#$mbb

[jlfmi]

High Low Friday – 8/7/2020

Here are some of the most noteworthy highs and lows from across the markets for Friday, August 7, 2020.

SPDR Gold Shares $GLD Hitting All-Time Highs

U.S. 30-Year Fixed Mortgage Rate Hits All-Time Low

20 Years Later, Qualcomm $QCOM Finally Hits New All-Time High

Corn Testing ~13-Year Lows…Again

Biotech ETF $IBB Testing Breakout Level At Former Highs

If you’d like to see these charts as they come out in real-time, follow us on Twitter and StockTwits. And if you’re interested in the daily “all-access” version of all our charts and research, please check out our site, The Lyons Share. You can follow our risk-managed investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

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Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

[jessefelder]

Is This The Real Estate ‘Echo Bubble’?

It was less than a decade ago that a massive housing bubble, driven equally by greedy bankers and speculators, set the stage for what was to become the worst financial crisis in history. How quickly they forget?

Not only is the sort of easy money that fueled the bubble making a comeback…

…so is the rampant speculation that drove prices to the moon.

Has nobody explained to them the concept of an, “echo bubble”? From Investopedia:

A post-bubble rally that becomes another, smaller bubble. The echo bubble usually occurs in the sector in which the preceding bubble was most prominent, but the echo is less dramatic.

I guess they must believe, “this time is different.” And once again I’ve got to tip my hat to Mr. Vonnegut. For it’s not only those who, ‘can’t remember the past that are condemned to repeat it,’ as Santayana famously suggested. Certainly, who can have already forgotten 2008? Sadly, it seems it’s just human nature to fall prey to the same dangerous instincts time and again.

[jlfmi]

Taper This! MBS Bond ETF Breaking Out

With all the fear and loathing surrounding the Fed's tapering of its latest bond-buying QE binge, someone forgot to tell the MBS market -- at least, the iShares MBS Bond ETF (MBB), which broke out to a 2-year high yesterday. And that does not even include dividends.

Unlike the taper tantrum of June-July 2013 which sent the ETF down some 5%, MBB has been very well behaved in the face of actual tapering. After consolidating its September-May rally for the past 5 months, the ETF broke out to new highs yesterday and looks ready for the next leg upward. This is why we always rely on price instead of "conventional wisdom" or conjecture.

It's always possible, especially considering the recent plethora of false breakouts that this could too fail. However, for now, MBB seems to be saying Taper-Shmaper.

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