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Samantha’s Live Trading Room Summary - 2/5/25
“Suspended Disbelief” - that’s what I am calling this market. From the reactions to the MANY headlines coming from Trump, the on-off tariffs, or recent DOGE surprises, market is very much suspended from making a directional move for more than a day or two. Case in point: we are at the same place in indices for three months. Lots of chop. Lots of noise. Very few believable + durable signals.
Treasury Secretary Bessent kicked the can today - WE EXPECT TO KEEP COUPON AND FRN AUCTION SIZES STEADY FOR AT LEAST THE NEXT SEVERAL QUARTERS. So we got that near-term ‘event risk’ out of the way, BUT if you want to see the big picture MACRO EVENT RISK, then CLUB/EDGE clients need to go read what I posted under #macro-to-micro-support channel in slack for a potential playbook on how to trade Fed, Treasury, Trade & Economic policy changes. It’s worth a read.
Speaking of good reads, remember last month when I posted: YEN CARRY TRADE UNWIND: PART 2. It’s time to brush up. No news is good news on QRA (Bessent), but falling US dollar with yields with oil is not good for the yen carry trade.
Speaking of a market in suspended disbelief… NFP Friday is expected to show an update to a slowdown that has not been reflected in past data. Many have expected the numbers offered up weren’t real, and the labor market was much weaker than thought. As I have warned many times, once we gets/stay above 267K jobless claims and 4.5% unemployment rate, recession risk will be pulled forward and equity volatility will appear. With that, are yields falling in anticipation?
Speaking of macro trades, yday I posted: “DXY - If I’m reading these macro tea leaves correctly, USD is about to fall further as euro, cad, yen, yuan rise.” Yup, working, as well as my rec’d macro trades since JAN 14th: higher 10Y bonds + yen with Gold rec’d a month before that + silver last week. Now, with NFP due Friday, I wonder if all of the above are tested. Meaning, dollar & yields bounce to test recent bond, yen, metal bulls, as equities fall. Otherwise, bonds and yen are about to get really busy if this inverse head & shoulders pattern confirms.
