-
My main news headlines tell about the change of presidents. My only real insight at this point is that the auto industry as well as energy industry is a focal point for the foreseeable future. Downstream industries from these are likely going to benefit as well. In Europe, I have my hopes up for a…
-
My headline skimming shows that most talk is about the new administration and its position. Skimming headlines, I can read a lot about trade tariffs, and interestingly, the potential role of bitcoin. From a momentum perspective, it seems to have been a good start to the year, at least in the blue-chip Eurozone index I…
-
May this year bring health and joy to all. Unless a world war breaks out, I will hope that the current wars in the Middle East and Eastern Europe will end. My momentum indicator says that it is okay for me (but not you) to add leverage on a short term basis, i.e. grab a…
-
It is getting to be a very interesting year end. News headlines continue to talk about geopolitics. One question on my mind is that – with the EU’s largest countries (Germany and France) in a sort of political limbo – does the incoming US government consider EU institutions credible and strong enough to make long…
-
I thought yesterday that from a technical chart perspective, then the area of resistance is 4903 to 4914. Today’s high is so far 4913. The market was initially unable to pierce through this area. Does this confirm the resistance and wave structure? Or does the resistance need to be pierced, followed by a drop through…
-
My news headlines are speculative of a rate cut being delivered by the ECB. If the German industrial locomotive has halted, along with the French and Italian economies – and financing costs are the reason – that would seem an adequate enough reason for the ECB to ease financing conditions. However, this is headline reading.…
-
Europe (SX5E) is lagging the US (SPX). The German government collapse seems to be keeping a lid on markets. I am reading that policy uncertainty is the reason. Also, my headlines indicate that Trump is going to continue an America first policy. If there is a divergence in trans-Atlantic regulatory regimes that benefit the US,…
-
I created a backtest routine 2 weeks ago. This is what the (trader) momentum signal looks like over time. To the naked eye, if the signal is above 40, I am feeling comfortable adding exposure. Once it falls below 20, it seems a leveraged position is best avoided. I am performing a series of tests…
-
The overnight pop in US markets saw a European stock market lift in the morning. Around 11.45am CET, European markets reversed, losing the overnight gains and losing a further 1% point at least. The momentum indicator is still not very supportive. I have explicitly calculated trader and investor signals which are 23 and 0, respectively.…
-
Markets were treading water 2 weeks ago, and continue to do so. Two weeks ago, the news headlines were pointing towards earnings releases. Now, news headlines are pointing towards the US election. Anyhow, my preferred momentum indicator is risk averse. It indicates that in the shorter horizons (8 to 21 days) – I call this…
-
As promised, now the modified RS momentum indicator showing risk-reward ticks and probabilities, along with the signal indicator. Once back-testing has been completed, I will show some descriptive statistics and estimated distributions layered on top of histograms. This mode shows that the current momentum indicator is 26. My hypothesis is that an indicator above 50…
-
I’ve done some more work to test the RS model, though still more needs to be done. However, since I am using this to manage my leverage, it sort of fulfills my purpose. I have been doing some risk reward work. Specifically, I have been trying to analyse the distribution of forward returns for a…
-
Not a lot of momentum support as macro headlines continue to be the same. There seems to be some fatigue related to the Middle East war and fears of escalation. The same can be said of the Eastern European front. Perhaps there is an expectation of some de-escalation as winter looms? There seems to be…
-
US election dominates, as does the war in the Middle East. Not much on the Eastern Europe front on my headlines though. I think German automakers made some headlines recently which lead to the recent dip. My indicator shows leverage, i.e. more exposure, may be warranted for some days. Some patience needed still as only…
-
There is quite a bit of underperformance in the European blue-chip EuroStoxx 50 compared to the US benchmark S&P 500. German auto troubles have not gone away from the Chinese competition, but I don’t think that’s the only thing driving the underperformance. There is still trouble around the Black Sea, the Dead Sea and the…
-
My headlines have been reading that liquidity, credit and commodity data coming out of the East is like a headwind to equities. There was also some news about a weak US consumer. Bad news is bad news again i.e. traders may be pricing in a policy error (too little too late), while investors are likely…
-
The Jackson Hole symposium did not seem to disappoint: Euro Stoxx 50 futures have gained about 100 points since then, so the market is reading that the Fed is likely to be dovish sooner than later. Nvidia sold off a bit post its quarterly report. My headlines continue to talk about war in Ukraine and…
-
Markets seem to have priced in everything going around at the moment. If no news is good news, then the grind higher makes sense from the late July sell-off to the early August lows. So, maybe we need to look towards the Fed’s Jackson Hole symposium to get confirmation. As there is no news, is…
-
Headlines and news stories about an escalation in military activities – war – in the Middle East and South East Europe continue to dominate my news feeds. Yet, (1) a stronger US consumer, and (2) higher than expected inflation paving the way for the Fed to correct a widely debated policy mistake have led to…
-
I could read 2 headlines again and again during the last two weeks of July: (1) tech earnings are disappointing while tech companies are doubling down on AI capex, and (2) sector rotation is happening but it is unclear if the rotation will be able to drive the rally. Given the index weights in the…
-
It’s difficult to see a clear sector rotation. Both traders and investors seem to follow each other in lock-step. Except, it has paid to hold banks and basic resources. Autos and Travel seems to need macro and micro (fundamental) positive triggers as these have been (relatively) most unloved. News headlines of the past months seem…
-
Iran will get a new head of state, and warrants are being sought in the ICC. But broad equity markets keep ticking up. Is geopolitics priced in? If this is the case, it could imply two things; (1) equity positions are sufficiently hedged that net portfolio delta is neutral, or (2) equity allocation is at…
-
The graphs indicate that European banks have been bought. Seems like higher for longer rates are priced into bank stocks then. Retail appears to have lost some favour recently, together with basic resources. Autos is a surprise to me.
-
I need to update my news sources. I can’t identify why the market continues to rise today and rose yesterday. So no immediate macro and geopolitical news moving markets. But I do see company news making headlines – positive surprises or bullish reinforcement is what I surmise from here. Over the weekend, however, I did…
-
A Trading 101 lesson that I forgotten I was reminded of the hard way this week. That lesson is that expectations of the future are priced into an asset price. A bit more nuanced, a price is based on a balance of history and future expectations, including discount rates (dependent on monetary policy rates set…
-
That is the question. My headlines are a ceasefire in Gaza, German inflation stable and BoJ intervention to prop up the Yen. Which one is driver is key, that is the question. It is likely a combination of all 3 that is driving today’s market moves. It seems to me that the real economy is…
-
BHP’s bid for Anglo American made my headlines today. Yesterday, it seemed to me tech was driving markets post close with Microsoft and Alphabet making some large moves. US inflation was stronger, but GDP was weaker. If I remember correctly, the Fed has a dual mandate: maximum employment and price stability. Today, EU markets didn’t…
-
I haven’t traded on Friday the 19th, nor on Monday the 22nd: thus no updates. Today, my European headlines read that German PMI rises significantly beyond expectation, 50.x expected actual was 51.7. Despite the confidence displayed by German purchasing managers, ECB’s Nagel commented that rate cuts may still go ahead if inflation remains under control.…
-
Selling pressure persisted through the European morning, with a rally into European close. Selling then continued into US close. Unsure if there are any new drivers, but caution seems to be prevalent with tensions in the Middle East persisting. There seems to be a dearth of positive news (headlines read job cuts in the US),…
-
Eurozone tried to rally from morning lows, but sold off into Europe close. E-minis were not being bought during this time either. There is a potential decoupling of European (softer) and US (higher) inflation. It is unclear to me if there is a real economic fundamental decoupling underway as well. Middle East tensions persist, and…
-
Powell was out midday US trading session saying rates may not be decreased this year as inflation is stubbornly above Fed target. Market attempts to rally, fades into close. Middle East continues to weight on sentiment as well. RSI approaching low 40s, lower trading range being hit.