Miscellaneous
More importantly, if you are interested in subscribing to the ’50 on Markets’ service, please note that it will remain active throughout the holiday period and that we will be releasing a number of key Video Updates before year end.
Out of Office
Just a short post to let everyone know that we’ll be away next week and fully back in action on August 20th.
Our base-case is still that markets are in a choppy topping pattern and are being extremely complacent about Geo-economic / Geo-political risk.
There is a distinct possibility that we may have seen the best data prints of this business cycle and yes, markets continue to be extremely complacent about Geo-economic / Geo-political risk.
The situation in emerging markets is not getting any better and the DXY remains the biggest elephant in the room. In this context and based on recent price action, we still stand by our view that the weekly reversal in USDJPY in July may have rung the warning bell.
We will updated our latest Weekly Outlook when we are back but all in all, no big change.
Please note that any new subscriptions during this period will only be processed on Sunday 19th.
Wishing everyone all the best and see you back soon!
Shape Of My Heart
A slightly different post today…
I recently came across an interview Sting gave about the song ‘Shape of My Heart’ and guess what? Yes, it made me think of trading. It’s interesting that in all these years, the song was release in 1993, I had never made the connection…
Here is what Sting said about the song in a promotional interview:
“I wanted to write about a card player, a gambler who gambles not to win but to try and figure out something; to figure out some kind of mystical logic in luck, or chance; some kind of scientific, almost religious law. So this guy’s a philosopher, he’s not playing for respect and he’s not playing for money, he’s just trying to figure out the law – there has to be some logic to it. He’s a poker player so it’s not easy for him to express his emotions, in fact he doesn’t express anything, he has a mask, and it’s just one mask and it never changes.”
And here are some of the lyrics:
He deals the cards as a meditation
And those he plays never suspect
He doesn’t play for the money he wins
He don’t play for respectHe deals the cards to find the answer
The sacred geometry of chance
The hidden law of a probable outcome
The numbers lead a dance
ENJOY!
EOY Action
As we move into the last trading day before the start of the holiday season, our focus will be on how the weekly candles on the indices close today.
Everyday posts on the blog will resume in 2018 but the twitter feed will remain active. If possible, we’ll try to run some kind of open-access webinar over the holidays, so stay tuned for details here on the blog.
If you are looking to sign up for our Daily Webinar Group, please note that today is the last one for 2017. Daily sessions will resume on January 2nd and the recommendation would be to sign up before then as that is when we go through our year-end review and look at the bigger themes/swings for 2018.
Remember that trading condition can be very thin from hereon into 2018. Usually, you would not expect to see aggressive and sustained action but stranger things have happened…
Floored
Weekend Risk
“The greater the demands on me, the more I need to sustain my inner calm and stability.” – bkwsu.org
A lot of headline risk today and over the weekend. Draghi, May, North Korea, New Zealand & German Elections… as usual, we favor defensive positioning into the weekend. There is very little to add to what we have been discussing these past few weeks. We are just waiting to get all our ducks in a row.
Today is shaping up to be one of those days where you could see a lot of air-pockets across teh board as most participants are in ‘wait and see mode’ in a headline driven market. A lot of the charts are still inside FOMC ranges and it will be very hard to read too much into the moves unless we get decisive breaks and holds outside these ranges. More importnatly, for a bigger pictures point of view > no change to our outlook.
Remember that risk happens fast and that picking up pennies in front of a steamroller works until it doesn’t. In this current context / environment, there is absolutely no excuse to getting caught off-guard over the weekend.
CPI Focus
“Successful investing is anticipating the anticipations of others.” – John Maynard Keynes
Since we keep on getting questions about the daily webinar sessions and to mix it up a little, today’s note is slightly different. Pretty much all of the latest charts we have posted on the blog or on twitter and discussed in the weekly outlook video are still in play so we are just going to highlight some of the things we are going to be discussing in today’s session:
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EEM is on the run but USDJPY doesn’t seem to care just yet and we will probably not have a clearer picture unless we see a a break and hold outside of the 114.50/112.00 range. We still believe that we have some unresolved business at the 112.00 pivotal mark.
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Equities hovering at highs, waiting for CPI numbers as bonds sold off a bit and USD tries to stabilize around the November low. It’s going to be down to the number to see which way we go but we believe there will be a lot of positioning post release, probably more so on a numbers miss. Could be a very interesting opportunity to get in on the next rotations.
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A lot of wheeling and dealing on GBP pairs but where to get the biggest bang for your buck if you are trying to position for the next leg of the move? We suspect that it’s not on cable.
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Financials, Retail, Tech… is there a tell on a possible market top out there?
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What’s the deal with Silver and Gold and what other metals offer a far more interesting and less volatile asymmetric risk/reward profile.
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What’s going on with the commodity currencies and why is our ranking in terms of interesting trade location > Kiwi, Loonie and Aussie.
Wishing everyone a great day ahead and an every better weekend! TGIF 😉
Update CTA/HF Performance
Full Year 2016 from BarclayHedge:
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Barclay CTA Index: -0.90%
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Barclay Discretionary Traders Index: -0.83%
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Barclay Currency Traders Index: 1.74%
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Barclay Systematic Traders Index: -1.40%
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Barclay UCITS CTA Index Index: 6.80%
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Barclay UCITS Global Macro Index: -4.02%
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Barclay Hedge Fund Index: 6.15%
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Barclay Global Macro Index: 1.49%
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Barclay BTOP50 Index: -4.88%
2016 Thank You!
Talk about a year full of surprises… markets kept on forcing participants to stay focused, manage risk and continuously work on their game. The first thing that comes to mind is one of our favorite Jesse Livermore quotes:
“The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, nor for the get-rich-quick adventurer. They will die poor.”