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PM at large institutions over 20Y. Investments decisions = your responsibility. What isn’t forbidden by laws of physics is mandatory. Analyze distributionally.
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Jan 25, 2023 5 tweets 2 min read
1) $324M of $3.9B of $TSLA OI was FSD recognition.

Most didn't model. +1.5% GM impact. And there goes EPS beat vs "company compiled" consensus.

Inventory $12.8B vs $10.3B Q3 and $5.8B Q4 '21. Big jump Q/Q and huge jump Y/Y in days.

Many ...

$SPY $QQQ $TLT $GLD #Commodities 2) more details ... forward comments usually don't matter much. Especially if Elon says bullish things (just calibrate his past comments).

If he concedes any downside metrics? Pay attention.

Independent analysis with incoming data by far most relevant.
Jan 25, 2023 5 tweets 3 min read
1) Total global ETF holdings of #gold has gone sideways despite gold +19% since early Nov.

System akin to compressed spring. Less pressure?
Spring bounces.

Δ largely $GLD driven. What if US investors traders actually buy?

1 more chart today.

$SPY $QQQ $TLT $GDX #Commodities 2) Cost of $SLV puts vs calls (3M 25 delta) 10D MA not budging despite #silver +33% in several M.

Incredible (to me). And never happened in history of this data.

Whenever silver rose as much since '15 secular low, cost of calls shifted ~8-10 (implied ...
Jan 24, 2023 7 tweets 3 min read
1) Largest day of $SLV inflows (+20M oz) by far since #silver squeeze!

Positioning was more bearish despite #gold +19% #silver +31% in few months.

Little buying power was used. If anything there was large selling vs price reference points ...

$SPY $QQQ $TLT $GLD #Commodities 2) over last few Y, as well as variety of unusual technical readings that just don't occur after significant rallies.

"Yes there WILL be pullbacks, but I've mumbled could be shorter and shallower than one might usually expect."

Data implies unusually ...
Jan 23, 2023 4 tweets 2 min read
1) Leading economic indicators down 10M in a row and -7.4% Y/Y.

In or entering recession (Mar '01) every time since '60.

"Cliché but true - every cycle is different. A few bad job prints would seal the deal."

"This time is different" often ...

$SPY $QQQ $TLT $GLD #Commodities Image 2) dangerous but we're prob not in recession now or entering within a M(?).

Consider LEI components. Shown is 6M change.

Soft component (consumer expectation) largest negative contribution. Employment component almost flat.

I've been watching for sudden weakness in high ... Image
Jan 23, 2023 7 tweets 2 min read
1) Quick comment on #silver.

Silver -5.7% from recent peak. So far normal noise in both bull and bear mkts.

Also 17% below 14D 2 St Dev band. Last time? 6/13/22.

And 6/16/21 when 2 St Dev band was this narrow.

Both were during bear markets.

$SPY $QQQ $TLT $GLD #Commodities 2) So will soon test whether this is that shorter and shallower bull mkt correction positioning and technical indicators now suggest.

Note big differences already today. Miners outperforming vs underperforming (e.g. 6/13/22 6/21/21).

#Gold down small vs -$50 the prior days etc.
Jan 13, 2023 4 tweets 3 min read
1) I respect @garyblack. He deals with facts tho may disagree with analysis.

Here's $TSLA '23 sales and OP est in same format (no updates for US/EU price cuts yet).

'23 cons rev $109B (+33% Y/Y). Cons OP $19B or 17% OM.

~ 10-20% price cuts ...

$SPY $QQQ $TLT $GLD #Commodities ImageImage 2) flows directly to bottom line (assuming all else equal for now e.g. opex unchanged).

It's tough for OM not to decline 50% or more even if units grow > 50% (and I'm doubtful).

I.e. EPS could easily fall 50%.

After every price cut there's a quick orders spike. Unknowns ...
Dec 5, 2022 4 tweets 2 min read
1) #CPI impact of gasoline alone Jun '23.

Gasoline wholesale lowest since Jan '22.

Avg retail $3.84 in Oct, $3.69 in Nov, and Dec may be ~< $3.4.

Jun '22 avg $4.93 vs $3.08 Jun '21 (or +60% Y/Y).

CPI gasoline was also +60% Y/Y Jun '22 so ...

$SPY $QQQ $TLT $GLD #Commodities Image 2) average unleaded over a month is a very good model.

IF (and we don't know this yet) retail gasoline price were ~$3.4 in Jun '23, CPI gasoline would be -31% Jun '23.

From +60% Y/Y in Jun '22 to perhaps -31% in Jun '23 for gasoline CPI?

That's a 90% delta from gasoline alone.
Dec 5, 2022 4 tweets 2 min read
1) Impressed you can still run monte carlos. Haven't touched one in decades.

If use both data series and propagate errors using certain (think ~ valid) assumptions, get similar statistics last 6M:

165K +/- 64K jobs/M
or
1M +/- 380K jobs/M

$SPY $QQQ $TLT $GLD #Commodities 2) Earlier back of envelope for past 8M was applying 90% CI or 1.65 st dev.

Assumptions incl normal distribution (prob pretty good), uncorrelated data/error (prob ~ ok given data sets) etc.

This is statistical based on BLS data and doesn't adjust for ...
Dec 4, 2022 4 tweets 2 min read
1) Payroll 1st response rate in Nov/annual response rate vs 1st to 3rd (final) payroll revision.

Correlation is 0. Series since '81. If use data only last 15Y, corr still ~0.

Nov often weak due to Thanksgiving. Collection days were 10D vs ...

$SPY $QQQ $TLT $GLD #Commodities Image 2) 10-16D that span business days after 12th of month thru Mon of the report week (BN).

Even taking that into account, Nov '22 response rate △ likely ~10% below prior 40Y low in '05. So seasonal + something else this Nov.

Raw BLS data since '81.

Removing Nov '21 outlier ... Image
Dec 1, 2022 9 tweets 3 min read
1) Posting often about $TSLA for a reason.

LT growth/share/margin assumptions required by valuation were outrageous.

But a LT expectation reset (i.e. blowup outside of lockdowns) seems likely within few Qs.

Book to bill will be << 1 in Q4 ...

$SPY $QQQ $TLT $GLD #Commodities 2) (also in Q3) at this rate.

Backlog = sales-orders. B:B = orders/sales.

I'd guess many TSLA bulls aren't familiar with cyclical risks as bull case is mostly secular.

Have discussed semis as a leading econ indicator for over 1Y. Requires cyclical ...
Nov 30, 2022 4 tweets 2 min read
1) Much to say but just a summary. Rates will go "somewhat" higher?

Peak Fed funds rate now 4.92% vs 5.15% in early Nov.

Or only ~20% prob of 2 more hikes vs Sep dot plot vs ~100% prob few W ago.

Taking under at 4.87% median still looks ok ...

$SPY $QQQ $TLT $GLD #Commodities 2) (btw ignore 4.331 hikes in table - distorted due to 3.83% effective rate vs 3.87% median).

And at least an IT 2Y yield peak on 11/3/22.

Also 3M/2Y inverted today! Correlates with recent 3M 18M forw - 3M "Powell curve" inversion.

Much better than ...
Oct 18, 2022 5 tweets 3 min read
1) BofA Oct Global Fund Manager Survey released today.

Most charts are saying similar things and are at/near '08 extremes. But here's a sample.

Net fund managers % saying overweight cash and underweight equities beyond peak '08 levels.

$SPY $NDX $TLT $GLD #Commodities 2) Close to record levels of investors expect a weaker economy next 12M.

#Inflation expectations at Dec '08 level.
Oct 18, 2022 6 tweets 3 min read
1) SF Fed paper "finds national homeowners’ shelter prices rose 4.3% Y/Y in July 2022, compared with 5.8% in the CPI measure" based on actual payments.

- OER based on the “implied rent” that owners indirectly pay to ...

$SPY $NDX $TLT $GLD #Commodities
frbsf.org/economic-resea… 2) live in their homes. Implied rent cannot be observed, so the CPI uses an estimate (i.e. very imperfect, lagged and difficult to model as I've discussed).

Magnitude of shelter #CPI has surprised most, including Nobel laureates, Harvard professors, GS economists (who today ...
Oct 17, 2022 4 tweets 2 min read
1) Bberg implies selling bills to buy back bonds, so has elements of Operation Twist.

"allowing Treasury bills to be sold in more consistent quantities, with proceeds used for buybacks of securities less in demand."

This would also help ...

$SPY $NDX $TLT $GLD #Commodities 2) release RRP liquidity.

But haven't seen any evidence that this is their intention (sell bills to buy back off-the-run-Treasuries). If Treasury matches tenor by selling on-the-run-Treasuries instead, liquidity of older bonds will improve but market impact is quite different.
Jul 23, 2022 7 tweets 3 min read
1) Another view of 4M decline in LEI.

Not 4M in a row but % change in 4M. Perhaps -0.6%, -0.8%, +0.1%, -1.2% is worse than -0.2%, -0.3%, -0.1%, -0.4%?

All priors when 4M change was as low led to a #recession within a ...

$SPY $QQQ $TLT $GLD #Commodities
2) few Q's (or already in recession in some cases) since the '60's.

Interestingly, this approach dramatically shortened lead time to '08 recession vs LEI down 4M in a row. Signal kicked in Nov '07 instead Jul '06.

Apply your interpretations.

Jobless claims 4W MA rose 70K ...
Jul 10, 2022 6 tweets 3 min read
1) 1Y breakeven (1Y forward) < 2.5%, a 52W low and below when #inflation was transitory in ‘21.

1Y breakeven (current) 3.8% vs 6.3% in Mar. When Jun/Jul 8-9% CPI rolls off and sub 3% #’s roll in, 1Y inflation expectations will be 2’s % by Aug!

$SPY $QQQ $TLT $GLD #Commodities Image 2) Will change with data but consistent with current inflation swaps pricing early ‘23 as discussed.

Also Citi’s Global Supply Chain Pressure Index fell by largest amount in its history in Jun.

Prefer this to NY Fed Supply Chain Pressure Index. Citi includes inventory data … Image
Jul 2, 2022 5 tweets 3 min read
1) $GLD down a bit but $GDX $GDXJ strong Fri.

Many backtests with various conditions/timeframes improves at least ST risk/reward (i.e. not guarantee).

Even in May there was a ST rally.

And $SLV < -1.5% but $SIL > +2%?

$SPY $QQQ $TLT #Gold #Commodities
2) Also looks bullish tho N=only 3 since ‘10.

Given how oversold/multiple indicators showing signs of capitulation, prob better to have these than not.

As @TheDailyGold mentioned, % of $HUI stocks above 200D MAs was 0% Thur.

Besides ‘13 very low % …
thedailygold.com/gold-stocks-ar…
Jul 1, 2022 5 tweets 3 min read
1) #Fed funds futures update.

Pricing only 0.78 hikes over 2 meetings (Dec '22/Feb '23). So basically 100% chance of Dec or Feb pause and ~20% chance of 0 hikes after Nov.

Implied Dec rate 3.31% vs 3.78% peak few W ago.

$SPY $QQQ $TLT $GLD #Commodities
2) Notice small prob of a cut in Mar and significant prob of cuts every meeting thereafter?

What happens if ISM < 50 within few M (fed hasn't hiked with ISM < 50 since 70's)?

OIS 2Y-1M #yield spread 6M forward (1M is decent proxy for overnight rate) ...
Jun 30, 2022 7 tweets 3 min read
1) South Korea's chip stockpiles increased by most in more than four years (BN).

The Y/Y spike in chip inventory in '18 was followed by a cyclical downturn. Excesses are bigger this cycle.

This is inventory just at ...

$SPY $QQQ $TLT $GLD #Commodities
bloomberg.com/news/articles/… Image 2) manufacturers of chips.

Their customers, customers of customers etc also have too much inv (PC, smartphone, assemblers, contract manufacturers, retailers etc) and are cutting orders precisely when chip manufacturers have too much inv.

What shortages?

Undershipment has ...
Jun 29, 2022 5 tweets 3 min read
1) One more. Richmond #Fed manufacturing survey lead time lowest since '19.

Don't forget these are diffusion indices so ~ rate of change vs absolute levels but a cliff both ways.

Orders, shipments, lead times etc ...

$SPY $QQQ $TLT $GLD #Commodities
2) sound familiar? That huge inventory stocking cycle now likely morphing into huge destocking cycle.

"I.e. no shortages? Downturn inevitable if preceded by inventory overbuild.

CEO: why do we have so much inventory when we can (order) parts tomorrow?"
Jun 28, 2022 4 tweets 3 min read
1) People intending to vacation by car fell to 22.7% in June (BN).

Lowest seasonally in > 4Y.

"36% of Americans surveyed this month intend to take a vacation within the next six months, the weakest June reading any ...

$SPY $QQQ $TLT $GLD #Commodities
bloomberg.com/news/articles/… Image 2) Y in data going back over 40 years, excluding 2020"

So at least some demand destruction may continue.

Avg US unleaded price was $4.88 yesterday vs $5.02 peak Jun 13.

But gas price spiked end of May into Jun. So avg Jun price MTD is $4.96 vs $4.56 ...