Pro Macro: In Focus – The Horse Whisperers

Published on: August 15th, 2022

The summer equity relief rally continues apace with equities comforted by a prospective peak in inflation. But recessionary clouds are gathering on the horizon and will be with us by the end of Q3/beginning of Q4. Policymakers are still busy slamming the stable door long after the inflation stallion bolted from the farmyard. Getting him back will require a horse whisperer of greater talent than JP and his merry posse of ranchers at the Fed.


  • YC
    Yi C.
    16 August 2022 @ 16:24
    correction needed: ITB/DIA: SELL* at ~0.1875. Stop 0.2. Target ~0.1
    • YC
      Yi C.
      16 August 2022 @ 16:32
      correction needed: ITB/DIA: SELL* at ~0.1875. Stop 0.2. Target ~0.12
  • MG
    Miguel G.
    17 August 2022 @ 09:30
    Awesome write up Julian as always, but Id like to add that while positioning is extremely short in the spx and iwm that isnt the case for the nasdaq. We'll have to see what those updated figures look like this Friday, but dare I say the nasdaq is probably a safer short if you are in the bear rally camp?
  • JL
    John L.
    17 August 2022 @ 12:36
    Didn't get an email notification about this one - any idea why?
  • RE
    Raymond E.
    17 August 2022 @ 18:35
    I aim to follow the trades as they are presented, thus to have roughly the same results as reported in the monthly Trade Portfolio update. In the past there has been some confusion as to when stops were to be triggered — either end of day or anytime. One of the current trades, EDZ3, was well below the stop earlier today, yet now is above the stop. Following the same criteria that are used for the monthly Trade Portfolio update, should this position have already been closed or should one wait until the close to determine whether to do so? Of course there is then the question as to when is the market close? For a stock on an exchange the answer is relatively straightforward. For a futures contract, the answer is less clear. It would be helpful if the criteria followed for the monthly Trade Portfolio update were stated clearly.
    • JL
      John L.
      19 August 2022 @ 09:26
      assume intraday unless it states end of day
    • DD
      Donal D.
      19 August 2022 @ 03:23
      Just to clarify I normally will hold a stock anywhere from several months to 1-2 years obviously if you are day trading what I do will not work for you.
    • DD
      Donal D.
      19 August 2022 @ 02:20
      Raymond, Its a good question and interested to get other people perspective. Personally I use the end of day price as opposed to intraday to trigger my stops.
  • BM
    Brent M.
    17 August 2022 @ 23:43
    Can someone help me understand how to make these spread trades? How do you trade ITB vs DIA?
    • DD
      Donal D.
      19 August 2022 @ 02:18
      Hi Brent, I may be completely wrong and there may be a simpler way but here is how I do it. I simply sold ITB short and then bought shares in the DIA etf for the same amount. Given the disparity in price its important to match up the value and not the number of shares. Hope this helps
    • CB
      Charles B.
      18 August 2022 @ 22:01
      I have the same question
  • JM
    John M.
    18 August 2022 @ 17:59
    Why ITB as a spread trade and not just a short?
    • SC
      Sanjeev C.
      18 October 2022 @ 00:46
      Both may go down, but, if executed correctly, the spread will make money if DIA performs better than ITB. Since you would be short on ITB
    • RR
      Raj R.
      21 August 2022 @ 06:54
      Yes same question. Why do we need to buy DIA, if we know the upside in stocks is limited?
  • RR
    Raj R.
    8 October 2022 @ 06:41
    Good analysis!