Flash Update – January 27, 2020

Published on: January 27th, 2020

Raoul wants to update you on his thinking…

Comments

  • YO
    Yoshitaka O.
    7 February 2020 @ 10:27
    Hi Raoul, you mentioned in your leaked GMI report that you were also eyeing Ethereum. What are you specifically looking for before you decide to pull the trigger and allocate to it? Thanks for the insights
  • CS
    Cameron S.
    6 February 2020 @ 19:29
    When trading 10 year futures, which month are people using?
  • MG
    Miguel G.
    2 February 2020 @ 17:46
    Raoul, with China announcing stimulus measures what kind of implications would this have on the US dollar? Shouldn't this keep the dollar big and possibly open the door to that napalm move in the dollar we've been waiting so long for?
    • YO
      Yoshitaka O.
      6 February 2020 @ 14:59
      Equity markets are now back to all-time highs on the back of fresh chinese liquidity and rumours of coronavirus vaccine hopes! We live in truly interesting times...
  • AG
    Ashish G.
    30 January 2020 @ 18:11
    Raoul with the 10-yr nearing 1.50 support and with the move we have had in Eurodollars, how do you think about risk management here? I am assuming you are of the view we finally break through, but just curious if you have any incremental thoughts given the move that is already taken place? Much appreciated.
    • RP
      Raoul P. | Founder
      31 January 2020 @ 23:02
      Good question - my view is that we are enough in profits that we can suffer a bounces but it should last more than three of four days, in my view. Not yet.
  • YO
    Yoshitaka O.
    29 January 2020 @ 10:28
    Raoul, would you still recommend shorting the GBP against USD? It is currently 8% away from your initial entry. I am looking to use GBP as a source of leverage for my portfolio which is predominantly TLT (47%) and GLD (15%) now. Hopefully to take advantage of potential downside to GBP as well as its lower interest rate vs USD Thanks
    • RP
      Raoul P. | Founder
      29 January 2020 @ 21:18
      Yes...
    • YO
      Yoshitaka O.
      30 January 2020 @ 12:04
      Raoul, I was also wondering about your thought process why you did not recommend to short the HKD against the USD. Considering that HK is one of the major hotspots for the coronavirus crisis as well as geopolitical instability. Also you brought on Kyle Bass on RV TV who went all in on shorting the HKD. Appreciate if you would be so kind to share your rationale behind your decision (to not short the HKD, while you short the AUD, EUR and GBP). Was it technical analysis that mainly contributed to that? Many thanks
    • RP
      Raoul P. | Founder
      30 January 2020 @ 12:47
      I dont have a clear view on the HKD as its more of a special situation as opposed to a freely traded currency that will easily adapt to the change in macro conditions. That doesn't mean it won't work but this doesn't express my trade as clearly as it might not work.
    • JA
      Joseph A.
      31 January 2020 @ 03:52
      GBP/USD is in a really tight wedge pattern at the moment of lower highs and higher lows. The pop up for GBP yesterday after Carney's last interest rate meeting but with it is still inside the wedge suggests a breakout could be imminent with Brexit officially happening tonight 11pm GMT (Friday 31st January).
    • JA
      Joseph A.
      31 January 2020 @ 15:42
      GBPUSD update is it is out of the wedge to the upside and if it takes out 1.3175 the chart pattern is remarkably similar looking to the bond trade breakout making it a buy not a sell. Thoughts Raoul?
  • MP
    Matthew P.
    27 January 2020 @ 16:44
    Thanks raoul
    • MP
      Matthew P.
      27 January 2020 @ 16:48
      Fyi, I suspect those that are panicking in the weeds on how to execute the trade idea when you clearly stated how are in the vocal minority. Don't waste too much energy and focus on the markets and ideas. Thanks again great calls!
    • JL
      Jack L.
      27 January 2020 @ 21:02
      Agree with @Matthew P. -- I consider my purchase of MI access akin to buying a ticket to go helicopter skiing off-piste in avalanche territory right after a load of fresh snow has dropped. Experienced, confident skiers/boarders only. Not the right venue to be figuring out what kind of skis or bindings one should have nor to be hand-held while learning the basics of avalanche risk management.
    • HM
      Harry M. | Real Vision
      29 January 2020 @ 18:08
      I think Jack L makes a fine point. If you have never traded ZNs before this may not be the time to place a large trade, even if you agree with the thesis. If you are familiar with bond futures then you will look at the argument and make your own mind up. But so far so good.
    • IB
      Ivan B.
      30 January 2020 @ 10:17
      Matthew, who is panicking? Harry, who says about placing a large trade? You gentlemen are making lots of assumptions here. All people are asking is some ranges/entry points, some key levels. When you publish MI portfolio update you have entry prices, why don’t include this info when you recommend a trade? As for majority or minority of these sort of comments it’s worth reading comments to the January portfolio update… Play nicely and good luck with your trades/investments everyone.
  • am
    alexander m.
    30 January 2020 @ 05:32
    Sorry for the newbie question, when buying the Dec21 ED calls, can you accurately estimate option market of the value if rates move favourably? If so, does anyone have some good resources to study for this? Thanks in advance
    • am
      alexander m.
      30 January 2020 @ 05:57
      meant market value of the option*
  • YW
    YM W.
    29 January 2020 @ 09:55
    Great piece Raoul! Just looking at the longer term Eurodollar chart comparison seems to suggest a trajectory into negative rates in the US. Would appreciate if you could share your thoughts on whether and if so how you see this playing out?
    • RP
      Raoul P. | Founder
      29 January 2020 @ 21:19
      I really dont know, so lets take one step at a time...
  • PW
    Pete W.
    28 January 2020 @ 15:41
    Does anybody have a handle on the sensitivity of $TLT to rate moves (DV01jI think the duration is~17 yrs(?). Just trying to size a TLT call trade. Thanks in advance.
  • RP
    Raoul P. | Founder
    28 January 2020 @ 11:23
    I know nothing about viruses but the memories of SARS are causing rapid, outsized reactions from China and other states to not repeat it, with borders closing and travel/trade in lock down. Regardless of whether the coronavirus is worse than SARS or not, the economic impact will be much bigger. And Central Banks will be part of it as world trade was already negative and ISM at 47. The risks are too high not to act quickly. 2-year yields are within a few bps of the yield lows..
  • YO
    Yoshitaka O.
    28 January 2020 @ 05:40
    Raoul, this piece is phenomenal and much awaited. Any price or rate targets or will there be another flash update for that?
  • JI
    Janne I.
    27 January 2020 @ 18:53
    Are you guys planning to make any content about the likely Sanders presidency, and what effects this will have to the economy? The last releases have been incredible, thank you.
    • RP
      Raoul P. | Founder
      27 January 2020 @ 20:28
      Yes, at some point... working on it.
  • TH
    Trina H.
    27 January 2020 @ 16:51
    How does one buy 10 year notes? Is there an ETF?
    • MP
      Matthew P.
      27 January 2020 @ 17:37
      CME globex /ZN for futures, or $TLT
    • BC
      Brent C.
      27 January 2020 @ 18:11
      IEF - 7-10 year Treasury Bond ETF
    • JW
      J W.
      27 January 2020 @ 18:12
      SPTL or VGLT have 10 Yr notes.....
  • JK
    James K.
    27 January 2020 @ 17:20
    Is TIPS another option in here ... ? Thanks
    • RP
      Raoul P. | Founder
      27 January 2020 @ 18:11
      I never trade them but if you know and understand them, sure. But they won't trade as well as bond futures.
  • JW
    Joel W.
    27 January 2020 @ 17:01
    Thanks Raoul for delivering value this morning!