Trade Journal - A Few Potential Trades to Consider

Apr 20, 2017
2 min read

As far as the general US stock market is concerned, we are in a "sleepy correction". It just feels heavy and unsatisfying. A few days (weeks) of panic selling are what we are looking for to get excited about the buying opportunities.

Looking at our various "panic" measures, it feels like we are getting close to a buying opportunity but the lack of panic isn't convincing. We're still looking for the next stage of violent selling to start buying aggressively.

On metals - We're looking for the steel industry to find a base here and a return of upward momentum. We own Steel Dynamics in the portfolio and are looking at other opportunities in the sector once things settle.

Copper has broken down from its symmetrical triangle pattern and looks to be heading to $2.45. Further deterioration in the economic outlook as well as President Trump's ability to push through his agenda will impact copper prices from its coming support, in our opinion. If we reach support and bullish momentum returns...we'd go long the metal (JJC).

Gold has broken out but should be pulling back a bit. Increased geo-political uncertainty (North Korea - China and French elections) have supported gold. There are decreasing expectations of an overly hawkish Fed that could also be pushing gold higher. Tapping the brakes on monetary policy and unremarkable fiscal policy will add support. If the copper trade doesn't come to fruition we believe the gold trade will.

On FX - Looking for potential set-ups in the British Pound, Canadian Dollar, and the US Dollar. Nothing to trade yet but keeping a close eye out for opportunity.