Emerging Market Meltdown

Published on
September 7th, 2018
Topic
Trading, ETF, Emerging markets
Duration
8 minutes
Asset class
Equities

Emerging Market Meltdown

Trade Ideas ·
Featuring Chad Morganlander

Published on: September 7th, 2018 • Duration: 8 minutes • Asset Class: Equities • Topic: Trading, ETF, Emerging markets

Chad Morganlander of Washington Crossing Advisors says the recent trouble for emerging markets is just getting started. Based on what he sees ahead in the currency and international bond markets, he lays out a bearish bet on an emerging markets ETF, in this interview with Brian Price. Filmed on September 4, 2018.

Comments

  • JH
    James H.
    11 September 2018 @ 06:47
    Risk/Reward setup is terrible... $8 loss for a potential $4 gain this trade is skewed in the wrong direction. Puts would definitely be a better play
  • CM
    C M.
    11 September 2018 @ 02:52
    I agree with all his points though not a trader and don't short securities. But a play into durables, which have been doing well, 5% in gold and longer duration bonds is a bet on a slowing economy with some stagflation/deflation thrown in. Right now, the market is heavily weighed toward momentum/tech stocks, dollar rising, rates rising, short gold, short commodities, and shorting EM. So I like his positioning into dividend yielding durables and longer treasuries. I have read of a number of people moving from 6 mos to 2 years on treasuries, but Dr. Lacey Hunt on MacroVoices makes a good argument for the TLT primarliy based on the long term drag of debt.
  • EF
    Eric F.
    8 September 2018 @ 17:01
    Thumbs up for Brian Price, I think he’s really turning into a good interviewer.
  • DS
    David S.
    7 September 2018 @ 17:35
    China is trying to reduce shadow banking by replacing it within the normal banking system. It would be interesting to see estimates of changes in total debt. All though too high, the changes may be in the right direction. Of course, the orchestrated trade disruption will cause more Chinese debt. DLS
  • SS
    Steve S.
    7 September 2018 @ 13:38
    The risk/reward is terrible on this trade. Stop loss at 20% from its current levels and target price achieves a 10% gain.
    • SD
      Sebastien D.
      7 September 2018 @ 15:40
      You're right ! RV that's what you try to teach us risk 2 to make 1 ?
    • MD
      Michael D.
      8 September 2018 @ 04:31
      I guess it takes account of the volatility in EM. You could have high conviction about the $4 gain but lower conviction about the route it takes to get there. The seemingly nonsensical stop loss level allows you avoid covering too quickly due to the ST volatility. (I'm not saying I would say my SL at that level but that was the only justification that I could think of!!)
    • EF
      Eric F.
      8 September 2018 @ 17:14
      Kinda agree but I do like that this trade idea keeps coming up. Not to say crowded opinions are always good, but when it’s coming from smart people I think it’s worth noting. I note long TLT keeps coming up too. I think Julian over at MI had better numbers on this a bit earlier when it was nearer 45. Overall good idea and good video, but agree the risk / reward skewed the wrong way here.