06Dec3:07 pmEST

They're Handcuffed; We're Not

Even as equities mostly revert to the flat-line, we are seeing some potent moves in the bond and oil markets of late. 

While the macro experts proclaim the rally in Treasuries and the selloff in oil as being evidence per se of The Fed having achieved the elusive "soft landing," I beg to differ. 

In fact, headed into 2024 my sense is that these moves will offer excellent opportunities to fade. Specifically, what we are seeing now is most likely a year-end position unwind of folks who were heavily betting on higher rates and higher oil. 

And while higher rates certainly was my best view this year, the folks who piled on over the last month are getting the business now. 

That said, as previously noted here and with Members, I am patiently waiting in the weeds for another short entry into Treasuries (and therefore betting on higher rates, once again) into next year. As for oil, I also suspect we will see a good long entry in due time, possibly as soon as after the FOMC next week. 

Overall, hedge funds who may be handcuffed here with leverage and oversized positions are likely unwinding, which probably accounts for more of these moves than the market declaring a decisive soft landing/Fed victory. 

As slow as the market has been, my excitement for next year and its plentiful opportunities is beginning to grow. 

The Big Picture is Still The... Things Are Happening in Braz...


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