Without a doubt the best opportunities present themselves during times of financial distress. During a bear market asset prices take to the downside as risk gets repriced and fear takes over. I would argue that the exact catalyst is not as particularly important as the archetype psychological response which it induces. Markets change, but the … Continue reading Putting on Risk in a Bear Market
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Market update: Dollar, Gold, 10Y, SPX and BTC
Dollar After breaking out through the Nov-April resistance of 97.70, the Dollar Currency Index (DXY) ticked to ~98.40 on two occasions and is currently selling down for a possible retest of prevailing support. Often we see resistance turned into support after a technical breakout, watching 97.50-97.70 to confirm the up-trend. As for the components of … Continue reading Market update: Dollar, Gold, 10Y, SPX and BTC
The (short-term) Business Cycle
The Business Cycle: Simplified Most everyone understands the business cycle; 7-10 year periods of economic expansion followed by recessionary contraction in GDP. A technical recession is two consecutive quarters of declining GDP, characterized typically by tightening credit and a flight from risk assets. Recessions are those 'features' within economic law which allow for the repricing of … Continue reading The (short-term) Business Cycle
Gold Declining Wedge
Watching $1312 to see if Gold is going to break through the declining wedge pattern below. Interestingly the DXY still looks as if its going to continue selling off through to $96. Buy into strength. Sell into weakness.
Short term play on GOLD
As the Dollar Currency Index approaches upper resistance in the $97.50 region, Gold looks attractive for a quick play. Everyone and their dog knows that Gold and the US Dollar (DXY) typically trade inversely, Dollar up > Gold down. Although this correlation has been breaking down in recent months; no doubt a weak Dollar provides … Continue reading Short term play on GOLD
Reflexivity
Last December I read The Alchemy of Finance by George Soros. Published in 1987 I'm no doubt late to this one... to my credit, in 1987 I was -10 years old. I have come to find his theories on Reflexivity to be eye opening and a well needed addition to the proverbial tool belt of … Continue reading Reflexivity
Dollar Euro Gold
The Dollar breaks out against Euro as ECB flips On Thursday the ECB flipped. After Powell lead the way in January it was about time for Mario to follow suit. After announcing a few dovish policy decisions and most notably that rates would remain unchanged until the end of 2019, the Euro sank to levels … Continue reading Dollar Euro Gold
The Week Ahead
On Friday the S&P500 closed within ~10 points of the previous week, marking little action as the index pressed up against the 2,800 resistance. Treasuries sold off slightly with the 10 Y hitting 2.759%. Treasury spread on the 5-30 hit its highest in more than a year at 58 basis points. Gold ended a bullish … Continue reading The Week Ahead
Sell the News?
After the "worst December since the Great Depression" equities have recovered from their extremely oversold levels. The S&P500 posted a ~ 8% gain during the month of January. Since December 24 SPX has rallied almost 20% from 2350 back to 2800, with only 11 of the last 40 sessions closing lower than they opened. 2800-2817 … Continue reading Sell the News?
The Powell Put in Action
The January 30th FOMC press conference was greatly anticipated by market participants, generally looking to see how dovish Powell could get in the light of uncertain financial conditions and signs of a global slowdown. This is a recap of last meeting: Language: Powell starts off his conference indicating that the "economy is in a good … Continue reading The Powell Put in Action
