ASX fakeflation melts up

It’s something else now. The AUD is in an unruly melt-up:

As the suicidal RBA snores, bonds are selling too:

XJO looks positively sober next to the currency. Not long now before it is crushed by it:

Big Iron is one of the few in a real-life boom:

Big Gas is lagging oil which has moved very fast:

Big Gold is being left behind but if DXY keeps falling it will resume:

We’re long all three given they are the only plays we can find with any substance.

Banks are rising again:

Big Chunt, which has no listings, is priced for a boom:

Outside of specific commodity plays, it’s all fakeflation and, in due course, will bust just as spectacularly.

David Llewellyn-Smith
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Comments

  1. Blottridesagain

    Z1P up 40% yesterday! It’s all good!

    I have no answer to your serious question. I’m not throwing more into it right now that’s for sure although I’m GUESSING there is a bit to run in this yet. We look like the love child of the financial universe.

  2. DingwallMEMBER

    CFTC AUD speculative net positions

    Seems like the shorting AUD has been growing in the last few weeks…. wasn’t cleared out at all

    • Ding
      Absolutely a lot of that move was short covering
      OTC market shorts taken out most of the way up

  3. Lord Winchester EntwhistleMEMBER

    Anyone buying WPL et al at the bottom will be able to make some ostentiously splending improvements to their country manor, what!

  4. MB readerMEMBER

    In due course means we don’t know when but some day, which ain’t very helpful. Basically no one knows.

    • There is a time N in the future, such that at time=N it will be true that the AUD is trading lower than it is at the moment.

      😉

  5. Good calls DLS
    You’re on fire …
    I missed these moves
    I’m quite lost
    I’m following you

    I think you’ll be correct in the end

    • Psycho markets….many are lost, too, don’t feel too bad – fundamentals don’t matter at the moment.

      Fundamentals might matter in the future??

      • I’m not sure, I don’t hold short term positions, I hold only very long term

        ASX is a bucket of shix with 25% of index insolvent banks that hold 95% of all mortgages in AUST, that’ll never be repaid

        USD is safe haven

        Dow Nasdaq are world leaders

        USD is still king

        Gold and Silver

        Europe is a disaster
        China is in serious slow down
        Our economy is being driven by Ponzi keeper

        I’m not interested in the noise

        I know when to stay away from trading….

        The swings both ways are going to be brutal

        • I value your thoughts, thanks.

          Think you’re right about JobKeeper – I think it’s stopping confidence from evapourating…removing it is going to be brutal, surely…

  6. david collyerMEMBER

    Many sectors are trash – retail, REITs, fossils, banks.

    There is always someone with pricing power. I think insurances, food, Cu, Ni.

  7. truthisfashionable

    So maybe swap some AUD into USD if thinking of a Disneyland trip in 3-4years? Or still a chance it will melt up more?

    Maybe the same for GBP if planning a trip not long after? I noticed the 2 year high is ~0.578 and current is ~0.55

    • I’m not sure, really….

      You could move a ‘little’ AUD into USD, if doing so doesn’t hurt wrt to transaction fees, etc.

      I hold no USD a the moment, and was a USD bull until not that long ago. I still think the USD will come back, but I’m not sure when, and how far the AUD will advance in that time (we could be at the top now, I don’t know).

      I wonder if the AUD could realistically push past 71/72? Surely that would take something extraordinarily good (eg. massive China stimulus) or very bad (eg. US economic/social meltdown, etc).

      I’m still very much figuring things out, as my macro has taken a beating lately; could be I am still right, but timing is wrong for now.

      • It’s anyone’s guess and really just a guess. My guess was it would top out at 67c and I was wrong. So I bailed.