You Are Not Alone

Published on: June 19th, 2019

It seems that it’s not all about the Fed, and the Europeans are going to start to ease monetary policy. Raoul digs into the implications and knock-on effects…


  • BC
    Brent C.
    19 June 2019 @ 18:27
    Raoul, interestingly, I believe you could be make the case for large cap, defensive euro equity positions via the same analysis - ex-fins clearly. Extraordinary monetary policy will clearly be needed there first. If big money senses that could be close, you could potentially see money stepping in to some of those names. The underperformance of many of those vs US counterparts is pretty astonishing as well.
    • RP
      Raoul P. | Founder
      20 June 2019 @ 00:28
      I try to keep things really simple in times like this. Currently, its being long bonds (maybe the best trade in the world) and long some dollar calls (still not working but not going down either)..
  • JK
    James K.
    20 June 2019 @ 03:08
    Thx Raoul....shouldn’t this scenario also be positive for gold/silver metals/miners ... ? Thx. Jim-
  • RH
    Rob H.
    20 June 2019 @ 03:39
    With gold moving higher and finally breaking long term resistance, would you advocate it as a good way to trade dollar strength? You mentioned this in your conversation with Julian since he said it was hard to play the dollar bull case. I think you said long gold short copper. I ask because it sounded like you were kicking the idea around but not ready to pull the trigger. I took Julian’s GDX trade it’s going very well, looking for places to add now. I’m new to MI, I would have to say my best investments this year. I like your writing style, clean and clear.
  • BA
    Bob A.
    20 June 2019 @ 04:44
    Sounds to me like the Euro's slide is yet another tailwind for the USD. I wonder as USD soars can gold move up with it?
  • HT
    Henry T.
    20 June 2019 @ 05:25
    Hey guys, Maybe some of you can help here. Central banks signalling of rate cuts looks to me like an admission that recession is near... I admit bonds is good. But at current level it is difficult to enter new long as the bulk of the move might have been made already. Question is: Does it mean growth stocks - NASDAQ - is nearing the high? Or does it mean they will be a blown off top first? Historically when fed signals a cut, dollar usually drop first before rising again due to looming recession. Do anyone have an opinion on this?
    • RH
      Rob H.
      20 June 2019 @ 14:59
      Well if you're a wave rider like Paul Tutor Jones, His playbook for the first rate cut is as follows. Long Stock - Initially - yet seems like a harder trade here at all-time highs. SPX QQQ etc. Long Fixed income - Front end of the curve as Rauol states Long Gold Short US Dollar - I'm watching the 200MA - We double tapped the 200ma in June and still making higher lows. All bets are off on long dollar if we break and confirm lower trade.
  • MW
    Marco W.
    20 June 2019 @ 07:20
    My 2 cents here. It is the asset market (stock market in US and property market in China, Hong Kong, Australia, Canada) that count, not the economy. Asset market related incomes such as capital gains, dividend/rental (for those not working but not counted as unemployed), stock options and so on play overwhelming role in consumption. Salary cannot keep pace with living expense for a lot of people anyway. Economic data such as personal income, unemployment, consumer confidence are distorted or driven by asset market. Since there is more than 10% drop in stock and property market in the past year, rate cuts are essential but not sufficient condition for holding up the market. In view of the relative importance of asset market in each economy, USD, CNY, HKD, AUD, CAD could be weak against others.
  • RH
    Rob H.
    20 June 2019 @ 18:01
    In times like these, I like to refer to my favorite page in Reminiscences of a Stock Operator. "It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time and began buying or selling stocks when prices were at the very level which should show the greatest profit. Their experience invariably matched mine, that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance. The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men is wall street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them they beat themselves, because though they have brains they cannot sit tight. Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market, your game is to buy and hold until you believe that the bull market is near its end. "
    • RH
      Rob H.
      21 June 2019 @ 15:02
      Hi Henry T. - In my PA, I'm long the EuroDollar options, and I took the spread trade Raoul suggested. It's a little overextended now, I will gladly add on pullbacks. Second largest position is Gold, to me, it has the best risk-reward at the current time, long multi-year base in place, and the 1350 - 1370 area resistance has been broken on huge volume. 2600 target over the next 3 year and it could get there a lot faster if the world gets scary in a hurry. FYI I also took the GDX trade Julian put out. Going great half way to his target of 30. Stay flexible, keep it simple, and watch the 20 50 200 MA. If you are longer term stick to the weekly chart, any break of the 50 Week MA on gold get out.
    • HT
      Henry T.
      20 June 2019 @ 18:34
      Rob what do you recommend for your own light of recent developments
  • LD
    Lance D.
    20 June 2019 @ 20:48
    ok so do i have this correct if the fed are thinking about rate cuts does this mean they stop with shrinking the balance sheet ?
  • CS
    C S.
    20 June 2019 @ 22:18
    Raoul, is this not worth a flash update?
    • AM
      Alonso M.
      27 June 2019 @ 05:56
      My two cents on who MI is best suited for. I don't think it's necessarily targeting the retiree or professional who just wants some savings advice. I find that the analysis and topics being discussed in MI are a few months ahead of the sell side. This is where I've derived value from the service. I think if you've been getting your macro economic analysis from the sell side, you will see significant improvement in your investment process by adding MI as a service. However if you don't use macro analysis in your investment process and are instead relying on well timed trades to recoup the cost of your subscription, that's gonna be a hit and miss process.
    • TB
      Tim B.
      22 June 2019 @ 19:04
      Edit: If MI believes that Twitter is the best way to convey "flash updates", then that at least should be made clear to the subscribers.
    • TB
      Tim B.
      22 June 2019 @ 19:01
      @Rob H., Keith J., Raoul P. I understand that sometimes a thinker of markets can explore different perspectives of a situation, or that their stance on market dynamics can change. However, as a subscriber to a paid (and pricey) service, it would feel quite unfair if "flash updates" (or the equivalent) were done via twitter. (Unless discretion was used in the wording of the tweets.) I second that getting a "flash update" via an email or text is pretty easy to do, and at this price point should be included. If on the other hand, MI believes this is the best way to convey "flast updates", then that at least should be made clear to the subscribers. My two cents.
    • JL
      J L.
      21 June 2019 @ 19:18
      Rob I do the same as you but this is not a cheap service, flash updates with an instant email alert really is really pretty basic and part of other much cheaper services. That said, from what I understand direct trading advice is not the main goal of Macro Insiders and everyone must decide if it is worth the money to them. It is odd because on one hand I feel the service is desgined for the man on the street (retirees or professionals with 500k+ who just want some savings advice), on the other hand the content often goes way beyond that in sophistication and is almost professional trader level. This in turn gives the impression that this type of info could be delivered more timely but that is not actually the goal of it all I think
    • RH
      Rob H.
      21 June 2019 @ 14:36
      I think that was his flash update. I think most if not all MI subscribers follow his twitter account, I know I do, and I also turn on mobile notifications for Raul and Julian. As this is the fastest way they can get info out to people.
    • KJ
      Keith J.
      21 June 2019 @ 12:05
      I found this a bit odd. The above article was published 2 days ahead of schedule to paying subscribers then a day later the author posts a contradictory remark on twitter. I have said before I’m not looking for trades to follow but it would help with accountability of the product if trades were tracked. It is easy to post both sides of a trade on twitter then you can take credit whatever happens. Kudos to Julian for his recent approach where explicit entry and exit levels have been posted (and worked well as things have played out).
  • JC
    Justin C.
    21 June 2019 @ 22:01
    That is going to create hugh social tensions in whole europe