Here is a recap of what you missed this week (WYMTW). A little different of a format today with a video included to explain a few things and talk through some important items for the market.
The video is below, you can subscribe to that, and I am opening up Q&A again for a weekly Q&A on these posts. Email in to submit - Q&A is at the end this week.
Australian F1 Race this weekend - My Sunday plan.
Inflation Trade is Back On?
The Fed seems to not care about inflation or rather is just going to ignore it and it looks like we’re likely to get something real similar to what happened in the 1970s with the commodities boom.
I want to talk about what that ACTUALLY means for anyone trading markets so that we don’t conflate that statement into this idea that you are going to “Invest” in commodities and that’s it.
Explained some of that here. Technically a lot of names in metals and energy and energy
Inflation Trades in Play (not trade suggestions - you can subscribe to AST Alerts if that is what you want = thesis, structure all provided)
Gold miners (a handful of them): expect share buybacks, dividend increases and paying down debt.
Copper names ( FCX 0.00%↑ SCCO 0.00%↑ ERO 0.00%↑ )
Select energy companies - ( VLO 0.00%↑ / EOG 0.00%↑ and others) - I discussed this last fall with US World Report and News
Nice wins this week in DeltaOne
Trading perspective: more volatility in these names
Investing perspective: tailwinds and longer-term investments + some gem names to pick up and wait out that have not really begun to inflect.
The Market at Large
A lightning round on the market at-large.
BofA Global Fund Manager Survey
Mag 7 Updated
Druckenmiller got Nvidia right - I’ve been trading it from a vol & tail risk perspective at this point
S&P500 Technicals
Exhaustion signals with $5390-$5400 being a key inflection.
A weekly candle that turns bullish above that I expect $5550s.
Playing Economist/Stock Picker v. Trading
Q: do I think a recession is coming?
Q: why are you trading futures v. anything else?
Let’s start with this from a basic level. Economic data like recessions, housing data, inflation etc. is great to talk about in creating a thesis but making money from it is an entirely different thing.
I think (respectfully) most investors forget the part of where they have to structure an idea or act on that information. Most of the time, the evidence, while valid doesn’t translate into an executable trading idea to profit from.
I’m a long/short trader. I believe in multiple positions long and short in a portfolio and there are trades and investments. The data above, for me, is used to develop investments in the 3–12-month window. Those are not trades they’re sized larger, and you sit back and wait on the thesis to play out.
As a trader (or someone who is not managing money) that thought process is pointless - it might give you an ego boost to see the thesis play out, but you can literally just trade the markets and forgo all of this data.
Examples -
Long/short index trading (SPY/QQQ/IWM/DIA)
Trading WTI Crude/WTI options
Trading a basket ETFs back and forth from levels/technical
By the time most of these cyclical trades/macro ideas play out you can (if you just trade) make more from trading rather than trying to think of the markets as this idea that you have to “invest” and wait and hold.
Again, just perspective but if you’re not managing a lot of money then looking at all of this through the lens of data and predicting recession/hard landing, inflation etc. is a pointless endeavor and just not efficient to doing what you’re here to do: create P&L.
Structure was long equity and DITM calls: result was sold the equity hold the DITM calls until I decide the trade is done.
DWAC - Long this week; short-term trade. (not an investment) - My Yahoo Article Commentary.
The weekend video update will be out this morning. Make sure to subscribe here and turn notifications on. This week I’ll be covering this WYMTW post in detail to talk to each point.
*Opinion, not advice.
YouTube Episode: The Inflation Trade is On
https://youtu.be/ymAhVIEpsbo?si=O_Ayx08jDCFE8fvh