ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
A week ago, the CFTC’s Commitments of Traders report revealed that speculators had ramped up net short contracts to highs unseen since at least 2008. These positions were accumulated ahead of announcements on monetary policy from the Bank of England and the U.S. Federal Reserve. Given the British pound soared through these events, I assumed … Read more
Just three weeks ago, speculators sent their bullishness on the Canadian dollar to a 4-year high. I followed along with the speculators and accumulated a short USD/CAD position. Two weeks passed before the payoff. It arrived in the form of an anti-dollar reaction to a rate hike from the U.S. Federal Reserve. Source: FreeStockCharts.com With … Read more
Now I understand better why and how the British pound (FXB) soared so much in the wake of the latest announcement on monetary policy from the Bank of England (BoE). Source: FreeStockCharts.com Going into last week’s monetary events, speculators increased their net short contract position to levels not seen since at least 2008. Source: Oanda’s … Read more
Last week I registered my surprise at silver speculators rushing to increase net long contracts to near multi-year highs. This move happened ahead of what was expected to be a parade of Fed-speak clearing the path for a March rate hike. The surge stood out even more given gold’s surge did not bring net long … Read more
The iShares Silver Trust (SLV) made a major peak last summer when it hit a 2-year high. The rally year-to-date seemed to come to an abrupt end when SLV plunged through support at its 200-day moving average (DMA) and its 20DMA uptrend. Source: FreeStockCharts.com However, don’t tell speculators any sad tales about silver. Speculators increased … Read more
Currency traders spent much of 2016 cycling through bullish and bearish periods on the Australian dollar (FXA) and the Canadian dollar (FXC), the Western world’s two biggest commodity currencies. In particular, bullishness on both currencies waned rapidly going into the U.S. Federal Reserve’s rate hike in December. Speculators adjusted positions to net flat and then … Read more
“Uncertainty about the global outlook is undiminished, particularly with respect to policies in the United States.” – Bank of Canada press release, “Bank of Canada maintains overnight rate target at 1/2 per cent”, January 18, 2017 I start with this quote from the Bank of Canada because it stands in stark contrast to global financial … Read more
The UK’s FTSE 100 remains a big post-Brexit winner. This headline from the Telegraph for January 10, 2017 says it all: “FTSE 100 records longest run of closing highs since 1984 as Brexit fears hurt pound.” The FTSE 100 was created in 1984. Never since that time has the index notched nine straight all-time highs … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on December 27, 2016. Click here to read the entire piece.) The SPDR Gold Shares (GLD) has increased 6.3% since December 15, 2015. The U.S. Federal Reserve hiked its interest rate the next day and made its second hike for this cycle … Read more
A full seven months ago I speculated that “maximum yen bullishness” was reaching feverish levels. As a result, I concluded that a bottom had to be imminent in USD/JPY even as the momentum at that time seemed to point to that bottom happening around 7% lower at 100. I acknowledged the potential for making an … Read more