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January 18, 2020 | Trading Desk Notes January 18, 2020

The major stock indices continued their relentless rally this week…and I got myself into a frustrating trader’s dilemma. It’s funny now…and I’m sure any traders reading this will be thinking, “Yep…been there…done that,” but it sure wasn’t funny while it was happening! I’ve had a “bias” that stock indices were “stretched” and I’ve looked for opportunities […]

January 11, 2020 | Trading Desk Notes January 11, 2020

Dramatic market price action on Tuesday evening Jan 7/2020 created important Pivot points across a number of key markets…especially gold. Look at it this way…gold rallied ~$125 in 9 days leading up to and including Jan 7…it rallied ~$40 in the last 1 ½ hours to hit a 6 ½ year high at $1,613 (basis Feb […]

January 4, 2020 | Trading Desk Notes January 4, 2020

Can we “trust” price action during low-volume holiday markets? That’s a tricky question…my best answer is that low-volume holiday markets are usually less “valuable” than regular markets in terms of “validating” price action. Look at it the other way round…most traders believe that price action is much more significant if it is accompanied by HIGH volume. […]

December 28, 2019 | Trading Desk Notes December 28, 2019

The most important message from the financial markets in 2019 was, “Don’t Fight The Fed.” The 180 degree turn in Federal Reserve policy…the Powell Pivot…caused markets to realized that it was, once again, “All About The Central Banks.” In December 2018 the Fed raised interest rates and indicated that they expected to be raising rates in 2019…but […]

December 21, 2019 | Trading Desk Notes December 21, 2019

The benchmark North American stock indices keep printing new ATH…while complacency reigns even as the CNN Fear & Greed index is flashing extreme greed. Volatility is ultra-low across all markets, the put/call ratio is at a 5 year low and credit spreads are tight. People are reaching for yield and have no interest in buying downside […]

December 14, 2019 | Trading Desk Notes December 14, 2019

We saw very choppy short term price action this week in stocks, bonds, currencies, gold, and crude oil as markets were rocked by trade deal headlines, the UK vote, the impeachment process, the Fed and ECB meetings…not to mention the endless barrage of Trump tweets! The apparent “de-escalation” of the US/China trade war was seen as […]

December 7, 2019 | Trading Desk Notes December 7, 2019

Stocks, bonds, currencies, crude oil and metals were all rocked this week as sentiment swung dramatically from “risk off” to “risk on.” The benchmark American stock indices traded at ATHs during the low-volume Thanksgiving week…hit new ATHs Sunday afternoon as this week began…but then a flurry of trade headlines sparked a wave of selling that took […]

November 30, 2019 | Trading Desk Notes November 30, 2019

The S+P 500 index hit new ATHs again this week…closing higher 7 of the last 8 weeks…rising ~10% from the early October lows. YTD gains are ~25%. David Rosenberg reports that 95% of the total return YTD has come from P/E multiple expansion, with dividends accounting for 8% while actual earnings account for a negative […]

November 23, 2019 | Trading Desk Notes November 23, 2019

The major American stock indices hit new ATHs Tuesday but turned modestly lower as trade optimism faltered. Bullish momentum has been inspired by easy monetary policy, FOMO and TINA…with little regard for WHY monetary policy has been easy. Investors have been handsomely rewarded for buying dips. Option volatility and put/call ratios signify complacency…the CNN Fear/Greed index […]

November 16, 2019 | Trading Desk Notes November 16, 2019

The runaway bull market in major stock indices continued this week with lots of new ATHs (notably Ex China and EEM…and Trannies and Russell.) I’ve been writing here for the past month that “if” the major indices made new ATHs a lot of people would be amazed and some cautious money managers would be “forced” to […]

November 9, 2019 | Trading Desk Notes November 9, 2019

My best performing trades YTD have come from recognizing that September 3, 2019 was a HUGELY important inflection point across a number of KEY markets. The reversal in the interest rate markets on September 3rd was the epicenter of the inflection point…but the range of markets that reversed on or around that day is truly impressive. […]

November 2, 2019 | Trading Desk Notes for November 2, 2019

The Bank of Canada and the Federal Reserve both roiled markets Wednesday…even though their initial communications were exactly as expected. The BoC left interest rates unchanged but Stephen Poloz made it clear that given all the political and economic uncertainty in the world, especially outside Canada, that it wouldn’t take much for the Bank to […]

October 26, 2019 | Trading Desk Notes October 26, 2019

The S+P 500 index hit a new ATH today…up ~ 6% from Oct 3 lows…up ~11% from mid-summer lows…up ~29% from last December lows. We’re in the heart of quarterly earnings season…companies that beat are aggressively bid…companies that miss are clobbered. Markets are embracing risk…implied vol is back to mid-summer lows…even as global economic growth […]

October 19, 2019 | Trading Desk Notes October 19, 2019

Currency market trends often go WAY further than you can imagine…they develop a self-reinforcing momentum (which we used to call “Leads and Lags”) and then they turn on a dime and go the other way. I’ve been generally US Dollar bullish for years…but recently I’ve started buying other currencies against the USD…thinking it may be […]

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 […]

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