Don't Be an Exit Strategy for Whales in Trump 2.0

Housekeeping: Though not remotely about Gold this analysis is a must re-read for Premium GoldFix Subscribers. Given the timely ZH post : Hartnett: Trump 2.0 Unleashed US TINA, And This Is How It Ends, it is imperative before Trump's inauguration to be prepared

Don't Be an Exit Strategy for Whales

Authored by GoldFix, ZH Edit

Contents: (1300 words)

Intro: The Bank’s New Calls
Better Never Than Late!
What’s Really Going On?— Leftovers
Key Excerpt
Final Comment: Urgency?
Margin Call Reminder

1- Intro: The Bank’s New Calls

October 8th, 2024

A well known bank just made some notable calls this week in two huge reports. They’ve:

raised their year-end S&P 500 target,
reduced recession odds for the U.S.,
and upgraded China to overweight status.

These moves, while signaling optimism, are less about new revelations and more about a shift in narrative—one that’s already been playing out behind the scenes.

2- Better Never Than Late

Traditional sell-side research (The excerpts reports we breakdown here) helpful as they are, are never actionable without context. The real insights come from prop desks, flow traders, and people who can quickly separate signal from Noise.2

Analysis generated from those flow/prop desk observations are reserved for a select group of high-value clients, and by the time the broader sell-side team catches on3, the prop desks have often been positioning for weeks.

Speaking for a moment for this process as it relates to our trading and your reading. Some reports are the ones we focus on for purely tactical moments, and even then we don't always listen to them. The main reports are used to form investment theses (like Gold in 2021 and Chips in 2022) opinions and share them with you all. Just never for our “Should I Buy, Sell or Wait?” moments.

In essence, if you’re reading it on the sell-side without someone to help with the context, it’s always too late for a profitable trade in a 1 to 3 month time frame. Usually you have to “hold it for the long run” to make money, if you make any at all. Not only do those type trades cost money and time; but their effects can linger psychologically and cloud judgment for the next decision.

3- What’s Really Going On?— Leftovers

When major sell-side desks make moves like this, the goal isn’t to break new ground. It’s to amplify trends that have already played out. By the time they’re telling the broader market to get in, insiders are already preparing their exit. [ABRIDGED]

In short, if you’re acting on these calls now, you’re probably too late. The smart money has already positioned. Don’t take it from us. Here’s an excerpt from our favorite financial website Perhaps the most important post from them since 2009 for our purposes. [ABRIDGED]

5- Final Comment: Urgency?

When any bank or any trading desk gets this obvious (as pictured above) in their contradictions as demonstrated above, it is frequently because they sense a window of opportunity may be running out on exiting their own positions, or those of their biggest clients who are chomping at the bit to sell. When anyone is willing to risk their firm’s reputation on a trade, that’s a sign of urgency. We do not sense any sign of urgency in the current Trump euphoria yet. Post inauguration however, may be another thing entirely. With that observation, here’s a quote from Margin Call

“We are selling to willing buyers at the current fair market price -- so that we may survive

Good morning pic.twitter.com/1sH5KsJh1O
— VBL’s Ghost (@Sorenthek) November 17, 2024

He's not wrong. As the lyric says: It's not what they were selling, its what you were buying that matters

Continues here

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