27 Apr – 1 May 2020 Trading week preparation

The content is now separated between markets/folders I track. It´s easier for me and I hope it´s easier clear for you too.
https://eod-notes.com/shared-content/

From last week:
I been trading less and risking less.
I closed my position on $GOLD (Barrick Gold) for + ~36% the last Thursdays candle looked toppy. I will look to go back in on a pullback.
I also closed my USDCAD short, when price failed to close above 1.42489 it was my hint. USDCAD will go higher but profits are profits. I am looking to take another long on a new retest of 1.40062.

Positions on $AG, $XAUUSD (longs) are still open.
I have been using a lot of time refactoring and creating new frameworks for my algos. Despite not being trading much, I am using this time to learn new strategies, code, backtest and study macro.
Maybe next week I will have more free content to share.

My macro opinions for long term:

  1. We are heading lower, much lower on stocks.
    This is being hard to digest, market rumors and the Fed are pumping this market up. I stand by my opinion, patience is a virtue.
  2. US bond yields are going to zero.
    Yup, not much to say about this
  3. Gold and silver will go a little bit lower before acting as safe heavens.
    This is a curve ball, Gold is pumping, JPY is setting up nicely for a pump too but Silver and CHF and looking really weak.
  4. Commodities will behave like gold, specially grains.
    CRB Index reached a new ATH low
CRB Commodity Index

Next Week:
Another action packed week of earnings

Earnings Week 27 April 2020

So far earnings have been very disappointing.

Earnings beating consensus – https://themarketear.com/posts/c84QLsijZo

I will be looking into MSFT, APPL, V, FB ,BA, LUV and AMD.
Two special notes for this week:
1- Airlines, earnings should be very, very bad. They will probably be subject to government bailouts. For the long term this downside should be excellent buying opportunities.
2- Oil companies. Mnuchin already said that the US is looking into taking a stake on oil companies as a bailout mechanism. XLE biggest companies as % are XOM and CVX. When this pumps be ready and don´t miss the boat.
As oil is being bailed out, XLF and banks will ride that wave too because they are the most exposed to debt (HYG and JNK), be aware to surf that wave too.

CRUDE
I wouldn’t touch crude directly with a two foot pole, the volatility and uncertainty will eat your trade alive.
It´s rumored that new OPEC + talks will happen and Trump is committed to stop the oil bleeding too.
Crude spreads are going nuts, and Brent shines as more stable than WTI.
If you want to play long/short crude be aware of volatility or use correlated assets with lower volatility.

TANOS WTI

GOLD
Not much to say, I still believe in a short term pullback but long term I am very bullish. Some people are seeing a IH&S being formed, but without a breakout my bias maintains.

Daily XAUUSD chart

SP500
Probably this earnings week will decide the fate of SP500.
It´s been trading in a range and the technical setup supports a bearish bias.
Some of the index constituents are starting to turn red. SPY outflows YTD continue.

SP500 Daily chart
TANOS SPX
SPY Outflows

YEN/ CAD
Yen is position to pump hard, on the monthly chart is already squeezing a screaming buy. On the other hand, CAD looks ready to die. Great way to play this is CADJPY.

Monthly YEN
Monthly CAD

Another Notes
Insiders are not buying the fed printer trigger, and buybacks are at the lows. If execs are reaching for life boats, they should know what´s what.

Insiders transactions
Insiders selling by index

Sentiment is mixed, confusion reigns in the market

TANOS Sentiment

Safe Havens are also mixed

TANOS Safe Havens

Articles:
WSJ Article on crude storage
Visual Capitalist info chart about dividend investing on volatile markets

Events:
Monday
EUR – German Retail Sales m/m

Tuesday
JPY – Unemployment rate / Core CPI
USD – Consumer Confidence / Richmond Man. Index

Wednesday
USD – Advaned GDP / FOMC
AUD – CPI

Thursday
JPY – Retail sales / Consumer Confidence
CNY – MAN. PMI / NON MAN. PMI
CHF – KOF Economic Sentiment
EUR – German Unemployment / CPI / Core CPI / EUR Unemployment Rate
USD – Unemployment Claims / Chicago PMI

Friday
JPY – Man. PMI
CHF – Man. PMI
GBP – Man. PMI
CAD – Man. PMI
USD – Man. PMI
EUR – Bank Holiday




19 – 24 Apr 2020 Trading week preparation

The content is now separated between markets/folders I track. It´s easier for me and I hope it´s easier clear for you too.
https://eod-notes.com/shared-content/

From last week:
Last week I only took a trade. Short USDCAD.
Here is my thesis. USDCAD correlates negatively with WTI. I am bearish crude but I will explain why on the Crude section.

Correlations between USDCAD and WTI

CAD technically and fundamentally looks very weak. Canada´s economy is falling into shambles and the CAD relies on crude prices to be stable.

CAD Currency Weekly chart

It was a crazy week overall, sadly the corona virus situation isn’t improving.
Markets are still rallying acting as everything is fine. This is insane.

My macro opinions for long term:

  1. We are heading lower, much lower on stocks.
    This week bulls swing for the fences, the SP500 rallying but is inside a rising wedge, maybe a retest of ~2900 is possible because Its the YTD mean reversion.
    Still believe we are heading much lower.
  2. US bond yields are going to zero.
    Shorter terms are already negative.
US Gov Bond Yields

3. Gold and silver will go a little bit lower before acting as safe heavens.
Gold corrected lower last Friday. News on stability and GILD treatment relived market sentiment. When everything stabilizes for good, old will correct much lower.
4. Commodities will behave like gold, specially grains.
Grains started to suffer, corn is already reaching 52W low price per bushel.

Next Week:
I don´t believe It´s time to go long.I am mostly in cash with four trades open, long gold, long $GOLD(Barrick Gold), long $AG and short USDCAD.
At the same time, I don’t believe It´s time to short the market, SP500 is showing a lot of power. We need to have a reversal event in order to trigger shorts.
I will keep watching the FX market for plays. Special note to grains and natgas, Corn is almost at a 52W low price per bushel, It might be worth a shot. Natgas ripped but is still inside a falling wedge, pay attention to a possible breakout.

Earnings season is steaming up ahead. Online companies will do good, home delivery services will do OK, everything else will do poorly. If you play earnings, be safe out there. It´s going to be a roller coaster.

Earnings week 19 April 2020

CRUDE
Oil markets are absolutely insane. Futures curve are in a super contango.

Oil futures contango – https://themarketear.com/

This is not enough to drive oil prices up. The supply is much bigger than the demand and while this doesn’t change, the price should go down. Even with massive OPEC+ cuts and Trump saying he will pay producers to not produce, the oil prices are driven by supply / demand laws.
Last Friday crude closed below the trend line and below support,It looks bad.

Oanda CFD WTI weekly chart
TANOS Market Gauge Crude

This is not all bad, in shore storage is reaching it´s capacity limit, so off shore storage is being contracted. BDI index is starting to turn positive and some tanker stocks are printing big green candles. I am not playing this, I arrived late to the party. If a new pullback happens I will look into it.

Baltic Dry Index

GOLD
Long term, I am very bullish gold, that´s why I am long from the base ~13xx level. This being said, Short term I believe gold prices will catch up with reality once the supply chain issues are resolved.

Gold monthly chart

The orange box on this chart is the level I am looking into adding to my gold bags.

Gold Daily chart
TANOS Market Gauge – Gold

SP500
Still inside a rising wedge. A new leg up to test the YTD mean reversion at ~2900 is still possible before rolling over. There´s the space and momentum for a last push higher.

Oanda SP500 Daily chart
Oanda SP500 Cloud chart
TANOS Market Gauge SP500

Another Notes
Insiders are not buying the fed printer trigger, and buybacks are at the lows.

Insiders transactions
https://themarketear.com/
https://themarketear.com/

Sentiment is still mostly bearish but the market keeps rallying, some people call it a bear market rally, others are saying the bottom is in. Pick a side.

TANOS Market Gauge Sentiment

Nasdaq is being the top performer, Tech is ripping on this bounce. When and If a sell off happens this stocks may provide great buying opportunities.

TANOS Market Gauge NASDAQ Perfs

Events:
Monday
EUR – German PPI
CAD – Wholesales m/m

Tuesday
GBP – Avg. Earnings Index / Unemployment rate
EUR – German ZEW Economic Sentiment / ZEW Economic Sentiment
CAD – Core retail sales / Retail sales
USD – Existing home sales

Wednesday
GBP – CPI / CORE CPI / PPI
CAD – CPI
CNY – CB Leading Index
EUR – Consumer Confidence

Thursday
AUD – Flash PMIs
JPY – Flash Man. PMI
EUR – Flash PMIs / German GFK Consumer Sentiment
GBP – Flash PMIs
USD – Flash PMIs / Unemployment claims

Friday
GBP – GFK Consumer Confidence / Retail Sales
EUR – German IFO
USD – Durable Goods / UoM Consumer Sentiment




13 – 17 Apr 2020 Trading week preparation

The content is now separated between markets/folders I track. It´s easier for me and I hope it´s easier clear for you too.
https://www.dropbox.com/sh/42emkdzpvw867i0/AAAHA9ljhEBgHkX63xNnWtesa?dl=0

From last week:
What a crappy week.
I had to cut my short on AUDJPY for a small profit.
My risk management parameters made me cut it. Rules are there for protecting you from yourself. My instincts and opinion may be correct about AUDJPY but the market is telling me I am wrong.
Trade with rules and a plan.
My decision to trade less and watch the markets It´s working out for me, I am being able to learn and understand the market swings and news.
Trading in this environment feels more like gambling.


My macro opinions for long term:

  1. We are heading lower, much lower on stocks.
    Despite this huge pump, I don’t believe we saw the bottom. Economic numbers are horrible and earnings season is starting. When those big airlines report, it may bring everything down.
  2. US bond yields are going to zero.
    It´s happening, Powell went on full “brrrrrrrr” the FED printer is working 24/7.
  3. Gold and silver will go a little bit lower before acting as safe heavens.
    Huge rally this week. I maintain my opinion. When this supply chain disruption ends. Gold will correct lower, providing a good buying opportunity . I already have gold on my portfolio, a test to the 1500 level is a buying opportunity for long term
  4. Commodities will behave like gold, specially grains.
    Not doing much as everything is on freeze. Corn is approaching some lows.
    Copper rebounded and oil is in a no mans land.

Next Week:
It´s going to be another crazy week.
I will keep my plan, I will trade small positions or not trading at all. I will use my time to study market movements and improve my systems.
That being said, this is what is catching my attention.
Earnings season is starting:

April 13 earnings week

FED balance sheet is full steaming head, Powell is printing 24×7. This looks like a crypto chart

FED Balance Sheet

CRUDE
OPEC+ decided to cut production, 9.7M bd per day let´s see how futures open. Demand is driving the price. Crude is in a no mans land and I think this wont do much for price while demand remains this low.

WTI Daily

GOLD
Went full on rocket man. FED printing press and supply chain disturbances in the gold physical delivery market are pumping the price higher. When the dust settles, a correction will happen, fast and furious.

Gold Daily

SP500
Last week the TTM triggered a long signal on the daily chart. A retest on the ytd mean reversion of ~2900 is possible. It also broke out the rising wedge, invalidating the pattern.

SP500 Daily

Another Notes
Insiders started selling the pump.

Insiders transactions chart

Sentiment is in a what I call weird mood. Bearish on the economy, bullish on the FED printer.

Market Sentiment

Safe Havens are going up, such is the market. Correlations don’t matter.

Safe Havens


St. Louis FED Financial Stress Index, well that spike sure does means something.

St. Louis FED Financial Stress Index

Events:
Monday

Tuesday
CNY – Foreign direct inevstiment ytd/y / USD denominated trade balance

Wednesday
AUD – Westpac consumer sentiment
USD – Core Retail Sales / Retail Sales / Empire state manufacturing Index / Industrial production / NAHB Housing Market Index
CAD – Rates decision

Thursday
AUD – Employment
EUR – German WPI / CPI / Industrial Production
USD – Unemployment claims / Philly Fed man. Index / Building Permits

Friday
CNY – Industrial Production / Retail Sales / Unemployment Claims
JPY -Tertiary Industry Activity
EUR – CPI / CORE CPI
USD – CB Leading Index



6 – 10 Apr 2020 Trading week preparation

The content is now separated between markets/folders I track. It´s easier for me and I hope it´s easier clear for you too.
https://eod-notes.com/shared-content/

From last week:
I feel I am repeating myself. Another hell of a week. Markets went up and down with mad swings.
For me It´s being very hard and challenging keeping it up with all this news and activity. So I decided to mainly focus on SP500, FX, Gold and crude. No stocks at all.
The AUDJPY trade is going well, short since 66.508 it´s in profit for ~163 pips. I will keep it open, I think it will go lower.
In midst of all this, I have been reducing the amount of trade I do per week, I am adapting my trades in a way I can be more “comfortable” with them.

My macro opinions for long term:

  1. We are heading lower, much lower on stocks.
    It´s still a long way to bottom
  2. US bond yields are going to zero.
    Short term US bonds are already negative and going into more negative territory
  3. Gold and silver will go a little bit lower before acting as safe heavens.
    Gold had a nice rally but I think it will go down before going much higher (I do own gold)
  4. Commodities will behave like gold, specially grains.
    Commodities battle and swing according dollar prices, if the dollar is strong commodities prices go down and vice versa. DXY is looking strong

Next Week:
AUD
I could throw a bunch of ideas of shorts but it would not be any different from your own analysis. I try to do this to share a different perspective on the market.
That being said, my “main” play at the moment is short AUDJPY. Things do look dire for the AUD and versus the Yen seems to be the best way to play it.
Yen looks very strong, it´s a safe haven and due to AUDJPY correlation with the SP500 It validates the price prediction.

AUD Weekly chart
JPY Weekly chart

CRUDE
This is a though one, I really like to trade WTI, It´s one of the main things I usually trade but this is starting to be insane. On last Thursday Trump tweeted that Saudis and Russians were talking and the WTI jumped almost 25% spot.
Common sense says to me that WTI is a no trade asset for the moment.
I do belive WTI will head lower before starting to gain up momentum.
Nonetheless here is my chart.

WTI Weekly chart

This will complicate things for crude prices.

CAD
This is a weird one. It looks ready to fall in oblivion.
It´s high correlation to crude prices makes it one asset to be watching.
Ways to play will be CADJPY/ USDCAD / EURCAD
A close below the yellow box will be a trigger for a short

CAD Weekly chart

GOLD
It is forming a massive cup and handle. Long term I am very bullish on gold, short term I am aware that the downside is more plausible. Maybe a retest of the 1500 lvl or lower.

Gold Weekly chart

SP500
Things are bad, market is bouncing but I feel it´s a dead cat bounce. There are still a lot of dip buyers but people are starting to see the bigger picture. Economic data is deteriorating by the day and this corona virus pandemic is affecting business throughout the world.
I still see SP500 reaching ~2000.

SP500 Weekly Chart

Another Notes
If on mid march, insiders were buying like crazy, last week, insiders were selling a ton.

http://www.openinsider.com/charts

SPY is still seeing a lot of inflows, month-to-month inflows are still positive.

Track Insight SPY Flows

I am taking this time to read and learn new things. I would like to share a few links:
Blogs:
https://advisor.visualcapitalist.com/black-swan-events/
https://e-markets.nordea.com/#!/article/56742/global-once-we-are-out-of-this-mess-the-usd-could-be-hammered

Podcasts:
Macro voices 213 Josh Crumb: Deciphering the Gold market
https://bit.ly/2V02hxM
hmmminars from Grant Williams
https://ttmygh.com/hmmminars/

Events:
Monday
EUR – German factory orders m_m /Sentix Investor confidence
GBP – Construction PMI
OPEC Meetings

Tuesday
AUD – Rates Decision
JPY – CB leading Index
EUR – German Industrial Production m_m
CAD – IVEY PMI
USD – Jolts Jobs Openings

Wednesday
JPY – Core machinery orders m_m / Economic Watchers Sentiment
CHF – Unemployment rate
USD – FOMC

Thursday
JPY – Consumer Confidence / Prelim Machinery orders m_m
GBP – GDP /Industrial production / Manufacturing Production / Index of Services
CAD – Jobs Data
USD – Unemployment claims / Core PPI / PPI /Prelim UoM consumer sentiment

Friday (Bank Holiday)
JPY PPI
CNY – CPI / PPI/ New loans
USD – CPI / Core CPI