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November 21, 2020 | Trading Desk Notes For November 21, 2020

Mark Twain tells us that it ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so. We all make assumptions when we trade. For instance, we know that we don’t know “for sure” if a market will be up or down tomorrow but we definitely […]

November 14, 2020 | November 14, 20 Trading Desk Notes: Vaccine “Silver Bullet” Drives Stock Indices To All-Time Highs

The Vaccine “Silver Bullet” The Pfizer vaccine news was released Monday just before 7 am New York time. The overnight Dow futures surged ~1,400 points within the next 2 hours to an All-Time High of “30,000” for a gain of ~4,000 points (15%) in only 7 trading days. As the psychological impact of a “silver bullet” vaccine spread throughout the market […]

November 7, 2020 | Trading Desk Notes For November 7, 2020

Stock indices tumble and bounce back on the US election The DJIA dropped ~2,500 points (9%) from mid-October to last Friday’s low but recovered those losses in 4 days this week. Volatility jumped sharply when the indices fell but collapsed this week when stocks bounced back. I was short stock index futures as they tumbled […]

October 31, 2020 | Trading Desk Notes For October 31, 2020

There was a very important Key Turn Date (KTD) at the beginning of September when several different market trends all REVERSED direction at the same time. Those reversals set up the market the trends of the past 2 months. (I’ve circled the KTD in all of today’s charts.)   My trading in September and October […]

October 29, 2020 | The Trading Life: Sizing Your Trades Oct 29, 2020

You can never have enough on when you’re right.   I just closed out some “risk off” positions (short stocks, Euro and gold) that I’ve had on for most of the past 2 weeks. I caught some good moves, especially short stocks, and I decided it was time to take profits. It was one of […]

October 24, 2020 | Trading Desk Notes October 24, 2020

One of my basic risk management trading principles is to keep the time frame of my trading in sync with the time frame of my analysis. To do otherwise can easily lead to BIG losses.   For instance, if I buy gold because my “analysis” is that I think it could jump $10 today I […]

October 17, 2020 | Trading Desk Notes For Oct, 17, 2020

Two months ago gold was making new All Time Highs around $2050 as the US Dollar was hitting 28 month lows and the real interest rate on US Treasury bonds was hitting 40 year lows. But since then gold prices have fallen back ~$200 while the USD and real rates have drifted sideways.

October 10, 2020 | Trading Desk Notes for October 10, 2020

What’s been driving the strong “Risk On” market psychology since late September? We think the market is not only (increasingly) pricing out Trump but is also pricing out a “contested election.” The market is pricing in more (maybe much more) stimulus…either because Trump “pulls out all the stops” and Mnuchin/Pelosi do a deal (which the Senate […]

October 3, 2020 | Trading Desk Notes October 3 ,2020

Successful trading means positioning for what you think will happen…not for what you hope will happen. When it comes to analyzing the market impact of political developments we therefore focus on what we think will happen rather than on what we wish would happen. We think the Trump/Biden “debate” probably hardened Wall Street’s (previously held) […]

September 26, 2020 | Trading Desk Notes September 26 ,2020

Equity markets were driven sharply higher this summer and the US Dollar was driven to 2 year lows by waves of self-reinforcing “risk on” market psychology…but that changed Big Time at the beginning of September. We’re calling the early September reversals a Key Turn Date (KTD) because a number of markets reversed course at/around the same […]

September 19, 2020 | Trading Desk Notes September 19, 2020

Massive stimulus from governments and Central Banks created a powerful “risk on” market psychology that drove equities and commodities higher and the USD lower over the past few months. We think this “risk on” market psychology in the process of reversing and we’ve been trading accordingly. Mega cap tech had a spectacular run in this “risk […]

September 12, 2020 | Trading Desk Notes September 12, 2020

The big drivers of market psychology year-to-date have been, 1) the virus (and its anticipated knock on effects) followed by, 2) massive stimulus from Central Banks and governments. The virus psychology drove equities and commodities down hard…while driving bonds and the USD higher…whereas the stimulus has had the reverse effect on equities, commodities and the USD. […]

September 5, 2020 | Trading Desk Notes September 5 ,2020

The Spuz and Nasdaq 100 raced to All Time Highs early this week…on surging volatility…as word circulated that a whale (apparently Softbank) was buying billions worth of call options…it wasn’t just the Retail Army trading in their pajamas. The Put/Call ratio plunged to new lows…the CNN Fear/Greed index hit full-on greed…and then the fever broke […]

August 29, 2020 | Trading Desk Notes August 29 ,2020

Since the February All Time Highs we’ve had the shortest bear market ever…followed by the fastest recovery to a new record high in over 80 years. We’re very lightly positioned at the end of the week…thinking that September may bring some serious reversals across markets. Don’t be short volatility!   The Nasdaq 100 has rallied […]

August 22, 2020 | Trading Desk Notes August 22, 2020

The news that “Buffet Buys Barrick Shares” spurred gold to rally more than $70 from last week’s close to Tuesday’s highs…the US Dollar Index falling to new 2 year lows also buoyed gold. We shorted gold on that rally and bought the US Dollar against the Euro currency.   We covered a short gold position last […]

August 15, 2020 | Trading Desk Notes August 15 ,2020

Question: How many times have we seen markets get “silly” during the “dog days” of August…only to get hit with “reality” immediately after the Labor Day weekend? Answer: More than enough times to make us wonder what qualifies for “silly” these days…knowing full well that “silly” is usually hiding in plain sight…and the clues (at […]

August 8, 2020 | Trading Desk Notes August 8 ,2020

On June 20, 2020 we wrote, “Markets currently seem to be highly correlated into a simple “risk on / risk off” dichotomy…with the emini S+P futures leading the way while other markets follow.” Some people refer to it as, “All One Market,” and from a macro perspective it’s been a “risk on” market since mid-June as: […]

August 1, 2020 | Trading Desk Notes August 1, 2020

The US Dollar Index (USDX) had its worst month in a decade in July…falling >5% to a 2 year low. USDX has dropped >8% from mid-May when Macron/Merkel launched their plan to create a jointly guaranteed recovery fund for Europe…which launched a sizzling Euro rally on thoughts that this might be a major step towards […]

July 25, 2020 | Trading Desk Notes July 25, 2020

We look for trading opportunities in exchange listed futures and options. Our time frame is a few days to a few weeks. We believe that net trading profits over time come more from risk management than from trade selection…but a good trade selection process is important. To that end we develop “fundamental” market views and then […]

July 18, 2020 | Trading Desk Notes July 18, 2020

You have to ask yourself, “What are we trading these days?” 50 million Americans have applied for first time jobless benefits since the  lockdowns began and the Nasdaq 100 has rallied >60% from the March lows to this week’s All Time Highs. For most of my trading life I’ve made a point of knowing when economic […]

July 11, 2020 | Trading Desk Notes July 11, 2020

Our base case has been that all of the central bank and government stimulus would not prevent pervasive global demand destruction as the virus continued to spread…that the stimulus inspired “risk on” trade in financial markets would “roll over” once the divergence between the real economy and the financial markets got too wide. However…as traders we […]

June 27, 2020 | Trading Desk Notes June 27, 2020

I trade futures and options for my own account. My initial time horizon for a trade is usually a few days to a few weeks. Sometimes, if my view of the market is working I will maintain a position for months. I believe net profits over time come from disciplined risk management…not from having a great […]

June 20, 2020 | Trading Desk Notes June 20, 2020

Markets currently seem to be highly correlated into a simple “risk on / risk off” dichotomy…with the emini S+P futures leading the way while other markets follow. If the spuz is bid then WTI catches a bid while the USD and bonds are offered…and vice versa. The tricky thing with trading off inter-market correlations is […]

June 13, 2020 | Trading Desk Notes June 13, 2020

I thought the stock market’s huge rally off the March lows was a bear market rally because of the huge dis-connect with the real economy. I thought demand destruction was so powerful that stimulus from the Fed and the government was only going to keep the economy from falling into a depression…not turn it around. I […]

June 6, 2020 | Trading Desk Notes June 6, 2020

A Key Turn Date occurs when a number of different markets all reverse direction at the same  time…giving us a very valuable window into market psychology. At the risk of being scorned by psychologists I’d say that a KTD may be an example of synchronicity in the markets…when “meaningful coincidences” are a  manifestation of some […]

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