What Do We Say To The God Of Death ????

[Rintel]

NOT TODAY ************ !!! 

Today was a good day ! No not just  trading-wise but in general. At the pharmacy,  we had  severe staff shortages , it was all available hands on deck for 10 hours straight ! 

Our focus was getting all the necessary work done to push the business forward and achieve our retail  health service targets and we blew it out of the water! 

Focus is a very powerful tool. Being able to ignore the noise and zero in on what is important has served me very well today. 

Yesterday I posted this on twitter

 

   It is one of the many tools I use daily when analysing the markets for opportunities. Understanding this dynamic served me very well today even in the midst of the #Evergrande and UK #Energy crisis, I was able to tune out the noise and focus on what the market was actually saying. After 6 solid months of getting my head down to fine tune my process and learn new ways of thinking about markets, Things are starting to look much clearer.

But , thats in the past. 

Now that we have had the "bounce", now what ???? Well, after Jerome's shindig today, it is quite evident that he doesn't want to tighten policy into an economic slowdown. Where does that leave us ???? I don't know.  But what I do know is that I am observing the same occurrences across major macro assets....i.e. returns are approaching the top end of their respective ranges. This means .....DO NOT CHASE !! We are still in the midst of a slowdown in industrial production with input prices rising like there is no tomorrow.

Here are the returns of the SP500 as of close today. 

 

And the FTSE

 

 

The DOW

 

    I dunno about you but...... the risk reward is not worth it from here. I suspect,  it is  likely we experience some deceleration in returns from here. How far ? I dunno.  Perhaps we saw the early stages of that by close today? Time will tell.

What I can do for now is do what the math says and reduce some risk. Kai from https://www.macrotechnicals.com/   has also made some interesting observations in the US 10yr rate. In his recent post he wrote  " However, US 10s yields keep pushing upwards and testing 1.35/1.38 zone. Ok, NFIB, NY empire, Philly Fed all saw a positive rebound. Or the market is playing a new reflation theme/ super taper expectations ?" .

     I think he has a point here.  In rate of change terms, the global economy could reaccelerate between Q4 2021 to Q2 2022. Given that there is potentially a new stimulus package in the works . Also, throw in the likelihood of the CCP stepping in to save the Chinese economy from a potentially precarious position ( Evergrande etc)   Perhaps  the treasury market is picking this up now ?? It is worth keeping an eye on for sure. Check out his full post. The man knows his stuff. I was lucky and fortunate enough to pick his brains a few months ago when trying to fine tune my process check him out or reach out to him on twitter on  https://twitter.com/MacroTechnicals. 

Thats all my brain can muster for now I've had two double gins hehe . It's another brutal day at the pharmacy tomorrow but I am sure my team and I will smash it. Gotta get some sleep.

Take care guys... l8trz!!

CA

 

PS;  If you guys like gin you need to try Hendricks...... phoar... that **** is good!! Oh and don't forget to get a flu jab !! If you are over 50,  its free!!

 

[786Trader]

Great post... Inflation is less transient than central bankers hope. The current result is transient (they hope) stagflation. Reflationary trends are more likely than not, though the  general market correction that is being deferred once more, is likely over due come Q1 22....more likely before. 

As for your clever strategy, respect. As a simple Oil and gas trader I judge different metrics (like actual physical supply, storage and expected and real demand) for example. Plus order flow is useful.

Have a great day trading all. Finally getting round to booking some holiday time that's not in the UK...which is a good sign..