Early Morning Update

“I will not allow yesterday’s success to lull me into today’s complacency, for this is the greatest foundation for failure.” – Og Mandino

Here is a summary of our view into earnings and FOMC:

– Even if we expect the FED to cut, we are not looking for a 50 move and therefore have been using all rips in bonds as tactical selling opportunities.

– Ultimately, we have no inclination to fight rate cuts or even a possible cutting cycle but we are well aware that short-term especially into the decision we could easily have a buy the rumor / sell the news event across the board and these tend to present very interesting asymmetric r/r opportunities.

– Following on from the above we have been positioned long USD and will be trying to ride these FX moves for as longs as we can into the 31st with the expectation of reversing to get back into swing position that have already been good to us this year.

– As discussed on Twitter too, this would imply that we see poor r/r getting long GOLD here, having used the exhaustion at 1450 as an opportunity to fade for a move back into 1400. We would consider a chance to reverse long (from a long term perspective) in the 1350/1300 range as a ‘gift.

– We continue to stress that participants that are riding the free money train expecting indices to continue with this run rate and annualized performance are not humble students on probabilities, cycles and history. Having said this most of out tactical indices plays have been longs for now…

– Unless something unexpected happens, our base case is still for a 5/10% correction in indices somewhere into the next 2+ months but that the correction will very likely provide an extremely interesting buying opportunity for a run up into the end of the year and the 2020 election.

So far so good. We pretty much got what we expected out of the FOMC (btw, what a circus act of a press conference) but we are not going to complain as all in all, we had a lot of interesting intraday trading opportunities too. Keep in mind that we all still have a lot to digest today and post NFP on Friday. Now we have to see if we can get some follow-through and start to strategically position for our next moves.
Today we will release a number of updates for subscribers to the 50 on Markets service; covering the key action in Tech, tactical opportunities on GBP and a general update post FOMC.
Keep in mind that we continue to believe it’s just a matter or time before Trump & CO. come back to press ‘too strong USD’ narrative and very possible act if jawboning stops doing the trick > this is THE key piece of the puzzle now for a number or reasons and possible trade that we will review in today’s webinar session too.
But bottom line: stay nimble throughout the summer weeks.
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Wishing you a great day ahead.

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