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November 17, 2018 | Trading Desk Notes – Nov 17th

Senior Vice President and Derivatives Portfolio Manager. Victor began trading financial markets over 45 years ago and has held a number of senior executive positions during his career as a commodity and stockbroker. Over the years he has provided considerable market analysis via radio and television and at financial conferences. His primary brokerage business is providing corporate accounts with risk management services using exchange traded derivatives. He actively trades currencies, interest rates, precious metals, stock indices and commodities for his own accounts.

Bonds and gold rallied and the US Dollar dropped this week as Fed Chairman Powell and Vice Chairman Clarida both signaled that the Fed may be less aggressive raising interest rates next year than the market had expected.  They both saw signs of slowing global growth.

The US Dollar Index had jumped to new 17 month highs early this week so maybe it was due for a 1% correction.

Gold had dropped for 7 consecutive days (falling ~$40) so maybe it was due for a $28 bounce.

Bond prices had fallen to 4 year lows in early November, so maybe they were due for a bounce to 2 month highs.

Energy markets saw WTI bounce ~$3 after tumbling from $77 to $55 (28%) in 7 weeks as sentiment swung from “supply shortage” to “glut” while Nat Gas prices spiked to 5 year highs on worries of an inventory “supply shortage” ahead of the North American winter.

Brexit turmoil created very choppy (mostly negative) price action in the British Pound.

The Canadian Dollar fell ~3 cents from late September to mid-November while WTI fell $22. Western Canada Select traded below $15BBL this week. US/Canada interest rate spreads moved in favor of the US, yet CAD rallied ~1/2 cent off this week’s 4 month lows in reaction to weakness in the USD.

The major US stock market indices tumbled ~12% in October. A rebound rally recovered about 60% of those losses in the following 2 weeks but then prices fell again. Intraday price choppiness has been VERY high. The major indices are now ~8% below their All Time Highs…up ~2% on the year.

The Toronto Stock Index is now 9% below the All Time Highs made in July…down~5% on the year.

My short term trading has been active. I’ve been both long and short the US stock indices and have managed to come out money ahead. I’m trading small size given the big intraday price swings. I’m looking for US stocks to rally going into the Thanksgiving week but if they don’t I’ll exit quickly.

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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November 17th, 2018

Posted In: Victor Adair Blog

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