Managing Owner and CIO, Predictive Analytic Models (PAM)

Robert P. Balan runs Predictive Analytic Models, #1-rated trading unit at Seeking Alpha. PAM trades Swiss HF funds using Federal Reserve, US Treasury, and term (money) market liquidity data flows as basis for trading decisions. He is domiciled in Zurich, Switzerland.

Robert Balan ... more

ALL CONTRIBUTIONS

A Tsunami Of Take-Ups In The Fed's O/N Reverse Repo Facility Nullifies QE, Tightens Systemic Liquidity
A tsunami of cash that was headed, and is still heading, for the Federal Reserves' Overnight (O/N) Reserve Repo facility (O/N RRP) to find a non-negative rate place to park. This is Quantitative Tightening at its core.
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Further GameStop Momentum Makes Russell Outperform, But Now Look Out For A Major Market Peak
If a GME resolution happens within the next two weeks, it will coincide with the peak in liquidity flows, and the subsequent, seasonal liquidity drought will weaken equities and long bond yields until late March.
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2021 Outlook For The Long Bond Yield, Equities And The VIX
Bond yields may rise during the first half of January 2021, equities should rise, and the VIX may decline. There's a recurring seasonal decline in liquidity flows after January 15 which persists until middle of March. Yields and equities may fall.
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Verdict Of The OpEx: Consolidation Ends Soon; We Sell Dow, Russell, And Gold If Bond Yields Fall Further
The bond market is the real indicator which we learned to trust in 5 decades. This is the market that's attuned to the real fundamentals. And right now the bond market is telling us a readjustment will be happening soon in the stock markets.
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The Equity Market Outlook Until The First Half Of December 2020 Is Not A Pretty Sight, Liquidity-Wise
Unfavorable seasonal liquidity patterns are teaming up with weak Q4 2020 GDP outlook and a new COVID-19 wave, to undercut the current bullish sentiment in the equity markets.
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The Burden Of The Bullish-Bearish Meme: Unleash The Total Power Of Compounding And Large Numbers Laws, Instead
Forget about being bullish or bearish in your investments. Trade according to the seasonality of systemic liquidity flows instead, especially during an era when the primary driver of risk asset prices is largess from the Fed/Treasury.
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Comments

Latest Comments
2021 Outlook For The Long Bond Yield, Equities And The VIX
4 months ago

Thanks a lot for kind sentiments. Bill

The Equity Market Outlook Until The First Half Of December 2020 Is Not A Pretty Sight, Liquidity-Wise
7 months ago

Yes, I was told that Carl. Busy making money, but will write more.

'We Have Lift-Off': Yields Lead The Charge Higher; Load Up On Equities, Exit Gold Longs, And Sell US Dollars
1 year ago

static.seekingalpha.com/.../...709487453983986.png

Repo rates go up when bank reserves fall because the reserves are being used as collateral in inter-bank lending. See the chart provided above. The reserves are not being lent out. Having little collateral is just like raising rates, and usually that is what happens with the dearth of collateral.

That depends on the context of what Dimon was saying, Rising rates USUALLY steepen the yield curve, and that helps the loan portfolios of banks, not hurt them. You understand of course that banks borrow short and the lend long, so rising rates improves their Bet Interest Margin income.

#What if treasuries, the collateral of choice in derivatives markets, lose too much value too quickly#

Just what hypothetical case of how much yield rise are you talking about and in what time frame? Of course for your fears to be realized the rise in yields, to be disastrous, have to really very high and very rapid. The 10 yr yield fell from the 8 November top of 3.3 to a low of 1.47 in less than a year, but the stock market went to new highs. One can always invoke hypothetical cases. but how realistic is your scenario? Its hard to argue against hypothetical cases because they have never happened. Give me a concrete situation, instead of a hypothetical question, otherwise we will be debating this issue for some time.

In this article: SPX, BITCOMP, ETH-X, UGAZ
'We Have Lift-Off': Yields Lead The Charge Higher; Load Up On Equities, Exit Gold Longs, And Sell US Dollars
1 year ago

Thanks for the comments Gary. In this case, rising yields are associated with rising bank reserves, so that means funding costs (term market rates, e,g, repo) will still be falling. It is easy and cheap enough to get funding from the term (money) market without resorting to margin calls.

In this article: SPX, BITCOMP, ETH-X, UGAZ
What The Fed Did Do At Its Last Meeting On April 30 - May 1, 2019
2 years ago

Fantastic article, Alan. Thanks for sharing.

PAM Sells The DXY And Buy EUR, AUD; Sells Gasoline And Refiners - Opportunistic Trades
2 years ago

Maybe you start with the primers Adam.

In this article: UGA, UUP
Equity Counter-Trend Rally In Place; Yields Bottoming Out; DXY Resumes The Uptrend
2 years ago

Hey Alan,

Thanks for steering me to TalkMarkets. You were on holiday?s?

In this article: QQQ, GLD, SLV, TLT, UUP, SPX, CRAK, DRIP
1 to 9 of 9 comments

STOCKS I FOLLOW

AGQ ProShares Ultra Silver
AMCA iShares Russell 1000 Pure US Revenue ETF
BAR Direxion Daily Gold Bull 3X ETF
BCM iPath Pure Beta Broad Commodity ETN
BITCF First Bitcoin Capital Corp.
BXUB Barclays Bank PLC
BXUC Barclays Bank PLC
CEF Central Fund of Canada Limited
CFA Compass EMP US 500 Vol Wtd ETF
CHGX Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF
CMDT iShares Commodity Optimized Trust
COMT iShares Commodities Select Strategy
CRF Cornerstone Total Return Fund
CSCR Credit Suisse X-Links Cmdty Rotation ETN
DBC PowerShares DB Commodity Index Tracking Fund
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DBS PowerShares DB Silver Fund
DDM ProShares Ultra Dow30
DDP PowerShares DB Commodity Short ETN
DEE PowerShares DB Commodity Double Shrt ETN
DEUS Deutsche X-trackers Russell 1000 CmpsFtr
DGL PowerShares DB Gold Fund
DGLD VelocityShares 3x Inverse Gold ETN
DGP PowerShares DB Gold Double Long ETN
DGZ DB Gold Short ETN
DIA SPDR Dow Jones Industrial Average
DJCI UBS AG, Jersey Branch
DJP iPath Dow Jones-UBS Commodity Index Total Return ETN
DMRL DeltaShares S&P 500 Managed Risk ETF
DOG ProShares Short Dow30
DPU PowerShares DB Commodity Long ETN
DRR Market Vectors Double Short Euro ETN
DSLV VelocityShares 3x Inverse Silver ETN
DULL Direxion Daily Silver Miners Index Bear 2x Shares ETF
DUSA DUSA Pharmaceuticals Inc.
DWAC Elkhorn Commodity Rotation Strategy ETF
DXD ProShares UltraShort Dow30
DYY PowerShares DB Commodity Double Long ETN
DZZ PowerShares DB Gold Double Short ETN
EEH ELEMENTS Linked to the SPECTRUM Large CAP U.S. Sector Momentum Index
EPS WisdomTree Earnings 500 Fund
EQAL PowerShares Russell 1000 Equal Wght ETF
EQL ALPS Equal Sector Weight ETF
ESGL Oppenheimer ESG Revenue ETF
ESGS Columbia Sustainable US Equity Inc ETF
EUFX ProShares Short Euro
EUO ProShares UltraShort Euro
FAAR First Trust Alt Abs Ret Strat ETF
FEX First Trust Large Cap Core AlphaDEX Fund
FMK First Trust Mega Cap AlphaDEX Fund
FTGC FRESH TRAFFIC GRP
FWDD Madrona Domestic
FXE Euro Currency Trust
GBTC Bitcoin Investment Trust
GCC WisdomTree Continuous Commodity ETF
GEUR AdvisorShares Trust
GHE REX Gold Hedged FTSE Emerging Markets ETF
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GLD SPDR Gold Trust ETF
GLDI Credit Suisse X-Links Gold Shares Covered Call ETN
GLL ProShares UltraShort Gold
GLTR ETFS Precious Metals Basket Trust
GOVT iShares Core U.S. Treasury Bond ETF
GSC GS Connect S&P GSCI Enhanced Commodity Total Return Strategy Index ETN
GSEW Goldman Sachs Equal Weight U.S.
GSG iShares S&P GSCI Commodity-Indexed Trust
GSLC Guaranty Financial Corp
GSP iPathSM S&P GSCI Total Return Index ETN
GTU Central GoldTrust
GYEN AdvisorShares Gartman Gold/Yen ETF
HUSV First Trust Hrzn MgdVolatil Domestic ETF
HYG iShares iBoxx $ High Yield Corporate Bond Fund
IAU iShares COMEX Gold Trust
IEF iShares Lehman 7-10 Year Treasury Bond Fund
IVV iShares S&P 500 Index Fund
IWB iShares Russell 1000 Index Fund
IWL iShares Trust
JHML JHancock Multifactor Large Cap ETF
JKD iShares Morningstar Large Core Index Fund
JUNE Dhandho Junoon ETF
LGLV SPDR Russell 1000 Low Volatility ETF
MGC Vanguard Mega Cap 300 Index ETF
NASDX The California Funds Nasdaq 100 Index Fund
OEF iShares S&P 100 Index ETF
OEW Guggenheim S&P 100 Equal Weight ETF
ONEO SPDR Russell 1000 Momentum ETF
ONEV SPDR Russell 1000 Low Volatil ETF
ONEY SPDR Russell 1000 Yield ETF
OPD Guggenheim Large Cp Optimizd Divers ETF
OTPIX Nasdaq-100 Profund Investor Class
OUNZ Van Eck Merk Gold ETF
OVLC Guggenheim US Lg Cp Optimized Vol ETF
PALL ETFS PHYSICAL PALLAD
PDBC PowerShares DB Optm Yd Dvrs Cdty Srt ETF
PHYS Sprott Physical Gold Trust
PLTM First Trust ISE Global Platinum Index Fund
PMOM Principal Sustainable Momentum ETF
PPLC PortfolioPlus S&P 500 ETF
PPLT ETFS Platinum Trust
PRF Powershares FTSE RAFI US 1000 Portfolio
PSLV Sprott Physical Silver Trust ET
PSQ ProShares Short QQQ
PTM E-TRACS UBS Long Platinum ETN
QID ProShares UltraShort QQQ
QLD ProShares Ultra QQQ
QQEW First Trust NASDAQ
QQQ PowerShares QQQ Trust Series 1
QQQE Direxion Trust
QQXT First Trust NASDAQ - 100 Ex
QUS SPDR MSCI USA Quality Mix ETF
RCOM Elkhorn Fundamental Commodity Strat ETF
RJI ELEMENTS Rogers Commodity ETN
RSP Rydex S&P Equal Weight ETF
RVRS Reverse Cap Weighted US Large Cap ETF
RYARX Rydex Series Fds Inverse S&P 500 Strategy Fund
SBUS ETFS Diversified-Factor US Large Cap
SCHX SCHWAB US LARGE CAP ETF
SDOW ProShares Ultrapro Short Dow 30
SDS ProShares UltraShort S&P500
SGOL ETFS Physical Swiss Gold
SH ProShares Short S&P500
SHNY Direxion Daily Silver Miners Index Bull 2x Shares ETF
SIVR ETFS Silver Trust
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SPLV PowerShares S&P 500 Low Volatility Portfolio ETF
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SPPP Sprott Physical Platinum and Palladium Trust
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SPXE ProShares S&P 500 ex-Energy
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SPXU ProShares UltraPro Short S&P 500 ETF
SPXV ProShares S&P 500 ex-Health Care
SPY SPDR S&P 500
SQQQ ProShares UltraPro Short QQQ
SSO ProShares Ultra S&P500
SYE SPDR MFS Systematic Core Equity ETF
TLH iShares Barclays 10-20 Year Treasury Bond Fund
TOMDF Toldos Medical
TQQQ ProShares UltraPro QQQ
UBG E-TRACS UBS Bloomberg CMCI Gold ETN
UCI E-TRACS UBS Bloomberg CMCI ETN
UDN PowerShares DB US Dollar Index Bearish Fund
UDOW ProShares UltraPro Dow 30
UDPIX Ultra Dow 30 Profund Investor Class
UGL ProShares Ultra Gold
UGLD VelocityShares 3x Long Gold ETN
ULE ProShares Ultra Euro
UPRO ProShares UltraPro S&P 500 ETF
URR Market Vectors Double Long Euro ETN
USA Liberty All-Star Equity Fund
USCI United States Commodity Index
USDU WisdomTree Bloomberg USD Bullish ETF Fund
USLV VelocityShares 3x Long Silver ETN
USMC Principal U.S. Mega-Cap Multi-Factor Index ETF
USO United States Oil Fund, LP
USSD WisdomTree Strong Dollar US Equity ETF
USV E-TRACS UBS Bloomberg CMCI Silver ETN
UUP PowerShares DB US Dollar Index Bullish Fund
VFINX Vanguard Index Trust 500 Index Fund
VONE V-One Corporation
VOO VANGUARD FIVE HUNDRED INDEX
VV Vanguard Large-Cap ETF
XLG Rydex Russell Top 50 ETF
XRLV PowerShares S&P 500ex-Rate SnsvLwVtl ETF
ZF The Zweig Fund Inc.
ZSL ProShares UltraShort Silver
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PERSONAL BLOG

Latest Posts
(June 11, 2021, Post-Europe Open): Scalping Long Equities First Thing In Europe Trade; We're Now On Lookout For A Top In Equities
How long can Equities and VIX defy the downward lead of the 10Yr Yield? Not for very long IMO. We're now on watch for typical peak behavior in equities, so we make LABD the canary in the coal mine. If/when LABD reacts violently to the downside
Finally, Redemption; We Will Reset Exited Longs Monday, Looking For Another 2 To 3 More Up-Days
That was a hard-fought $1,872,000 loot for the first trades days of the June month. We alternated between anxiety and boredom in the past 3 days, but we got redemption today.
Getting Set For A Rally In Equities And In Yields; DXY May Rise As Well, Probably Even Gold
Fed Balance sheet liquidity trading models still showing likely decline in Volatility Index (VIX), over the next week or so. That also holds true for the Fed Balance sheet liquidity trading models applied to the S&P 500 Index -- showing likely rally in equity futures, over the next week or so.
(June 1, 2021): PAM Reloads Long Equity Positions And Hedges; 10yr Yield Has Likely Bottomed For A While
SPX rallying higher, per the liquidity models' call, going into the period of June 2 to 7 (optimal, interpolated top thereafter is June 4). No change in outlook, so far, and in fact our conviction strengthened by the precise turns in SPX, as predicted by the trading models.
PAM's Friday Pre-NY Open Briefing, A Detailed And Comprehensive Analysis, Still Applies
Therefore, on balance, we expect equity futures to drift lower today, and that weakness may possibly extend until tomorrow, June 1, as we have depicted in all the schematics of the equity futures forecast progression.
The Correlations Between The Fed's Balance Sheet And S&P 500 Comp Index And VIX Becomes Even Tighter
Updating the charts that had my eyes popping: Changes in the Fed balance sheet Granger-causes VIX changes (0.93, corr coef., from 0.926), and explains 86.6% of (R^2), from 86.3%, from March 16, 2020, to-date
More Downside In Yields; So You Can Keep The Long Equity Trades Over Memorial Weekend, If You Wish
There should be more downside in yields. But issues are posed by a long Memorial weekend. Low in yields may be seen next week. The green circle is probably lowest we can expect today. I believe we should just take what will be offered and look at these trades again next week
10yr Yield Heads Heads Higher Over The Next Two Week; Equities May Still Surprise A Final Rally First Week Of June
Given the sharp uptake in yields over the past two days, it's time to update the model which has anticipated this move very precisely. Per this liquidity change model, yields are now headed higher over the next two weeks.

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