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TOPIC: The "eyes" have it - opportunities your watching

The "eyes" have it - opportunities your watching 5 months 2 weeks ago #1

  • TraderMatt
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Hi All,

I've started this thread as a common place for everyone to give their opinion on what opportunities (long or short) you might be currently watching.
The title, the "eyes" have it - is in reference to many eyes providing their opinions here will help us all in capturing great opportunities to look into and hopefully profit from.

A quick disclaimer - refer to the macro voices disclaimer as it applies here - this is not investment advice - always consult a licensed investment professional before making important investment decisions - opinions are those of the individual only. Macro voices (or any individual giving their opinion) shall NOT be liable for losses resulting from investment decisions based on information or viewpoints presented here - always do your own research first!
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The "eyes" have it - opportunities your watching 5 months 2 weeks ago #2

  • TraderMatt
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Now - here's what I'm seeing...
  • o Emerging Markets look like the probability could be in favour to break short. I'm looking for price action under 790 on the mini MSCI Emerging Markets futures (MME)
  • o US Dollar looks like the probability could be in favour to break short. I'm looking for price action under 94.30 on the US Dollar Futures DX
  • o Cotton (CT) and Corn (ZC) look like they have a leaning probability for a move higher - especially if the US dollar turns down

Thoughts? Agree/Disagree? Anyone watching anything else at the moment?

...also to add - I'm seeing whipsaw's everywhere at the moment! Very difficult trading conditions. I've got fairly wide stops set to avoid the bleed!
Last Edit: 5 months 2 weeks ago by TraderMatt.
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The "eyes" have it - opportunities your watching 5 months 2 weeks ago #3

  • ErikTownsend
    Erik Townsend
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Thanks, Matt! Great topic idea. Thanks for starting it.

Something interesting happened last two days that I forgot to mention on the show. As front-month WTI started collapsing in earnest, I would have expected the time spreads to widen. You know the logic - more volatile front month falling fast while lest volatile back months are more stable. But the OPPOSITE happened, meaning long-dated contracts were being sold even more aggressively than the front month.

What does this mean? I THINK the answer is that producers had already hedged PART of their forward production, but were optimistic about higher prices coming. Once it became clear (almost perfectly coincident with the break below the lower edge of the ascending wedge in WTI) that the party might be ending, I speculate there was a fresh round of "wait! I changed my mind! I wanna hedge afterall!" selling in the back months. Other theories welcome...

Best,
Erik
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The "eyes" have it - opportunities your watching 5 months 2 weeks ago #4

  • TraderMatt
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That's an intriguing analysis Erik.
The markets have only just opened for this week, and I'm seeing some very interesting moves...

- S&P500 has already shot up 1% to 2080
- US Dollar is down over half a percent to 93.75
- A lot of the commodity currencies and commodities themselves are taking off to the upside (although not gold).

I'm wondering if this is the market saying that Brexit is not a concern (presumably as they will remain in) and we could get a blow off top to new highs?
(...and Erik it looks like oil is moving in sync higher with the risk-on trade).

I'm thinking this is either a 'buy the rumour, sell the fact' play until the vote is here on Thursday - or this is positioning for a solid new leg higher.

I'm wondering what that will do to oil hedges as well Erik - if we shoot through 51-52 dollar resistance levels. I'm seeing a clear run up to 60 dollars as the next strong resistance level...
Last Edit: 5 months 2 weeks ago by TraderMatt.
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The "eyes" have it - opportunities your watching 5 months 2 weeks ago #5

  • ErikTownsend
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As front-month oil prices have turned up (would normally indicate spread NARROWING should occur), the spreads have in fact begun to widen, with the N/Q spread now trading at .57, vs. .51 when we taped the show Thursday and prices were was down at a 45 handle on WTI briefly.

This seems to confirm my hypothesis, i.e. that when the market started to tank on Brexit concerns, producers jumped in for a round of panic "no wait!" hedging, but they are no longer doing so as prices look to be recovering on collapsing Brexit fears.

We've got Steve Keen coming back to talk alternative currencies on this week's show, but I plan to ask him his perspective on Brexit as well.

Best,
Erik
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The "eyes" have it - opportunities your watching 5 months 1 week ago #6

  • TraderMatt
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Looks like there may be new trends afoot thanks to Brexit! ...and a few other countries (e.g. Netherlands) might be next. I'm thinking it's time to put those shorts back on!
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The "eyes" have it - opportunities your watching 5 months 1 week ago #7

  • ErikTownsend
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Indeed, it will be very interesting to see whether the contagion effect that many have predicted will occur.

What I'm surprised nobody is talking about today is that this was a NON-BINDING referendum. I'm fully expecting at some point the UK gov't will announce that they're taking the popular vote "under advisement" and CONSIDERING whether to initiate the process with the EU. That will of course cause massive backlash from UKIP and Britain First, etc. But I definitely am not sold on the idea that most seem to be accepting as fact today, i.e. that this is a "done deal" for the UK to leave the EU.

Best,
Erik
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