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March 6, 2021 | Trading Desk Notes For March 6, 2021

Speculative excesses peaked in February and markets have been in a correction phase. Time for a bounce? The stock market rally from the March 2020 panic lows paused in September/October but then resumed with a vengeance following the November election and the Pfizer vaccine announcement.   Tech was the initial go-to favorite, especially BIG CAP […]

February 27, 2021 | Trading Desk Notes For February 27, 2021

Interest rates surge higher: speculative bubbles pop. US Treasury 10-year bond yields hit a record low ~0.52% early last August (as gold hit a record high) and then trended higher for several months. This year, the trend accelerated and then surged higher, with the 10-year yield briefly touching 1.61% on Thursday following a dismal 7-year […]

February 20, 2021 | Trading Desk Notes For February 20, 2021

Interest Rates Are Sharply Higher On Reflation/Inflation Concerns Copper is at a 10-year high and has doubled in the last 11 months. Half of those gains came since the November 3rd elections. Freeport-McMoRan is up ~600% from last year’s lows. WTI crude oil has jumped over 80% since the November elections. Lumber has quadrupled from last year’s lows, […]

February 13, 2021 | Trading Desk Notes For February 13, 2021

North American Stock Indices Keep Rocking The major North American stock indices hit new All Time Highs again this week even as Old School valuation metrics continued to flash warning signs. It’s hard to know if buyers were motivated by optimism over vaccine programs, the coming re-opening boom, the wonders of centrally planned fiscal stimulus […]

February 6, 2021 | Trading Desk Notes For February 6, 2021

Old School valuation metrics don’t matter these days, we’re trading mass psychology In 3 of the last 5 weeks the DJIA futures have had more than a 1,000 point high/low range. Last Friday the index closed at a 6 week low, opened down Sunday afternoon and then rallied ~1,600 points to this Friday’s high. Old […]

January 30, 2021 | Trading Desk Notes For January 30, 2021

Did somebody ring a bell? An earthquake rumbled through the financial markets this week and sharpened everybody’s sense of risk. There’s been a growing concern about excessive speculation for the past few months but that was in anticipation of markets crashing – not ripping to the upside!   Good for you if you were on […]

January 23, 2021 | Trading Desk Notes For January 23, 2021

Major US stock indices hit new highs on inauguration The major American stock indices hit All Time Highs this week when Joe Biden was inaugurated as the 46th POTUS. Since the Nov 1st Key Turn Date, just before the election, the DJIA and S+P have gained ~19%, the Nasdaq 100 ~23%, the Russell 2000 ~40%, while the […]

January 16, 2021 | Trading Desk Notes For January 16, 2021

The pro-risk trade is very extended / at risk of a correction My core trading idea for the past month or so has been that the pro-risk trade (long stocks, long commodities, short US Dollar) is very extended and is at risk of a correction. I have been watching for opportunities to fade pro-risk market […]

January 9, 2021 | Trading Desk Notes For January 9, 2021

“In the short run the market is a voting machine, but in the long run it is a weighing machine.” Benjamin Graham   Across the spectrum of traders and investors there would be a wide dispersion of definitions for “short run” and “long run” but for the purposes of my personal trading “short run” means a […]

January 2, 2021 | Trading Desk Notes For January 2, 2021

Why do you believe what you believe? If you choose the trading life, you will have to deal with these existential questions, “Who do you chose to believe, why do you believe what you believe, how much of that is already priced in and what are you going to do when you’re wrong?”   In […]

December 19, 2020 | Trading Desk Notes For December 18, 2020

The Major American stock indices hit new All-Time Highs again this week with quad-witching and the inclusion of Tesla in the S+P 500 index on Friday. The DJIA is up >4,000 points (15%) since the Oct 30 Key Turn Date (circled on today’s charts) when a number of different markets all reversed “on a dime” as market […]

December 12, 2020 | Trading Desk Notes For December 12, 2020

Pro-risk Market Psychology drives stocks and commodities higher, US Dollar lower Market psychology has been very pro-risk the past 6 weeks, especially since the Pfizer vaccine announcement on November 9th created a real-world justification for “looking beyond” short term economic concerns to a much brighter post-virus future.   Major stock indices have rallied to new All Time […]

December 5, 2020 | Trading Desk Notes For December 5, 2020

You Ain’t Seen Nothing Yet Relentless bullish enthusiasm continues to drive the pro-risk Everything Rally. The leading American stock indices keep making new All-Time Highs (after record gains in November) as legions of market analysts tell investors to “look beyond” any evidence of current economic weakness to a post-virus demand boom in 2021 once vaccines have been […]

November 28, 2020 | Trading Desk Notes For November 28, 2020

Market positioning, sentiment and psychology are strongly reinforcing consensus expectations. Caution is advised. Markets this week: MAJOR NORTH AMERICAN STOCK INDICES ARE AT ALL TIME HIGHS. COMMODITY INDICES ARE AT 2 ½ YEAR HIGHS. THE US DOLLAR INDEX IS AT A 2 ½ YEAR LOW. GOLD IS DOWN ALMOST $300 (14%) FROM ITS AUGUST HIGH […]

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 […]

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