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February 9, 2019 | Trading Desk Notes – Feb 9th

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

Slowing Global Growth concerns have been hitting some markets more than others…German bond yields, for instance, have been falling steadily since early October…they are now nearing their historic lows made in the Brexit summer of 2016…while US equity markets, crude oil, copper and the commodity currencies have rallied from their oversold Christmas lows on the “Fed is done tightening” idea.

My macro view for the next few months is that slowing global growth concerns become the BIG story across asset classes (overshadowing the “Fed is done tightening” idea) with market sentiment becoming increasingly risk adverse which produces 1) lower bond yields, 2) wider credit spreads, 3) lower share prices, 4) lower commodity prices, and, 5) a stronger USD.  Gold made its low for the year in mid-August 2018…just as the USD was making a 14 month high…and has rallied ~$150 since. Gold often trades as the “mirror image” of the USD but I think it’s also benefited from a “haven” bid just like the German bond.

German bonds chart – prices rise as yields fall:


My favorite trade the past couple of weeks has been long  US 10 year treasuries as they rally on slowing global growth. The Eurozone bond rally helps “pull” US bonds higher and treasuries may also catch a bid if the stock market rolls over.


This week I bought S+P puts thinking that the rally from the Christmas lows may be rolling over.


I’m expressing my bearish view on commodities with short positions in WTI and copper. Both of these commodities (and the COMDOLS) have been strongly correlated with the bellwether US stock market since the turn of the year and may be rolling over.

I’m expressing my bullish view on the USD with short positions in CAD and NZD…they “rolled over” a day or two ahead of the S+P.



I trade futures and options and I’m quick to abandon my positions if they are not working. My 40+ years of experience trading these markets tells me that most of my trades will result in small profits or losses which more or less offset each other. I definitely want to avoid taking any big losses and hopefully I’ll occasionally get a big winner.

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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February 9th, 2019

Posted In: Victor Adair Blog

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