During last week's Conference Call we discussed a lot of the potential catalysts to drive Equities as an asset class higher over the intermediate/long-term, however, we continue to err on the cautious side given our outlook for sideways chop in the short-term.
Thursday I wrote about a growing number of potential "oopsies" (failed moves), so I want to follow up on that post and outline another group of charts that I think are suggesting short-term weakness in stocks.
If the US Dollar is falling, International Equities trading via US listed ETFs should outperform US Stocks. When the US Dollar is rising, International Equities should underperform US Stocks.
Sounds like a logical relationship, but as usual, it's not that simple.
During last week's Conference Call we discussed a lot of the potential catalysts for a lower US Dollar, so I wrote a free post talking about whether a weaker US Dollar means US stocks have to underperform International stocks. If you haven't read that, please do that first, because in this post I'm going to quickly touch on a short-term theme that continues to build within our Global ETF Ratio universe.
The Mystery Chart I posted Tuesday was a bit different because I told you what type of security it was and that it wasn't inverted. My objective with this chart was similar to what it always is, but more nuanced in that I was trying to get a feel for people's willingness to buy breakouts in stocks right now, or if there was any apprehension.
I received a ton of great responses via Twitter and email, so thank you for that. Let's get into those answers and the actual chart.
Do you live on the East coast and ever wonder what it would be like to be a trader on the West coast? Could you handle working on a much different schedule? In today's video, we chat with my pal Mehmet Gunay who I met during his time at SMB Capital when I lived in New York City. Today, he lives in San Francisco and seems to have adjusted pretty well to the time change and lifestyle. I would have to agree with him. I enjoy the west coast hours much better than when I lived in New York. The ability to do things after work with plenty of sun light left is very appealing.
When most of us think of bank stocks, we're generally not saying positive things. We have a bad taste in our mouth, particularly since early last year. But that's not the case in India.
Yesterday during our Members-Only Conference Call we discussed a lot of themes and trade ideas, but I wanted to highlight two charts that remain an issue for our bullish Equities thesis.
For those new to the exercise, we take a chart of interest and eliminate the x and y-axes and and all labels eliminated to minimize bias. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.
The point here is to not guess what it is, but instead to think about what you would do right now.Buy,Sell, or Do Nothing?
The cool thing about working with smart people is being able to learn from them. Having Sean McLaughlin on our team has made everyone better, not just our clients but us as well. In today's video, we tackle the question of when it makes more sense to finance an options position by selling a different contract to collect the income vs simply just buying calls or puts. As usual, Sean does a nice job of explaining this in a way that anyone could understand.
Last week I had the pleasure of being on Real Vision TV where I recorded two segments, one on Bonds and Equities pairs trade (short EWJ/SPY).
The video to the Equities trade is here, but since I'm not sure if/when the free video about Bonds will be out I wanted to go through that trade for you all on the blog. And if the video does come out, I'll be sure to share it.
