Magnelibra Capital Advisors Econemotions Blog is Moving to Substack
For the past 5 years Econemotions.com has been my blog site for all of my content and writing related to markets and trading. As much as I love doing research and writing and collaboration, the sharing of ideas and proprietary content does have a cost. Everyone’s time is worth something and when we write, we understand that you are taking your time to read something that we authored and it has always been Econemotions goal to educate, inspire and force you to think outside of the box on all areas of financial markets, economics, monetary policy and even some more esoteric areas such as digital currencies, science and life in general. We hope this move will inspire you to follow us further as we continue to uncover new and meaningful data points and we hope we can shape them in a way that inspires you to dig further and uncover something truly unique and special within your own thoughts and lives.
Magnelibra Capital Advisors is the owner of Econemotions and all its content and we hope that you find it refreshingly different and uniquely inspiring. We hope that you continue on our path with us to uncovering and deciphering the often complicated world of investing, trading and risk.
We hope that you opt in for the subscription service which is truly less than 2 grande latte’s a month! We hope you understand that the analysis and insight that we bring, the technical and fundamental analysis that we employ are well worth it to you and all that you are trying to accomplish. There are many things in life that come at a cost, but nothing is more priceless than knowledge and information, we hope you understand where we are coming from.
For this initial post and just to give you a glimpse into what we tend to focus upon, that which we believe is currently the “only thing that matters” when it comes to driving asset prices, that is the Federal Reserve Total Assets on their balance sheet:
We update our data weekly and we cover the balance sheet and SOMA holdings as we are trying to find out exactly which entities the central banks are targeting so we can bring them to you. We feel that the global central banks will continue to work in unison and we will keep you well informed and ahead of your peers in this regard.
We are all living through this unprecedented time and this SARS2-COV has truly polarized our nation even further. Through it all we have kept track of the CDC data closely and we will continue to bring these numbers and break them down so you have the facts. For us, its the facts and data that matter, but as you well know data has to be clean, data has to be constantly updated and deciphered in order to make dynamic well informed decisions and these are the kinds of things that Econemotions prides itself upon. We keep highlighting this CDC graphic here and we will update it as regularly as they update their data:
The number that we truly want to highlight is the fact that “Influenza Deaths is running at just 14% of the prior 2 years average. Ok it is only May and we have the rest of the year to catch up, but then if we focus upon the “total expected deaths” that number is running at 1% below the average of the last 2 years. The CDC denotes this by that “99” number we highlighted in the middle at the top. It is safe to say that the lock down worked, that we stemmed the tide and now we have to begin preparing for reopening.
The fear mongering is going unjustified and once again, it seems as if this has turned political, whereby the left is using this as a tool to lock in “mail in” only balloting which Trump continues to call nothing more than an attempt to commit ballot harvesting and fraud. We have talked at length in the past and have often wondered why it is that the very fundamental right by which Americans decide and employ their ability to vote does not come with a simple verification of identity. Everything else that American’s do practically must be done with a valid identification, yet there is still zero requirement for one to present an I.D. prior to voting. It will be interesting to see this transpire over the next few months. Obviously this all ties in to the Blue States wanting to keep things as shut down as possible, because this lays the foundation for requiring mail in voting.
On the trading front, the equities in particular the Nasdaq continues to plow ahead higher, yet the formidable 200 day moving average is lurking in the SP500. What was interesting is that both the SP500 and the Russell 2000 the last two days have been outperforming the Nasdaq which as of yesterday is up some 7.6% on the year with the SP500 -6.9% and the Russell 2000 -16.3% in terms of front month futures contracts. One interesting chart we posted was this one. This is the cumulative dollar value of the spread trade between the Russell 2000 futures and the Nasdaq, where we utilize a 2 to 1 Russell 2000 to Nasdaq ratio. Note the 50 day moving average hasn’t been broken above since October 25th 2019:
We hope this insight has given you a brief look into the way we view our reality, and we hope you continue this journey with us.
-Michael Agne
DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options on neither commodity futures. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from the author Michael Agne owner of Magnelibra Capital Advisors. All rights are reserved. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, (MCA) makes no warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed.