Yes, its a very technical chapter. Most people might not understand but I wanted to have an options guy. I also wanted a futures trader but it seems that they are all broke lol
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Global Macro Trading Journal
- Thread starter Daal
- Start date
Yes, its a very technical chapter. Most people might not understand but I wanted to have an options guy. I also wanted a futures trader but it seems that they are all broke lol
Congrats on the book
The death of this thread is telling, macro in 2014 thus far has been brutal. Congrats to Daal though, gotta evolve to move on.
It looks to me that this market is under control not from the Fed but from bullish managers. Everyone is scared to death of losing their jobs and fees so everytime the market ramps, everybody has to be in. More and more of the money is going to guys who are longing equities and are killing it. People that are not doing that are going out of business so more and more of the volume is coming from bullish managers who don't care about anything and are true believers . Other strategies are doing terribly, anyone shorting is out of business (unless its long-short with an emphasis in the long)
Global macro tend to be fundamentally driven instead of technically or momentum driven, its hard for a global macro guy to be long US equities here with any meaningful size, there are some select opportunities here and there (I mentioned AAPL here at $450 but I sold way too soon). With the indexes just ramping the way they are, investors just keep pulling their money out because they hate to underperform.
This looks to me like some kind of self-reinforcing trend. One way that it dies is by going parabolic and then turning around, usually the idiots buying the parabolic will turn into sellers on the way down and then the self-reinforcing trend will play in the other direction. Can it die without a parabolic? Yes but I think it needs really bad news, otherwise it will just keep grinding it up until there is a parabolic or really bad news
It looks to me that this market is under control not from the Fed but from bullish managers. Everyone is scared to death of losing their jobs and fees so everytime the market ramps, everybody has to be in. More and more of the money is going to guys who are longing equities and are killing it. People that are not doing that are going out of business so more and more of the volume is coming from bullish managers who don't care about anything and are true believers . Other strategies are doing terribly, anyone shorting is out of business (unless its long-short with an emphasis in the long)
Global macro tend to be fundamentally driven instead of technically or momentum driven, its hard for a global macro guy to be long US equities here with any meaningful size, there are some select opportunities here and there (I mentioned AAPL here at $450 but I sold way too soon). With the indexes just ramping the way they are, investors just keep pulling their money out because they hate to underperform.
This looks to me like some kind of self-reinforcing trend. One way that it dies is by going parabolic and then turning around, usually the idiots buying the parabolic will turn into sellers on the way down and then the self-reinforcing trend will play in the other direction. Can it die without a parabolic? Yes but I think it needs really bad news, otherwise it will just keep grinding it up until there is a parabolic or really bad news
I agree with this analysis. The relevant example here is the lead-up to the 2000 top: aside from brief pauses of a few months the market won't pull back significantly unless there is an unexpected major disruption somewhere (97 financial crisis, 98 Russian default). When I look out at the landscape it's hard to see where such a catalyst might come from in the near term: governments and CBs seem to have everything pretty much under control. The exception would be true black swans, like a major globally-relevant natural disaster. And that seems like the way it's going to be for at least the next 18 months, perhaps longer, until CB tightening cycles begin to pick up steam.
That's not at all the same as saying there's no opportunity, on the contrary I see excellent opportunities in Treasuries and global stocks, and selected US equities as short-squeeze cycles play out and sector rotation takes place, or just go long SPX with cheap hedges.
Congratulations on the book Daal!
In terms of a catalyst for a downward move, higher oil prices could be it.
http://www.zerohedge.com/news/2014-06-12/oil-soars-stocks-slide-fears-iraq-30
In terms of a catalyst for a downward move, higher oil prices could be it.
http://www.zerohedge.com/news/2014-06-12/oil-soars-stocks-slide-fears-iraq-30
Shorted USDHKD in good size
http://www.bloomberg.com/news/2014-...n-currency-peg-defend-amid-merger-demand.html
Unlikely they let the peg go in the next 2-3 weeks but the payoff will be huge compared to the risk if they do so. If it goes back to 7.755-7.76 I will get out
http://www.bloomberg.com/news/2014-...n-currency-peg-defend-amid-merger-demand.html
Unlikely they let the peg go in the next 2-3 weeks but the payoff will be huge compared to the risk if they do so. If it goes back to 7.755-7.76 I will get out
I believe there is positive expectation in doing this trade everytime the band gets tested at 7.75 because one of these times they will let the peg off (they have to print HKD and buy USD to keep it, so it inflates their economy even more)
I don't expect it to happen this time but if they let it float (or reprice the peg) it will be a quick 15-20% gain compared to my likely loss of 0.012%+commissions and interest charges
I don't expect it to happen this time but if they let it float (or reprice the peg) it will be a quick 15-20% gain compared to my likely loss of 0.012%+commissions and interest charges
I believe there is positive expectation in doing this trade everytime the band gets tested at 7.75 because one of these times they will let the peg off (they have to print HKD and buy USD to keep it, so it inflates their economy even more)
I don't expect it to happen this time but if they let it float (or reprice the peg) it will be a quick 15-20% gain compared to my likely loss of 0.012%+commissions and interest charges
They're not going to let it float. The best you can expect is a repeg...which is highly unlikely also. HK isn't some big country. The government there prefers a peg rather than having to deal with other interests with floating currency.