dollar bear trade attempted to roll over, but the changes witnessed Friday, show possible continuation of the trade, till close to March FOMC meeting. - gold needs to stay above the magical 1220 pivot.. - us credit instruments started rolling over first, but have to see if its just a minor retrace on a another leg up, correlated with gold. - yen looks to rally, more correlated with the above, secondary to change to dovish FOMC, political speak about favoring a weaker dollar. - pound is floating non correlated, moving with Brexit politics. - Chicago Wheat looks to want to break above the resistance, coming week will give more indication. - monitored account peaked at 8.8K pnl past week, closed Friday in the 4's.. so shows a significant retrace of gains made on the dollar bear trade. Pnl should move back over 8.8 if the long term trend is valid. - copper looks to be making a flag pattern higher.. talk of fiscal infrastructure build out should move it higher. - key metrics to watch for.. gold to stay above 1220.. would favor another leg up in credit. If gold can't stay above 1220, credit will continue to roll down, with yields heading higher. And dollar rally to resume. This could happen if FED officials do their routine market 'speak'..
The 64 Billion Dollar Question becomes, for the next 4-8 years will this theme continue...dollar bear trade. -long gold 30 year yen copper british pound 2 year 10 year Chicago wheat euro
snapshot almost as if the dollar rally is a major yearly stop run...long everything to the dollar is the trade to be in. Or possible divergence between credit and gold/dollar.
http://www.mrci.com/special/correl.php correlations chart, good to look at if you want to balance out the basket against unidirectional swings in pnl. notice the correlations between, dollar, gold, credit, currencies... copper has a -91 correlation to credit (TY), so most days if the dollar is getting hit, credit is going up, gold is going up, and copper is going down. Since I'm long everything in the basket, if dollar gets hit, I should see losses in copper, and if dollar is rallying I should see gains in copper. Wheat has minimal correlations to financials, and its a isolated trade. British pound has had a 86% correlation to wheat.
There is a 5k profit target for each contract unless specified, 2 year has 250, 10 year has 2K, euro has 1000, Chicago wheat has 2500. Margins for IB, 9 contract basket is 38.7K initial, maintenance is 30.9K. So to control the specific 9 futures contracts about 40K is needed. But realistically capitalized at 112.5K, for the basket. Pnl has been fluctuating between 8.8 to 4.4K.. or between 7.8% to 3.9% on capital. If every profit target is hit, and I exit out each contract for the year, the most that can be made is 27.3% on the basket.