$NQ_F short vs $ES_F long spread may begin working again. First sign of consolidation in a long time.
Natural gas made a stunning rally to an all-time high, only to come crashing back down again. It's been a while since we last covered natural gas, so let's take a look at what's happened since then. The previous technical & seasonality setup played out perfectly with the RSI bouncing off the low and the rally into the winter season, hitting our profit...
Live cattle recently hit an all-time high, leaving us wondering if the rally has gone too far. The front month contract reached 177 on April 13, surpassing the previous record set in November 2014. Meanwhile, lean hogs have been trading lower since last year. One way to assess this trend is to look at the spread between the two livestock markets. Both the...
Gold glows as risk blows. Multiple bank failures and shotgun bank marriages are bringing back scary memories of 2008. Amid gloom, demand for gold blooms. Gold is a resilient store of wealth, offers durable portfolio diversification, exhibits lower volatility relative to equities, and serves as an inflation hedge. As described in our last paper , among the six...
Fighting innovation is a fool’s errand. Getting entangled in hype is no less. Generative AI is drawing attention. ChatGPT skyrocketed in popularity since launch last November. With its intuitive responses, it has become the fastest-growing app in history reaching one million users in five days and 100 million in two months. In contrast, Google took 12 months and...
After observing how much price could be different between exchanges especially during times of high volatility and emotion, I wondered whether I could reliably aggreggate and display concisely this information to improve my trading without having to frenetically check a dozen tickers of the same symbol across a dozen different exchanges, as most traders do, myself...
When central banks raise rates, financial sector outperforms. That is until credit crumbles by which time all bets are off. As federal funds rates spike and stay elevated for longer, lending rates will climb higher relative to deposit rates. Net Interest Margin ("NIM") which is the difference between lending and borrowing rates continues to favour financial...
Not buying into the bullish past few days & believe SPY will go back down towards 400-402 by this Wednesday 03/08, which will coincide with the next Fed FOMC discussion points. Unsure about the move from here. Opened a Call Credit Spread today (3/6) at 405/406 (expiration 3/7) and at 405/409 (expiration 3/10).
Soybean short swing trade: The Bollinger Bands width has narrowed to 2.56% of price which is a level not seen in over a year. A new 6-month or greater low in bandwidth indicates that a volatility squeeze breakout is likely upon us. Similar volatility squeeze situations exist in wheat and corn but they both broke to the downside significantly last week. Wheat...
After Equity Option expiry today and into Month end, the technical rally induced by January effect could be fading. Commodities recent spike (on China reopening/inflationary) will certainly have an knock on seasonal effect in next Inflation data, Technically speaking BTP/Bund spread has done a double bottom, and we could expect a bounce from here (Italy widening...
With price and “commodity premiums” that we track showing signs of a structural shift, we think these represents potential tradeable set-up in the mid to long term as supply and demand finds some way to normalization after the pandemic & war shocks over the past 2 years. Hence, we think commodities will continue to be where the actions at. With winter just about...
Jumping straight into the technicals, we see a head and shoulder pattern on the daily Soybean Oil chart. With the neckline now broken, it seems a bearish set-up might be possible. While the technicals are important, understanding where the current price level of soybean oil is in context to other products could help us build further conviction on this idea....
The soybean crush spread calculates how much profit a soybean processing plant can generate by crushing a bushel of soybeans into soybean meal and oil. The profit margin is that profit number divided by the revenue which is the price of the meal and oil outputs. I prefer to look at profit margin as opposed to just profit as it adjusts for large market...
CME_MINI:NQH2023 - PR High: 12761.50 - PR Low: 12655.25 - NZ Spread: 238.25 Evening Stats (As of 1:25 AM) - Weekend Gap: N/A - 2/3 Session Gap: +0.61% (closed) - 8/19 Session Gap: -0.04% (open > 13237) - Session Open ATR: 290.60 - Volume: 39K - Open Int: 276K - Trend Grade: Bear - From ATH: -24.5% (Rounded) Key Levels (Rounded - Think of these as ranges) -...
Long Japan; Short US. Market conditions exist for Nikkei-225 index (“Nikkei”) to remain resilient over the next quarter relative to S&P 500 (“S&P”). BoJ's unflinching commitment to negative rates benefits Japanese firms with a weak Yen. Meanwhile, worsening economic conditions in the US with feeble growth outlook and likely recession could send S&P lower....
Famous American Author Alfred Paul Ries once said, “Good things happen when you narrow your focus”. Global macro conditions and monetary environment could make that quote apt for US equity market investing too. Given the backdrop of price behavior, this case study argues that a spread trade comprising of Long Dow Jones Index and short S&P 500 index provides a...
hello does anyone find me please an historical returns of a butterfly spread as follow - long 1 2 years bond short 2 5 years bond long 1 10 years bond. Does that make sense ? It is a combination of 3 legs , using 3 instruments. I am looking for some history and historical returns . Thnak you
Crypto winter is here. Is this the darkest before dawn? Or the start of a long artic winter ahead? In such nebulous times, directional bets are rife with risks. In contrast, spread trades vastly lowers risk while enabling limited but durable returns. Set against the current macro backdrop and landscape shift in the industry, this case study will argue that...