TheMacroStrategist

TheMacroStrategist

This is a snipet of a more extensive note on themacrobrief.substack.com This trend of central banks accumulating higher gold reserves also holds true on a global basis. This has huge implications for investors as foreign central banks hold lower US Treasury reserves vs higher gold reserves , it puts upwards pressure on US yields (Lower bond prices) and creates...

TheMacroStrategist

Greenlane Holdings Inc (GNLC) is a distributor of vaporization products and consumption accessories in the U.S. The stock got a huge pop on news of a merger with KushCo Holdings. However, Kaskela Law LLC announces that is investigating Greenlane Holdings to determine whether GNLC executive officers and directors violated the securities laws and/or breached...

TheMacroStrategist

A closer look at USD/CAD price action shows it’s trading within the confines of an embedded near-term descending channel formation extending off the December highs with the lower parallel further highlighting support at the 1.2883. Initial resistance now 1.3050 backed by the October low-day close at 1.3086 – both levels of interest for possible topside exhaustion...

TheMacroStrategist

The euro is higher on dollar weakness after U.S. factories extended their contraction. However, political uncertainty in Germany and a burgeoning European trade war with the U.S. is weighing on the single currency. And despite the gains of the past four days, the EUR/USD is facing a downward trajectory as the pressure increases. U.S. President Donald Trump now...

TheMacroStrategist

This is an excerpt from the Parallax Report, originally published the week of October 15. For more information, please visit @themacrostrat. "Unlike the usual relationship between volatility and equities, gold and gold volatility trade in tandem; and gold volatility (GVX) continues to grind lower since gold failed to gain momentum above $1,550 which is trending...

TheMacroStrategist

Here is an excerpt from The Macro Strategist's Parallax Report: QE Lite, You Say?, originally posted on 10.2.19: Here are the “negative yield” trade. Bitcoin and gold had been the go-to allocation as global negative yielding debt rises (and falls) with the monthly correlation exceeding .70. BTCUSD began to deteriorate ahead of gold, and this is interesting...

TheMacroStrategist

This is an excerpt from the Parallax Weekly premium report originally published July 15, 2019. "The net-positioning in coffee has surged, and the percentile metric is not suggesting it’s extremely overdone even though the one-year z-score is well above 2. The problem now is that coffee prices have declined from $116 to $106 with net-longs still in charge. There...

TheMacroStrategist

DoubleLine's Jeff Gundlach often refers to the copper/gold ratio as a proxy for U.S. yields. Although this is comprised of two commodities that tend to do well in rising inflation, it can be seen as a growth proxy as well, which in turn filters into where yields are moving. Market participants often allocate to copper when growth is trending higher and,...

TheMacroStrategist

(This was an excerpt from Parallax Lite, originally published 7.15.19) Gold has a strong inverse correlation to 5-year real yields. When real yields rise, gold prices tend to fall and vice versa. This is because money allocators chase a real rate of return and gold returns no yield. So, as real rates decline, gold becomes in favor. When real yields are negative...

TheMacroStrategist

TLT has been in my crosshairs sometime now after going neutral (not bearish) on bonds in late March. The initial push into June had effectively been front running a potential rate cut by the Fed in July. Since being one of a handful that bought bonds in August-September 2018, there was NO NEED to chase it. After going absolutely nowhere from June 1 to this week,...

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This is MACRO BRIEF: Near-Term Dollar Weakness Probable in its entirety, which was originally published for subscribers on June 4, 2019. The U.S./Chinese 10-Year rate differential has been a chart I've posted before. It's a key differential when monitoring the health of DXY strength, but the positive feedback pricing in the next move by the Fed has caused the...

TheMacroStrategist

The Macro Strategist team was largely skeptical of gold's sharp, dramatic rally in late 2018. It's not that we didn't understand why gold prices were rallying, but we significantly questioned the momentum and conviction of the move. We began analyzing the volume of the move (Yes, volume matters ), and noticed that total monthly volume was declining. Not a...

TheMacroStrategist

Copper prices are beginning to break down as a confluence of indicators support further decline. Within Monday's weekly note to subscribers, to wit: But, there is a divergence between the Chinese "green" shoots and the commodity complex. Especially, if you look at mining and base metals, they do not confirm the rally in Chinese manufacturing. Copper is...

TheMacroStrategist

This is an excerpt from MACRO BRIEF: Divergences of Belief & Expectations originally published on March 26, 2019. Trends in energy prices are likely to stick around leading into the summer, but it should be pointed out that another divergence is forming: inflation expectations and eurodollars. This particular divergence is interesting because the complete...

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This is an excerpt from MACRO BRIEF: Hong Kong Dollar Strengthens on Rate Spike originally published March 10, 2019. The short-HKD trade is nearly consensus, which reminds me of the short-yuan trade a few years ago that was largely snuffed out by the PBOC. Problem here, though, is the HKMA's attempts to draw in HKD inflows have been superficial at best....

TheMacroStrategist

This is an excerpt taking from MACRO BRIEF: Risks of Volatility Suppression published on March 2, 2019. 2019 is beginning to feel a lot like Q2-3 last year when the markets just tend to float with market participants selling volatility on declining rate of change in volume. However, we're in a precarious position as speculative net-shorts on the VIX hit an...

TheMacroStrategist

Today, we saw a broad-based crypto rally which was somewhat surprising but lets look and see where this leaves us. Despite the boost, ETHUSD is still down 87 percent from the top. The rate of change has moved from negative to postive, which is bullish; and hit the highest ROC in a month. What could have potentially pushed this move in ETH or crypto in...

TheMacroStrategist

This chart of the U.S. 10s/2s curve and the SPDR S&P Utilities Sector ETF (XLU) is interesting. A few days ago, I was reading a blurb by a well-known outlet about utilities getting "smoked" during the Q4 equity route. Like above, performance is relative to time frame. Additionally,  you have to have a deeper understanding about what XLU is and what it can...