Pounded: British Pound Plunges, Stocks Soar As Bank Of England Comes To Rescue
This is yet another one of those days where everything can pretty much be explained in one chart. Here it is: Bank of England governor Mark Carney gave his second speech since the Brexit vote on Thursday and all but assured the market that more BoE easing is in the cards. “The economic outlook has…
This is a Hallmark of Volatility
TheoTraders, today's move was a hallmark sign of volatility. The question is - when do you get short again? And that's why we get these explosive moves to the upside. Traders try to short these up moves all the way up. Remember, it's all about duration over direction. Here's how to handle the volatility...
Are You For Real? Enjoy The Rally, But Remain Incredulous
First thing’s first. Here’s the only chart you need to make sense of the two-day risk-on move (i.e. the rally): You’ll likely see several versions of that throughout the rest of the day assuming equities hang on to outsized gains. Basically, Treasurys aren’t buying what stocks err … aren’t selling. Ok, that’s a confused attempt…
A Look At Active Manager Positioning And A Chinese Intervention
On Tuesday, we took a look at what works as a hedge during equity drawdowns. Last week, we took stock (no pun intended) of which companies and sectors were most exposed to Brexit and also to a rising dollar. No sooner had we finished analyzing where to turn in turbulent times than risk went crazy.…
Volatility Continues as Trouble Overseas Grow
The markets have some strong headwinds to overcome. From a fundamental perspective multinational companies have a lot of currency risk at stake. From a geopolitical point of view "global Order" has been rocked as the movement towards nationalism and away from globalism continue to gain steam. And tonight we look at the markets breaking down…
Bulls Make Money, Bears Make Money, (Un)Hedged Hogs Get Slaughtered
We’ve talked quite a bit about what companies and sectors are most vulnerable to Brexit and a rising dollar (see here and here). Let’s look, for a moment, at asset classes and equity drawdowns. Over the past several days, the need to hedge against long tail events has become readily apparent. Unfortunately, hedging against macro…
Markets Rally - Out Of The Woods Already?
And now, back to our regularly scheduled programming. Well, not entirely, but US traders woke up Tuesday to green screens, a welcome reprieve from two days of mayhem. “Brexit” discussions still dominate the airwaves and headlines, but you can count on the dip buyers and knife catchers for what may or may not be a…
The do's and don'ts of Trading Volatility
TheoTraders be aware of what to do and what not to do in volatility. Whether you're looking to sell the rally or buy the dip here are some ideas for you. The risk continues to be to the downside. That doesn't mean jump in and buy puts. There will be time for trade. It's very…
A Fox, A Dog, And An AAA Rating Lost
Just to be clear, there was probably never a particularly “good” time for the UK to vote to leave the EU. Any way you slice it, it’s a tail event and evaluating the fallout of a potential Brexit was well nigh impossible ahead of time. Sure, economists could guesstimate the likely impact on the UK…
Brexit Fallout Continues: Here’s What To Watch
US and European bourses got off to a rocky start on Monday after a largely positive session overnight in Asia. You’ll want to watch financials here, both in the US and (especially) in Europe. Needless to say, markets were already questioning the solvency of some European banks and now, post-Brexit, we’ve got a real problem.…