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September 22, 2018 | Trading Desk Notes – Sept 22

Victor Adair, author of The Trading Desk Notes, began trading penny mining shares while attending the University of Victoria in 1970. He worked in the mining business in Canada and the Western United States for the next several years and also founded a precious metals trading company in 1974. He became a commodity broker in 1977 and a stock broker in 1978. Between 1977 and his retirement from the brokerage business in 2020 Victor held a number of trading, analytical and senior management roles in Canada and the USA. Victor started writing market analysis in the late 1970’s and became a widely followed currency analyst in 1983. He started doing frequent media interviews in the early 1980’s and started speaking at financial conferences in the 1990’s. He actively trades his own accounts from The Trading Desk on Vancouver Island. His personal website is

“Risk On” is the prevailing market mood and it’s been showing up everywhere:

Global stock markets have been rallying since their early September lows. The leading American indices (S&P, DJIA, DJT) have made new All Time Highs, the Euro Stoxx index is up ~5% , the Nikkei is up ~7%, and even the EM stock indices have bounced back a bit after tumbling ~20% from their January highs.


The US 10 year Treasury bond has fallen for 4 consecutive weeks with the yield hitting a 7 year high this week at 3.09%.

The US Dollar Index hit a 14 month high in August but closed lower 5 out of the past 6 weeks. Even EM currencies which had been crashing to All Time Lows have bounced back a bit against the USD the last week or two.


Commodity markets have also been buoyed by the “risk on” mood with front month WTI up ~12% from its August lows (made just as the USD was turning down from its 14 month highs) and copper  has rallied >10% this week after a very steep 22% tumble from its June highs.

Cannabis stocks may be the wildest example of the current “Risk On” mood…and I find it VERY interesting that a number of these stocks started their recent spectacular rallies in mid-August just as the USD was turning down from its 14 month highs.

So what now? Will I be jumping on the “Risk On” market moves…will I be positioning for the moves to reverse? No to both. I will be watching…I think the market now has “No Fear” and I have no idea how long that condition may persist…the longer it lasts the greater the positioning risk once the inevitable turn happens. I will be watching for opportunities in all markets, as usual, but I think the US Dollar is key.

PI Financial Corp. is a Member of the Canadian Investor Protection Fund. The risk of loss in trading commodity interests can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. In considering whether to trade or the authorize someone else to trade for you, you should be aware of the following. If you purchase a commodity option you may sustain a total loss of the premium and of all transaction costs. If you purchase or sell a commodity futures contract or sell a commodity option or engage in off-exchange foreign currency trading you may sustain a total loss of the initial margin funds or security deposit and any additional fund that you deposit with your broker to establish or maintain your position. You may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the requested funds within the prescribe time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult to impossible to liquidate a position. This is intended for distribution in those jurisdictions where PI Financial Corp. is registered as an advisor or a dealer in securities and/or futures and options. Any distribution or dissemination of this in any other jurisdiction is strictly prohibited. Past performance is not necessarily indicative of future results 

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September 22nd, 2018

Posted In: Victor Adair Blog

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