Discover more from Investor Charts
Flash Update: Trade Setups That Make Sense
Euro holding trend support. I would be a buyer with a tight stop against this week's low. With commodity supercycle flashing signs of pure pandemonium in some spots, dollar reversals could be swift and fast.
I'm also starting to think that some banks could be good dip trades here. Why? My feeling is the most obvious resolution to the crisis at hand is a de-escalation which will happen over the next couple of weeks. There is a chance that a hawkish Fed could still be on the table and it seems the best risk-reward for that is not doing some crazy interest rate spread trade but rather buying banks. You get the stock beta and interest rate alpha. Nice trend channel low in Citigroup today.
The impulsive move off the lows in some of the growth also seems like the risk-reward is starting to lean to the long side. I've been trading in and out of UPST since the IPO and it has been a great trading vehicle. Coming into trend line support / fib retracements here in the short-term. Be very careful with these though.
"Be very careful" -- what a useless platitude in investing. It literally hurts to write this mumbo jumbo out. Newsletters, right? I'm saying that because I can't pound the table hard enough on this bearish AMZN chart which we have been talking about for months. 3200 failed. Trend broke. It is in a bear market. That is my only crux not to be overweight on tech at the moment.
Am I doing anything in commodities? No, not really. I am mostly trading bonds (on the short side, unsuccessfully) because I think the risk-reward now is for hawkish Fed to stay the course and Z3 eurodollars get absolutely scorched and reverse all of these policy mistake bids.
Anyway, that is the quick one from me. Will have deeper thoughts later.