ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The market must be expecting an imminent rebound in the price of iron ore. Almost two weeks ago, I proposed a pairs trade going short Rio Tinto (RIO) versus long BHP Billiton Limited (BHP) as a way to play the top in the price of iron ore predicted by the Reserve Bank of Australia (RBA). … Read more
AT40 = 68.2% of stocks are trading above their respective 40-day moving averages (DMAs) (high of 69.4%) AT200 = 57.2% of stocks are trading above their respective 200DMAs VIX = 10.2 Short-term Trading Call: cautiously bullish Commentary In my last Above the 40 post, I noted how the stock market bent but stubbornly refused to … Read more
In one fell swoop, the Bank of England’s (BoE) hawkish posturing flushed shorts out of the British pound (FXB). The net short position of speculators has not been this low ever since the latest wave of currency bearishness began against the British pound. Source: Oanda’s CFTC’s Commitments of Traders This rapid closure of shorts helps … Read more
On September 19th, the Reserve Bank of Australia (RBA) released the minutes from its last meeting on monetary policy (September 5, 2017). Iron ore was perhaps the biggest headline coming out of those minutes. Surprisingly, the RBA called a top in the price of iron ore (emphasis mine): “Iron ore prices had been supported at … Read more
There is nothing like a significantly stronger currency to get central banks to take pause. I cannot recall in recent memory a time where a little known (or under-appreciated?) Deputy Director of the Bank of Canada made a notable impact on the Canadian dollar. Such an event occurred on Monday, September 18th. Deputy Director Timothy … Read more