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Sell The News (Sorta)?

01-15-2020

The market revved higher, gaining about 0.5% in front of the signing of phase one of the trade deal. It will be interesting to see exactly what's in it such that one can actually comment on whether it comes anywhere close to matching the hype associated with it. I'll definitely be taking the "under," but I'd like to see the deal first.

Post the "big news," nothing happened except some leakage (as the market sort of acted like a real market for a change and finally sold the news it had discounted about 100 times). By day's end the market was flat to slightly green, though beneath the surface some stocks were roughed up a little.

Away from stocks, green paper was a bit weaker, fixed income was a tad higher, and the metals gained ground, with silver gaining 1% versus 0.75% for gold, and the miners were pretty firm.

Noise Pollution Pan American Silver announced fourth-quarter production results and 2020 guidance, which all looked fine. Wesdome did the same and that stock fell 10%, I think largely because it had run in front of the news and the guidance was only good and not great, though I do think the company's probably being conservative. (Those who have been waiting to buy a dip, we now have one.)

I continue to get questions on almost every squiggle in the miners and I would just like to point out that 90% of the time, there is no information in the motion. I remember in particular a couple of quarters back when folks were afraid that Pan American was breaking down because of some chart pattern. I received many emails about "what was wrong" and obviously now you can look back and see nothing was. That's not to say all market action is meaningless, it's just that in this particular sector most of it is.

Positions in stocks mentioned: long PAAS, long PAAS calls, long WDOFF.