I wanted to start this journal to keep track of ideas, and trades. I trade mainly through a macro perspective. I look at pretty much all the markets. 1) Credit 2) Equities 3) Bonds 4) Foreign Exchange A few days into 2007, seems more like people booking profits from last year. The main theme currently running through is that the markets seem to be readjusting themselves, to a possible delay in easing of Monetary Policy in the USA. BOJ(Bank of Japan) is expected to raise rates this month. The Yen crosses GBP.JPY EUR.JPY USD.JPY succumbed to profit taking off their highs. Last few days they retraced, with a underlying dollar bullish theme. The bond market seems, to be sliding a little, secondary to strong data that came out. NFP lows, blowing through that low, will paint a bearish picture for bonds. ECB interest rate statement will come out 7:00 am EST USA tommorrow. Oil continues its slide, breaking through 60-55 barrier. Russian equities getting slammed secondary lower oil revenue. Industrial Metals upticking, secondary readjustment of market expectations/profit taking. Equities, still range bound, the market hasn't been overtly bullish in its price action. Its been a slow methodical rise with extremely low volatility. With democrats taking over, its in their interest to run the stock market into the ground to lock in the Presidency. Any stock market loss will be blamed on the President. Thus as the year progresses, investigations launched into Oil Companies activities, Pharmaceutical Sector or other market related positions is the risk. Ultimately though, the price action is the most important thing in any market. No matter what the rationale is behind the trade. Chris
1) Bond bear position 2) Dollar long position TY short @ 107.01 GBP short @ 1.9702 USDJPY long @ 121.30
usually weeks, but macro views are similar to trendlines, and they can change based on a batch of economic reports. Sometimes the picture is clearer, with the markets reacting the way the scenarios project them out to react. A major change in trend just occurred start of the year. The idea that the federal reserve might hold off on cutting interest rates, secondary to data that paints the economy with a resilient picture. The bond market backed up in yields. The stock market became range bound. Oil market reacting to supply glut. Gold market holding its own, and ready to make a push up. Industrial metals market, showing signs of bottoming out or consolidation. Forex market with dollar sentiment to be neutral. Main theme in forex seems to be Yen weakness. Rather then dollar strength. GBP momentum with a upward bias in comparison to most other pairs. Euro held back, secondary to ECB dovishness. Grains market with bullish sentiment. There doesnt seem to be significant road bumps to the economy. The housing market was the achilles, but global liquidity is supporting this market to some degree. World markets in general are at the extremes.
Pivotal moment approaching next week. The equity slide is giving indications for gaining momentum, but early bears will be squeezed around the FED meeting, recent highs will be tested, then a slide should occur. The first quarter will be a range bound equity market, with recent highs being top of the range. The bottom made on Friday wont be tested till post FED meeting. The range bound equity market should support the bond market. Since nonfarm payrolls will be out the same week. Lots of volatility for traders. The nikkei is still shy of its high even though it breached it, still under 17500. More gains in USDJPY wont be made till Nikkei sustains itself above this level. The BOJ have another opportunity to act this month. Last meeting had a lot of dissention. Dollar should come under pressure again. With a range bound bond market. GBP 1.9265 should be nice risk.reward point. Friday will be a nice day to book profits on holdings. Reverse position in bonds. And wait for better levels to reverse in dollar.
upside stops tested. Is everyone long? does nonfarm payrolls make any difference? bond yields backing down, low inflation, high growth, goldilocks. Petro dollar revenue being funneled into bonds. Keeping rates low, and keep housing blow soft from ARMS being reset at a lower rate then they would be. Equities asset inflation, global liquidity, creating another manic time period in equities. gold breaking upwards, industrial metals consolidating. Trendfollowers, being rewarded. People will book profits tomm. Watch for a reversal. Then the true nature of what the FOMC is saying will shine down upon the market. That they may raise rates again. Bonds will test the highs before the next FOMC meeting, and retrace and await a interest rate hike. Means equities will try to dip in the next few days, but will blow to the upside in the weeks ahead and follow similar pattern to bonds. Equities face selling pressure before the next FOMC meeting. The dollar will rally also before the next FOMC meeting. The FOMC signaled that interest rate hikes arent over.
Nikkei cant seem to stay above 17500, I'm expecting US equity indicies to turn bearish this week. Bonds bullish. Spoos @ 1451.75 night session.