Great British Pound (GBP) rallied sharply against its’ major peers from October 10th to October 21st posting a gain zenith of more than 6% versus the US Dollar (USD) which poses an opportunity to sell-short the profit-taking pull-back. The prime idea to me seems to pair GBP shorts with USD, CHF and JPY. Because the trend this trade idea counters was a short-term one (less than 1-month) the duration of this trade will be limited to around 1-month as well.
GBPUSD Sell
Current Quote = 1.289
Target = 1.265 (1.8% difference from current quote)
Duration = 1-6 weeks. (Estimate 1-3 weeks)
GBPJPY Sell
Current Quote = 139.8
Target = 136 (2.7% difference from current quote)
Duration = 2-12 weeks (Estimate 2-4 weeks)
GBPCHF Sell
Current Quote = 1.275
Target = 1.255 (1.6% difference from current quote)
Duration = 1-3 weeks (Estimate 2-3 weeks)
Leverage limit for aggregate position = 2X
Estimated profit / duration if successful = 10% / 4 weeks
S&P 500 Index Outlook Update As an outlook, opening a trade based on the target is not advised - despite probability of a timely close.
Timing for bulls dominance on S&P 500 spot prices seems limited to around a month before a pullback or correction begins.
Correlated NASDAQ at resistance of all time highs which have already been tested and established.
NASDAQ (NASDAQ: QQQ)
NASDAQ spot currently $8,324 short-sell target $8,000 for a 4% difference. Intended trade duration is 1-3 months. Grid applicable to $8,500 which is 2.1% above the spot which is currently $8,326.
Natural Gas = Bullish 1-6 Months
Upside expectations = 5%-15%
Corn = Bullish 1-5 Years
Upside expectations = 10%-20%
Orange Juice = Bullish 1-5 Years
Upside expectations = 10%-20%
Overall - The US Dollar appears poised to rise modestly against commodities on average within a 1-6 month time-frame before commodities rally against the US Dollar in the longer-term (2-10 years).
Time for another position/hedge with a short duration to complement December 5th’s JPY sell positions. This one’s sell GBP for around 1% take-profit target.
GBPUSD quote 1.31 target 1.295 for a 1.1% difference. GBPAUD quote 1.918 target 1.90 for a 0.9% difference. EURGBP quote 0.843 target 0.855 for a 1.4% difference. GBPCAD quote 1.738 target 1.715 for a 1.3% difference.
Leverage rule = Max 3X equity as aggregate position size.
Looks like a good time to short Treasury Bond/Bill yields, target 10-year US Treasury Bond 1.77 from quote 1.843 with a duration of up to three months and an estimated close 3-9 weeks. The target 1.77 seeks 4.2% from the close.
JPY short hedge is near the same price it was when posted 5 days ago. My confidence in this position has grown since then.
Increase EURJPY quote 120.6 new average 120.7
Targets remain the same.
Follow up on JPY sell hedge from 13 days ago which turned out to be a complete success. I see the USDJPY has responded well bullish in the past 8 days. The AUDJPY and EURJPY bounces were starker still being exaggerated December 11th-13th.
USDJPY quote 109.6 from 108.7 for 0.8% gain closing the targeted 0.5% 5 days ago and well within this trades originally intended duration.
AUDUSD quote 75.11 from 74.3 for 1.0% gain closing the targeted 0.5% 5 days ago and well within this trades originally intended 5-20 day duration.
EURJPY quote 121.82 from 120.77 for 0.9% gain closing the targeted 0.5% 5 days ago and well within this trades originally intended 5-20 day duration.
This one hasn’t responded as expected in the past 8 days. Failed, upside possible to 3%, quote 1.92% from 8 days ago 1.843 compared to target 1.77. Abort.
High probability trade = Sell S&P 500 for 3% from today’s quotes.
The “S&P 500” (quote $3,223) made it’s 1.5% gain on highs on top of July '19 highs, I think it’s a prudent time to sell and consider the “Volatility Index” (TVIX) as well.
S&P 500 target $3,100 quote $3,223 for a 3.9% difference. Duration 1-6 weeks, estimated 2-3 weeks.
In that case VIX (Volatility Index for S&P 500) would likely jump to around $15, which it appears likely to; quote $12.78. That would probably put the TVIX (a tradeable ticker, unlike the VIX) around $65, quote $51.15.
Looks like a good time to avoid short-term GBP exposure.
Looks like XAU/USD (Gold / US Dollar) is probably going to rally to highs around $1,550 quote $1,515, 1-month lows of $1,460 were reached November 27th, 2019.
That means sell USD vs. EUR, GBP, AUD, etc, with a 1-3 month duration.
This outlook has worked out brilliantly. USD pulled back, especially against the EUR, AUD and GBP. With the way the AUDUSD is on a tear I think this USD pullback will continue for another 3% or so on average versus its’ major peers. I still consider AUDUSD, EURUSD choice instruments to sell the USD.
S&P 500 chart looks very prudent to sell target $3,000, quote $3,216 for a whopping 7.2% difference. Duration 2-8 weeks.
EURUSD performed brilliantly in the past 5 days since that was posted. Quote 1.22 from prior quote 1.11.
Now is a good time to take profits short USD, too.
January 7th 2019, 5 days since previous reply and quote above
The USD rebounded a solid 1% in the past 5 days versus most majors and now it’s time to make re-entry into this high probability opportunity to Sell-USD considering how strong the performance of Gold has been versus the US Dollar despite the rebound being complete. This also means that it’s probably a very good time to take some profits on gold positions quote $1,571 XAU/USD.
A related outlook to diversify is the Swiss Franc as a counterpart to sell with the US Dollar. Favored currencies to buy versus the Swiss Franc and US Dollar are the Australian Dollar and Euro with a relatively tight time-frame of around 3 weeks. Leverage limits would be wisely set below aggregate 5X-equity.
I anticipate there may be reason to increase Sell-USD positions by diversifying with exotic instruments such as USDNOK in approximately 2-4 weeks when prices are more favorable in the short-terms as exotic instruments rallied against the US Dollar in the past 6 months, as I mentioned was a probable scenario in other threads many months ago and it appears likely this reversal-in-trend will continue and complete.