Trading Desk Notes - Nov 17thSubmitted by Polar Futures Group on November 16th, 2018
Bonds and gold rallied and the US Dollar dropped this week as Fed Chairman Powell and Vice Chairman Clarida both signaled that the Fed may be less aggressive raising interest rates next year than the market had expected. They both saw signs of slowing global growth.
The US Dollar Index had jumped to new 17 month highs early this week so maybe it was due for a 1% correction.
Gold had dropped for 7 consecutive days (falling ~$40) so maybe it was due for a $28 bounce.
Bond prices had fallen to 4 year lows in early November, so maybe they were due for a bounce to 2 month highs.
Energy markets saw WTI bounce ~$3 after tumbling from $77 to $55 (28%) in 7 weeks as sentiment swung from “supply shortage” to “glut” while Nat Gas prices spiked to 5 year highs on worries of an inventory “supply shortage” ahead of the North American winter.
Brexit turmoil created very choppy (mostly negative) price action in the British Pound.
The Canadian Dollar fell ~3 cents from late September to mid-November while WTI fell $22. Western Canada Select traded below $15BBL this week. US/Canada interest rate spreads moved in favor of the US, yet CAD rallied ~1/2 cent off this week’s 4 month lows in reaction to weakness in the USD.
The major US stock market indices tumbled ~12% in October. A rebound rally recovered about 60% of those losses in the following 2 weeks but then prices fell again. Intraday price choppiness has been VERY high. The major indices are now ~8% below their All Time Highs...up ~2% on the year.
The Toronto Stock Index is now 9% below the All Time Highs made in July...down~5% on the year.
My short term trading has been active. I’ve been both long and short the US stock indices and have managed to come out money ahead. I’m trading small size given the big intraday price swings. I’m looking for US stocks to rally going into the Thanksgiving week but if they don’t I’ll exit quickly.