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Let's kick off with the broad market. SPY rejected the 200 day moving average as rates started to perk back up along with energy.
This created one of the easiest trades I have ever seen in months. Remember, we are traders and our job is to identify patterns to take advantage of. After a survey of traders this weekend, I still find it amazing to believe that people think the correlation to rates at the moment is somehow weak. If that was true, this would not have been possible given our entire lean on the market is based on what rates are doing.
But what about now? Well it gets a lot more tricky. TLT completed a 13 sequential which, if played out, would be very bullish for the market overall.
I'm having a hard time seeing how this could play out though, considering that energy looks like its about to have another big leg up. Last week we made 150% on DVN calls. Oil has an active 13 bottom.
I think the trade is NOT TO GET CAUGHT with your pants down. Once bonds make it very clear what the trade is, we have to pounce with full strength. META is on 12/13 near the 50 day moving average, just in time for the 13 sequential on TLT.
Brazil looks like an interesting short as it failed the 200 day and has a 9 sell.
There is an ETF, BZQ, which is an ultrashort ETF of Brazil.
So, the long story short is -- its too early to understand what rates are about to do. If the bonds reverse and become strong, buy tech and risk. If bonds meander to sideways and down, short EM and long energy. KIS. Join the Discord for live ideas and execution. See you there.