I would like to present you my current macro views. The markets are at very interesting points and offer very good opportunities at the moment.
The format of this post will be slightly different than usual, I will post my tweets because I think that the combination offers a better reading experience.
I would like to start with the major stock market indices. There is so much interest in this market thus everyone has an opinion on it. I’ve been seeing so many bearish calls lately, such an increase in the negative sentiment,.. Sure, they might be right and as stated many times before, I don’t mind if the markets doubles or goes to zero from here. All I care is to participate from the right side.
Major indices were experiencing a correction in the last three months. They formed different patterns, e.g. S&P 500 formed a triangle. The price is still trapped in the boundaries of it and we’re still waiting for a breakout in either direction. While I would be happy to short it on a decisive break out lower (which also happens to be 200d SMA), I still think the price has a good chance to break out higher.
In the tweet below is an overview of 4 major stock indices.
Next asset class are currencies and of course the US dollar. A frequent reader of my blog knows that I am a long-term USD bear, but this doesn’t mean there are no tradable opportunities in the counter trend direction. I was tweeting for quite some time that the next move in USD could be higher and we might just briefly saw the initial try. I don’t expect to see DXY rally above its recent highs at 104.
If USD rallies this might hurt commodities, starting with crude oil. But what if we see another push higher, which looks to be the path of least resistance?
Sure, USD could continue higher without a pause. This could then hurt oil sooner. But what if USD doesn’t rally at all and crude just shoots through every resistance? I think that no one, even the most bullish traders, is talking about that!
Kevin Muir, The Macro Tourist, just published his view on gold saying that it’s performing extraordinarily well. While I am getting mixed signs, I know one thing for sure. If it bounces from here, then I want to own junior gold miners!
What about bonds? I’ve turned bearish on US 10 year T notes a while back. While I think it still has some room to fall, I wouldn’t be opening a new short position here.
And let me finish with Bitcoin. I was probably tweeting the most about BTC lately. My view is that blockchain technology will revolutionize quite a few aspects of our lives. Thus I think it is very important to follow at least Bitcoin’s price if not also the prices of other cryptos.