Global macro trader, 8+ yrs. Founder @macroinsight. CIO at Elephantus Capital Talk on Macro, Technical, and positioning
Joined November 2022
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Markets are at a major inflection point right now, and it’s not just one chart. Bonds, equities, the dollar, commodities, and geopolitics are all pressing at once.
As a trader/investor there are times to double down and times to take your foot off the gas. Right now I’m part of the latter - watching closely not forcing size.
And here's why:
Inverted charts may help your psychological barrier to shorting.
Or help you overcome your bag bias.
11
What a surprise.
xitter.gq/_AKMacro/status/212005…
US INFLATION COMES IN HOTTER THAN EXPECTED IN OCTOBER
US headline CPI rose 0.4% in October, above the 0.3% forecast, while core CPI increased 0.3% versus 0.2% expected.
Food prices jumped 0.5%, energy rose 0.7%, and gasoline climbed 1.0%.
Housing costs increased 0.3%, while real earnings for private-sector workers were unchanged.
The hotter-than-expected inflation report strengthens the case for further Fed rate hikes.
43
The US Dollar index has broken out of a 500+ day range and now forming a potential bull flag. A strong rise in the dollar can mean a steep drop on equities.
Not always but something I am keeping in mind.
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43
Soft commodities are experiencing a very hard drawdown right now, erasing almost all gains from the past 3-4 months.
I think this is an exceptional buying opportunity soon. With inflation showing no signs of slowing down + these assets are entering their prime seasonal windows shortly.
I think a lot of people will miss the commodity bull market trying to knife catch tech stocks.
Corn, Wheat, Soybeans - A few good sized bets will apy off very soon.
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30
I don't think anything has fundamentally changed (yet) within the US and Iran situation. Ships are still getting targeted and October saw the most hits since the start of the war.
I am long Oil and looking to build this position on any signs of strength.
37
Nasdaq vs Spain for the last 7 trading days.
Very clear where the momentum and therefore long setups should be.
Even on a bounce, US indices face more resistance and issues overhead.
Keep it simple.
Just for this week - if you are thinking of longing US indices (Nasdaq, S&P, Dow Jones, etc). Just stop and go look at some European indices before you pull the trigger.
Much cleaner setups, less overhead resistance/issues, and cleaner momentum.
44
The more I look at markets right now, the less I want to trade. No clear picture and no strong gut feeling. I am inclined to more downside from here but this can take time to develop (or not).
TLDR waiting.
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46
Building positions here, a loss of 1800-1700 on the weekly would be bearish.
Will be a multi-month low, but 3k is the first target I would be willing to take some risk off the table.
Wouldn't be surprised to see a hot CPI print today - forecast at 0.2% + the US gov has removed the YoY data (likely hiding how bad the inflation is).
Probably see a move down on Gold into some very appealing buying zones.
I think Gold and Silver are beginning to wake up.
Just for this week - if you are thinking of longing US indices (Nasdaq, S&P, Dow Jones, etc). Just stop and go look at some European indices before you pull the trigger.
Much cleaner setups, less overhead resistance/issues, and cleaner momentum.
ethereum:native around 2000 is a gift, any dips below are even better opportunities.
If we start to trade below 1800 I would re-evaluate but until then its dip buying season.
Over the next few weeks I belive tech, high beta, and "risk on" stocks can move higher - which would be the ideal place for investors to de-leverage and take some chips off the board.
The market has structurally moved lower with heavy selling, showing its hand (meaning lower prices are very likely on the way).
Healthcare, defence, and banking sectors look much stronger and can continue higher for longer while this happens (Cola, Berkshire, etc).
I think the aggressive sell of is mainly done for now in Tradfi, and we can see a move up to fill this gap - which can take time.
Some slow grind/ranging price action - maybe come and take the lows before higher, but ultimately leading to another move lower.
Expecting Gold to greatly outperform the S&P500 for the near term future.
This does not automatically assume Gold up and stocks down, just you would rather want to look for longs in Gold and shorts in stocks.
Not a reason to fire a trade in either right now, just a filter.
The mid 70k region was the bounce zone, we did not see any follow through and now we just wait.
Sub 75k-62k is where I expect a macro bottom to form, from which we should see the bull-run resume.
Patience.
7700 was indeed where we saw weakness step in.
Game plan from here is to sit andwatch, maybe a short swing long or short depending on price, but not looking for long term positioning until we reclaim the range or see sub 7k.
Job done for now. Other markets look much clearer.
7500 held well and the rotation back into the range has started.
You probably don't see much weakness or pullbacks until the mid range around 7700. This is where you look for a dip to position back into the range highs at 7850-7900.
The range high is the final boss - overcome this and expect a clean EOY rally. Fail to break through and the markets may be warning you about a bigger correction on the way.
After a day in markets like today, I think what's best to do is take the rest of trading week off.
Relax, go outside, touch some grass, and enjoy the weekend.
You are not missing any generational opportunities today or tomorrow.