document is so much that it is impossible to quote in my post all the information. So I will try to write the most important issues.

 

For those interested, link to full report <84th Annual Raport>

 

1. Economy around the world over the last few years have been artificially sustained add prints currencies. The only effect of pumping money into the economy is the growth of debt and the creation of huge speculative bubbles.

 

Source: BIS

 

2. Government bond market was supported by purchases made by central banks. Within seven years the number of bonds in the hands of central banks rose from 8 billion in 2007 to 21 billion today. Increase by 161%.

 

Source: BIS

 

3. In the next few years, the percentage of tax revenue allocated to the repayment of government debt will rise from 20% today to around 25%.

 

4. Although the last few years, economic growth was much lower than expected accumulated around him speculative bubbles, which should be immediately pierced. By understanding the market bubble of debt (bonds) and instruments based on it and the entire stock market.

 

Source: BIS

 

Source: BIS

 

5. Indicators point to the risk of financial distress.

 

Source: BIS

Credit-to-GDP gaps in many EMEs and Switzerland are well above the threshold that indicates potential trouble. The historical record shows that credit-to-GDP gaps (the difference between the credit-to-GDP ratio and its long-term trend) above 10 percentage points have usually been followed by serious banking strains within three years.5 Residential property price gaps (the deviation of real residential property prices from their long-term trend) also point to risks: they tend to build up during a credit boom and fall two to three years before a crisis.

 

The most important thing is the message of the entire report. Better break out speculative bubbles leading to a controlled collapse than to wait until the scale of the distortion will increase, leading to a collapse of the system on which it is easy to lose control.

 

The whole situation is most ironic is that the BIS is concerned about speculative bubbles, which led to his policy, on the occasion of contributing to a significant enrichment, already the richest 1% of the population.

 

You can notice a slight conflict of opinion between the BIS and Mario Draghi. Let me remind you in my last entry: "In addition, the recent statement by Draghi about the situation on the financial markets as many times emphasized that it should not be a topic of discussion for representatives of civil servants (but I understand that everyone has invested some of his own funds). Draghi sees no bubble in the markets and says it will not raise rates if any will appear somewhere. In his opinion, are better macro-prudential instruments. Forging bubbles by raising interest rates is the last resort."

 

 

best regards,

oscarjp