As a follow on to my last post Get The Facts - Make Your Own Opinions. I gave myself the rule that I couldn't be flat, I had to be either long or short, no middle ground. Markets I haven't mentioned I simply haven't read enough to form an opinion so am indifferent. I will update this post as and when I'm ready.
My feeling is the euro is a steaming pile of shit, forgetting the "political uncertainty" that I and apparently everyone has no idea how to measure. I reasoned that EU has a disgusting amount of debt spread all over the place (countries, institutions and companies) that they are nowhere near fixing and the ECB is still dovish and QEing which can only mean supply. And the USD, despite Trump, is still the global reserve currency and the Fed despite raising "dovishly"( whatever the fuck that means) is still raising and is going to continue to raise and even if much of these raises are priced in a carry trade will materialise that should keep some kind of USD demand in play. SO I'm short the euro and long the dollar and this is why in Feb I shorted the EU on a monthly domino candle and held it through a fairly large rally and will continue to look to add to it (NB I missed the D1 pin bar of 6 days ago grrr)
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a positive catalyst for the USD. The Fed and central banks have been the driving factor in stock markets for the last 10 years. A sell off will create a supply of stock and a demand for USD so I will now continue with my bullish outlook for now.
US (developed world) stocks aren't going to crash. Trump might not get his tax cut or stimulus but the economy is improving. More importantly, we are living in a world where central banks will always be active market participants. They will never be able to remove the liquidity they have put in without crashing the markets and so probably never will. They will leave it in and slow down the amount of QE they're adding and gradually raise rates. Should something come along that would ordinarily cause a fall (recession, political uncertainty) they'll just QE it away yet again. The only time stocks are going to fall is when the Fed decides it wants them to due to inflationary pressures. Everyone thinks it's a phoney market but it's not, markets are what they are, just because there are new players in the market it doesn't make it any less real. You should always trade with the smart (big) money and for the considerable future that will be the central banks. Big money is default long = constant demand, So I'm long.
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a negative catalyst for stocks. Like it or not the Fed have been the driving factor for stock markets for nearly a decade, this will mark a change to the status quo and will cause uncertainty (supply). I will now be preparing for some kind of stock correction.
I'm long the GBP, in my mind, all risk is priced in. Big money has to average in and out of positions, if I were them I would have used the last move down to close out my positions. A50 was priced in, EU negotiations are priced in. Everyone's assuming the UK is fucked; ergo it should only take slightly less shit news for the GBP to rise. In my mind, there's no one of any consequence left to short so it will only take a small amount of demand to turn the GBP, so in my mind, it can only rise.
Oh and look what just turned up while I was writing this... Looks like I'm with the big money on this one.
Simply put I'm short. I believe Abe and the BoJ are finally starting to turn the Japanese economy with Abenomics, which is requiring a shitload of QE = Huge supply of JPY. If the central bank is printing and the market believes their message, I'm selling.
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a negative catalyst for stocks. Like it not the Fed have been the driving factor for stock markets for nearly a decade, this is a change to the status quo and without further information and detail will likely cause some fear/uncertainty (supply of stock) and demand for safe havens so I will now be preparing for a potential JPY rally.
I wish everyone would make their mind up and decide whether this is a safe haven or an inflation hedge?! To me it's a safe haven, I would go to this if I was uncertain about the world. But the global economy is growing, as is inflation so I would rather be in an asset that earns interest ( is hedged against inflation) because I believe there will be more demand for it.
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a positive catalyst for gold. Like it not the Fed have been the driving factor for stock markets for nearly a decade, this is a change to the status quo and without further information and detail will likely cause some fear/uncertainty (supply of stock) and demand for safe havens so I will now be preparing for a potential gold rally.
euro and dollar
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a positive catalyst for the USD. The Fed and central banks have been the driving factor in stock markets for the last 10 years. A sell off will create a supply of stock and a demand for USD so I will now continue with my bullish outlook for now.
stocks
US (developed world) stocks aren't going to crash. Trump might not get his tax cut or stimulus but the economy is improving. More importantly, we are living in a world where central banks will always be active market participants. They will never be able to remove the liquidity they have put in without crashing the markets and so probably never will. They will leave it in and slow down the amount of QE they're adding and gradually raise rates. Should something come along that would ordinarily cause a fall (recession, political uncertainty) they'll just QE it away yet again. The only time stocks are going to fall is when the Fed decides it wants them to due to inflationary pressures. Everyone thinks it's a phoney market but it's not, markets are what they are, just because there are new players in the market it doesn't make it any less real. You should always trade with the smart (big) money and for the considerable future that will be the central banks. Big money is default long = constant demand, So I'm long.
pound sterling
I'm long the GBP, in my mind, all risk is priced in. Big money has to average in and out of positions, if I were them I would have used the last move down to close out my positions. A50 was priced in, EU negotiations are priced in. Everyone's assuming the UK is fucked; ergo it should only take slightly less shit news for the GBP to rise. In my mind, there's no one of any consequence left to short so it will only take a small amount of demand to turn the GBP, so in my mind, it can only rise.
Oh and look what just turned up while I was writing this... Looks like I'm with the big money on this one.
yen
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a negative catalyst for stocks. Like it not the Fed have been the driving factor for stock markets for nearly a decade, this is a change to the status quo and without further information and detail will likely cause some fear/uncertainty (supply of stock) and demand for safe havens so I will now be preparing for a potential JPY rally.
crude
I'm short. It's not the failed OPEC cut, it's the fact that shale producers are profitable from somewhere around $35-40 per barrel and US rig count is growing every month. Supply is just going to keep coming in earlier and will continue to.
gold
Update 050417: With new Fed minutes today suggesting that they think stocks are near bubble territory and a desire to trim their $4.5T balance sheet, this feels like a positive catalyst for gold. Like it not the Fed have been the driving factor for stock markets for nearly a decade, this is a change to the status quo and without further information and detail will likely cause some fear/uncertainty (supply of stock) and demand for safe havens so I will now be preparing for a potential gold rally.
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