Shorter note this morning.
Corrections are rapid and short lived (when they occur) as yesterday proved. The day’s straddle on the open was just 16 SP points and we moved 50 inside the first hour. Like many ‘fiscal stimulus era’ declines– it was short lived. The Dow futures could post the 9th straight higher close. For the record, we’ve seen 10 just three times (’13, ’17, and ’19). Interestingly, the S&P has gained roughly 200 points this month with nearly 150 from the overnight session. Commodity currencies continue to surprise with subdued trade and pullbacks buys remain in Copper, Crude, and Platinum. Fixed is a sale but after yesterday’s CPI miss, risk takers are deferring to a bit more upside. The game is increasingly isolated to Nikkei, Emg Mkts, US equities, Crude, Platinum, and Copper. Historically, the narrative driving these assets would support commodity currencies and a some other commodities.
Bitcoin is ripping faces off again–just touching 49,000 as this newsletter goes out.
Strategy and Levels
Reflation trades came under some pressure yesterday with the grain complex giving plenty of sauce following surprising stock builds in corn from the USDA report on Tuesday. The risk takers I talk to like buying corn volatility and structured longs in corn on this weakness.
Macro & Event-Trading Specialist
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