201503.29
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Shifting Momentum

US stocks continued their recently more volatile ways this week giving up almost all the gains of last week. In fact, the S&P 500 is now basically flat for the last four months, making no headway since late November despite a series of nominal new highs along the way. As the Fed has backed away…

201503.22
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Macro Observations

Dollar strength may be over extended. Dollar action after the Fed announcement last week seemed to indicate that investors (speculators) were ready and willing to sell the greenback. Looking at the chart, one can see a potential peak in the Dollar Index earlier this month. And, our macro economic partner’s indicators are a short term extended…

201503.10
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Looking More Like Next ‘Dollar’ Problem

It is Tuesday which only means that whatever oil trading takes place today will be easily overwhelmed by whatever interpretation about inventory levels released tomorrow dominates. However, the last week has been interesting in the respect of a shift in the behavior of the futures curve for WTI. Up until then, almost all volatility was…

201502.24
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Next Step In ‘Dollars’?

I continue to believe that the Swiss National Bank’s action on January 15 opened a “release valve” of sorts inside the world of the global “dollar.” Prior to that day, heightened bearishness all throughout dollar-denominated credit dominated trading. That included funding markets, especially eurodollars. The eurodollar curve itself ignored almost everything else, including the FOMC…

201502.12
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When ‘Deflation’ Reveals ‘Inflation’

One of the curiosities of the commodity collapse since the end of last June has been how various financial derivatives have been thrown off. I’m not speaking of credit default swaps of small businesses that provide sand to fracking rigs or “products” like that, but something far more basic. The price of commodities should, you…

201502.11
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If It Was Just Oil…

The price of WTI index crude has fallen back below $50 again as inventories rise far more than expected. That has been the theme of late despite the recent retracement in crude. However, looking at WTI via the futures curve, trading habits are increasingly locking in the outer years (especially past 2016) around $65 –…

201502.08
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Investment Themes and Asset Allocation

Here is a summary of this week’s research from our strategic partner MRB. Allocation:   Trades to consider: “Short global luxury stocks versus multiline retailers.” “Short 10-year U.S. Treasuries outright.” As always, please feel free to contact me with any questions or concerns. Find out about your personal risk profile and working with Alhambra Click here to…

201502.06
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Finally Retracement

When the FOMC came out and said the economy was good enough for them to begin raising interest rates, the eurodollar funding market did the opposite of what would be expected of that situation. Not only did the market move in the “wrong” direction, it did so with a great deal of conviction. Today’s jobs…

201501.30
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Research Charts: ECB and Commodities

From strategic research partner MRB…with Alhambra’s added commentary. QE is primarily a signaling device to demonstrate policymakers’ commitment to fostering the recovery and sustaining a cohesive monetary union. The policy is implicitly designed to reduce the equity risk premium. We expect a gradual re-rating of euro area equities. A cheaper euro, itself associated with QE,…

201501.21
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Dread The New Anchor

I mentioned yesterday in looking at the behavior of gold that it seems as if the “dollar” has entered a bit of a pause in its wider destructive reality of late. Maybe that coincidence with the SNB’s dramatic alteration offers an explanation for it, with renewed focus on the European end of eurdollars, or that…