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October 12, 2019 | Trading Desk Notes October 12, 2019

  This was a perfect week to be reminded that trading is not a game of perfect. I was long stocks and crude and short gold early in the week…got cold feet and bailed out with tiny losses just before those markets moved hard against me. I was happy to have played just-in-time defense. But later […]

October 5, 2019 | Trading Desk Notes October 5, 2019

The major US stock indices fell sharply (DJIA down 1,200) Tuesday through Thursday as weaker-than-expected PMIs provided more evidence that the economy is slowing and as political tempers flared in Washington. The stock indices bounced back hard Thursday/Friday, recovering ~55% of the earlier losses on anticipation of more cuts from the Fed and as the key […]

September 28, 2019 | Trading Desk Notes September 28, 2019

Political turmoil is having an out-sized impact on markets these days and it’s hard to not get sucked into trading on the latest political news flash or tweet. It’s not that the tweets and news flashes can’t move markets…they obviously do…but I want to trade the market not the tweet. For instance, I’ve been thinking that […]

September 21, 2019 | Trading Desk Notes for September 19, 2019

The attack on the Saudi oil processing facilities caused WTI to jump $8 to ~$63 when markets opened Sunday afternoon…but within a couple of days WTI fell back ~$5 to ~$58. The price jump was attributed to a risk premium build, fears of more attacks and/or retaliation, talk of $100 oil, as well as to the […]

September 14, 2019 | Trading Desk Notes September 14, 2019

We’ve seen dramatic price reversals across markets since the Labor Day weekend…especially in the bond market where yields had their biggest one-week jump since Trump’s election. Analysts may point to the softening of tensions between the USA and China, or to stronger-than-expected economic reports which dampened the “we’re-falling-into-a-recession” story but from my perspective the relentless […]

September 7, 2019 | Trading Desk Notes – Sept 7th

The Canadian dollar up a cent this week trading at 76 cents after the Bank of Canada held rates steady on Wednesday and we posted an incredibly strong 81,100 gain in employment for  the month of August. This move higher in CAD brought it to the middle of the small 74 to 77 cent range it has […]

August 31, 2019 | Trading Desk Notes August 31, 2019

Going into the Labor Day weekend, after a very choppy August, and ahead of the “back to reality” moment that hits every year when trading resumes in September we have the US Dollar strong like Big Bull…the USDX is at 28 month highs and the St. Louis Fed Trade Weighted USD Index is at All […]

August 24, 2019 | Trading Desk Notes August 24, 2019

A trader’s job is to imagine how a market might be different…at some point in the future…from the way it is now. But before trading on his opinions about where the market may be going he needs to see signals that confirm his opinions. He also needs to be aware that his opinions may cause […]

August 17, 2019 | Trading Desk Notes – August 17

Markets continue to aggressively reprice interest rates lower. There have been massive capital flows into bond funds, the US long bond has hit a record low yield and the sum of negative yield bonds continues to rise. Capital is seeking a safe haven not only because slowing global economies and rising recession risks are expected to […]

August 3, 2019 | Trading Desk Notes August 3, 2019

The market had a lot to digest this past week and thinner-than-normal mid-summer conditions may have exaggerated the moves…but it still feels like there’s a “sea-change” happening here that may be foreshadowing bigger moves to come. My definition of positioning risk: Being forced to cover…with increasing urgency…positions which used to look very good…before everything changed. Example: […]

July 20, 2019 | Trading Desk Notes July 20, 2019

Summer Doldrums??? Gold surging to a new 6 year high up >$50 in 3 days, Silver up 8% on the week, major US share indices hitting new All Time Highs with buybacks on pace for another record year even as China/US trade talks stall, Crude oil down 10% on the week on signs that US/Iran […]

July 13, 2019 | Trading Desk Notes July 13, 2019

Three weeks ago (June 21/19) I noted that the increasingly aggressive repricing of future interest rate expectations (soaring bond prices) was the “irresistible force” that had been impacting all markets since late last year. My guess was that the falling interest rate trend had reached an exponential “blow off” phase with the market pricing a […]

July 6, 2019 | Trading Desk Notes – July 6th

It was a week of celebration! Here we celebrated Canada Day, the US celebrated Independence day, but investors had even bigger celebrations as the Nasdaq, S&P and Dow all hit record highs! It must be nothing but sunny skies ahead for investors, yet this same week German yields were hitting all-time lows with the 10yr […]

June 29, 2019 | Trading Desk Notes June 29, 2019

June 2019 market performance highlights: Gold up ~$140 (11%) from late May lows, closing higher for 5 consecutive weeks, hitting a 6 year high,  WTI up ~$9 (17%) from early June lows, closing higher 11 of the last 12 days, CAD up ~2.5 cents (3.3%) from late May lows, hitting 8 month highs…strongest of the G10 currencies against the USD, USDX down […]

June 22, 2019 | Trading Desk Notes June 21, 2019

The irresistible force that moved all markets the past couple of months has been the increasingly aggressive repricing of future interest rate expectations. With the market now pricing a 90% chance of 75 bps of cuts from the Fed over the next 6 months…with a good chance of 50bps in July alone…I believe the exponential […]

June 15, 2019 | Trading Desk Notes June 15, 2019

The US Dollar surged higher this week…after “backing off” the last 3 weeks. All of the major Eurozone currencies plus CAD, AUD and NZD tumbled with AUD and NZD now near multi-year lows. The GBP was especially hard hit as it looks like Boris (hard exit) Johnson will become the new PM. It was interesting […]

June 8, 2019 | Trading Desk Notes – June 8th

US interest rates have dropped like a stone since last November…with the rate of decline dramatically accelerating the last 4 weeks. The bond market has rallied hard as investors have done a HUGE “180” in terms of their interest rate expectations…have increasingly anticipated an economic slowdown…rate cuts from the Fed…and as capital has sought “safety” […]

June 1, 2019 | Trading Desk Notes – June 1st

Stocks, crude and bond yields fell in May…the USD inched higher. The S+P 500 hit a 2 ½ month low this week…down ~7% from All Time Highs reached May 1st…giving back ~1/3rd of the rally from the December lows…but still up ~10% YTD.  Bullish sentiment was near 90% (greed) at the May highs and is […]

May 25, 2019 | Trading Desk Notes – May 25th

Global financial markets were driven more by fear than by greed this week…but there was no real panic…well maybe a little in the energy markets…with WTI tumbling ~13% in 3 days…but the S+P 500 Index is only down ~5% from its May 1st ATH and is still up ~20% from its December lows. Equity trading volumes […]

May 18, 2019 | Trading Desk Notes – May 18th

The US Dollar Index closed higher every day this week…the Chinese RMB and the Korean Won continued to tumble…the British Pound closed lower for 10 consecutive days…falling ~4% on endless Brexit uncertainty.   The DJIA futures contract tumbled to a 3 month low on Monday…trade wars and Iranian tensions…but bounced back the rest of the […]

May 11, 2019 | Trading Desk Notes – May 11th

The S+P 500 stock index fell hard this week…after closing at all-time highs last week…as sentiment about progress on the China/USA trade talks swung from coming-along-ok to total-breakdown. The market was ripe for a hit given bullish sentiment on the major stock indices had at been at extreme levels the past couple of weeks…and immediately […]

April 27, 2019 | Trading Desk Notes – April 27th

The US Dollar surged higher against virtually all other currencies this week with the US Dollar Index (USDX) hitting its best level since May 2017. Last week I wrote that the USDX was setting up to surge through the upper boundary (around 98) of a bullish rising wedge pattern and could make a run at the […]

April 21, 2019 | Trading Desk Notes – April 20th

The US Dollar may be setting up to surge sharply higher.  The US Dollar Index (USDX) has been trending higher for the past year…a breakout above the recent highs around the 98 level could set up a challenge of the 14 year highs around 103 made over 2 years ago. The Swiss Franc closed at a […]

April 14, 2019 | Trading Desk Notes – April 13th

Is it the middle of April or the middle of August? The weekly trading volume of shares on the US indices and the number of futures contracts that traded this week was the lowest since last summer and among the lowest weekly levels of the past several years. This low volume has reduced price volatility with […]

April 6, 2019 | Trading Desk Notes – April 6th

“Politics” is increasingly on a collision course with Central Banks…and  that may be become the “new” most important driver of world markets. On July 7/18 I wrote:  Politics has replaced Central Banks as the most important driver of world markets according to Christopher Wood, financial analyst with CLSA, and I agree. It seems that for […]

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