5/31: Still range bound. Would be nice to see a move back below 163.71. Unconcerned until above 164.39.
I'm skeptical of commodities holding up at these levels with renewed dollar strength, especially oil. CAD has strengthened considerably and looks due for a pull back (higher). I'm targeting the 61.8% retracement of the recent rally (lower) at 1.3790 by JUL expiry. Options markets are only pricing in an expected move up to 1.3367 by JUL expiry. This coincides with...
We're seeing an explosion higher in BTC led by Chinese buyers to the tune of 30X BTCCNY:BTCUSD volume with a massive arb spread of $72 (15%), highest since Feb '14. The arb spread blowing out leads me to speculate that fears of the PBOC loosening up their grip on a "managed devaluation" are spreading. Thank goodness I'm long USD!
Dollar strength, Fed hawkish, probability of FFR hike increasing, short TLT breakdown to 124
Dollar is looking like it's ready to explode higher after Yellen commentary doesn't oppose recent hawkish Fedspeak.
5/25: Gold's fundamentals and technicals look weak. Fundamentals: Rate rise fears, renewed USD strength, $ES_F strength paints optimistic US econ picture and positioning data is awfully one-sided. Technicals: Broke down below two key support levels, Ichimoku cloud, ascending bullish trendline support and it looks ripe for a test of the 100 day at 1214. Expect...
Bunds, as proxy for rate fears, are contained b/w 164 and 162. Waiting for trendline breaks. Otherwise, nothing to see here.
Gold has finally shown some sustained weakness after markets realized the remarkably, fantastically obvious underpricing of June FFR hike risk - up 30% from 4%,only two days ago! Money Managers have never been longer the yellow metal - on both an absolute and net basis, so there's quite a bit of volume that should be flowing through sell orders today and tomorrow....
I like the asymmetrical risk in shorting spooz here at support around 2033 on down to the next support level at 2013. Keep your eyes open for a possible bounce at 2019. WARNING: Keep your stop VERY tight! We've seen two strong bounces higher off of this support zone at 2033ish.
KBH is giving up all of today's "better" than expected housing data. The trends are still not looking good. I would continue to short KBH here below support at 12.70ish down to 12.00
NFP came in weak, as expected. On the release, $GC1! spiked, $DX1! dove and $ES1! tanked. Again, all par for expectations. That said, no sooner than 6 minutes after the release, $DX1! was already trading higher than pre-NFP. Could that be a signal of capitulation on the bearish dollar trade? Yes, that's a gutsy call and yes, I'm a bias - I'm short $GC1! and long...
Are we finally seeing the beginning of some divergence between gold and US equities? I expect this to be bearish for Gold.
Aside from my dollar-bull thesis that the correct post-Mar FOMC balk trade was to expect ensuing fear of the Fed being behind-the-ball and to short gold, gold's technicals also look like the rally is tapped out. The red and green signal lines represent the maximum (over the prior 200 days) spread (green: negative deviation, red: positive deviation) between spot...
I entered APR 75 $D calls as a hedge to my $XAUUSD short and a "Dour Janet," ahead of the FOMC chair's speech last Tuesday. Full trade set-up here: www.basementmacro.com The trade worked fantastically with the options returning 175%, as of Friday's close. I opted not to close the position because (1) the trade was working (2) I completely missed the sell signal...
Pandora is a sufficiently volatile name with typically decent short interest (16%, as of 2/29/16), so when a rumor crossed the wires at 9:36am that it "may be exploring a sale" I bought some APR 10 Calls pretty much sight-unseen. The stock was only up 2%, but the ATM bid/ask spreads were raging! Since then, the rumor has been given "credence," and the stock has...
Since the FOMC meeting last week, shorting Gold has been a war of attrition. As I previously opined, the snap higher in Gold immediately following the uber dovish minutes and non-sensical presser was a snap re-pricing. That doesn't mean that sentiment shifted, just that prices received a new input/wake-up call. The USD will regain strength off the back of...
I was alerted to some unusual activity in VIPS APR 13 Calls on Friday afternoon and bought sight-unseen due to the Chinese exposure, volume and time-to-expiry. Since then, the stock is up 9% and the calls have returned 106%. Chinese officials are doubling, well tripling down on debt - from easing loan-loss provisions for banks to increasing margin lending debt. I...