Fading the Market
TheoTraders know not to jump on the bandwagon. The ones that go against the grain are the ones who put the odds in their favor. Tonight let's look at the S&P expected range going into the Brexit vote and what levels we will want to fade.
Mind The “Fracklog”: Here’s Why Oil Prices Can’t Sustain A Near-Term Bounce
There are two reasons why oil prices will have a difficult time sustaining a rally above $50/bbl. One reason is heightened tensions between Saudi Arabia and Iran. We’ve discussed this dynamic here before. Essentially, Iran is angling to ramp production to 4 million b/d. The (former) pariah state has already brought output back up to…
Yellen Testimony Overshadowed By Brexit, Soros Warns Of “Black Friday”
Janet Yellen trekked up Capitol Hill on Tuesday for her semi-annual Humphrey-Hawkins testimony. Frankly, it kind of feels like a snoozer. Here are some of the bullet points: WE DO HAVE LEGAL BASIS TO PURSUE NEGATIVE RATES NOT CONSIDERING NEGATIVE RATES BREXIT-RELATED FINANCIAL VOLATILITY COULD AFFECT U.S. I DON’T THINK RISKS TO FINANCIAL STABILITY ARE…
Is Market Risk Still About the Brexit Vote?
TheoTraders look at all the market correlations to determine what's exactly happening inside the market. For example, we look at the US Bonds which has made a huge move higher ahead of the Brexit vote. Today, with the "leave" possibility off the table you would expect Bonds to have a much more severe reaction lower.…
Stocks, Bonds, Commodities, And Gold: Trading Brexit
The good thing about the Brexit referendum is it’s this week. That rules out the painful prospect that we’ll have to endure the type of summer we suffered through last year when there was a Greece headline every five minutes on market days and every 10 minutes on weekends. Sure, there’s some event risk here,…
Everything Is Fixed, But Watch For “Tape Bombs” Ahead Of Thursday
We woke up Monday morning and everything was fixed. Actually, it started last night when the British pound suddenly spiked above 1.46. Liquidity was thin, according to traders who also told Bloomberg that market-makers in some global banks have been told to cease quoting short-dated GBP options until further notice. The GBP rally set…
Trade Ideas Ahead of Brexit
TheoTraders look at the implied volatility ahead of a major news announcement. This week is the British referendum vote. This is like an earnings announcement for the entire market. Bonds have already made a huge move in anticipation of the vote. Even if vote is to stay we could see a lot of volatility from…
Time To Rotate Out Of Stocks And Into… Overpriced Bonds?
It wasn’t a good week for stocks. The Dow and the S&P shed more than 1% while the Nasdaq lost nearly 2%. The problem: the UK may vote to leave the EU next week. “Brexit” - like “Grexit” before it - is something that most US equity investors neither care about nor want to hear…
In Dramatic Shift, Fed’s Bullard Says FOMC Should Stop Making Long-Run Projections
This has been the year that markets finally began to question central banks in earnest. It started in January when the Nikkei took a dive and the yen surged following the Bank of Japan’s decision to take rates into negative territory. That was the shot across the bow. By all accounts, the move below zero…
Brexit Drama Reaches Fever Pitch Following Death Of British MP
Even Jim Cramer admits it: global macro is in the driver’s seat. On Friday morning the boisterous Mad Money host bemoaned the fact that no one seems to care about anything but Brexit and geopolitics. “I’m probably the only person in the world reading the Kroger quarter,” Cramer lamented. “It’s only the biggest grocery store…