Attack The Week (ATW)

October 23, 2023

Monday Thoughts

Every Saturday morning, I go to Pilates; it’s a ritual now. Both my wife and attend together to test our cores and flexibility for an hour. At first, I was sceptical. I didn’t feel the benefits, so I quit after only a few months. A little back scare at a wedding last year got me back in it (nice pun, I know). I still sometimes roll my eyes, especially when there are a few too many drinks involved on Friday nights. Luckily, the instructor got a good eye to see whether I was suffering from a hangover or not.

Joseph Pilates, a German-born fitness enthusiast, created the very popular class with his name. Facing health challenges as a child, Joseph was motivated to improve his physical condition, leading him to develop "Contrology," the precursor to Pilates, during World War I in England. Using springs from hospital beds, he devised resistance-based exercises, a foundation for today's Pilates equipment. Relocating to the U.S. in the 1920s, he and his wife, Clara, opened a studio in New York, attracting dancers with the method's unique benefits.

Now, I am not a dancer, but I can tell that a bit of stretching and training your core comes with massive benefits. My wife’s perforated disk never flared up again, and we hope it remains so. Being stuck in your chair for too many hours daily is not the best thing for your well-being. Stretching all elements in your body also releases some good mental energy, and I usually feel refreshed and ready for what’s to come. I can highly recommend it. Your body will thank you at a later point in life. At least, that’s my bet. Movement is a healer, so I have been told.

Source: Dall-e

Movements in financial markets as of late are taking many by surprise. It’s maybe the lack of stretching, which has caused our weak market structure and left it possibly in a frailer state. Any system needs to be stretched and tested to regain strength at its core.

Hormesis is a biological phenomenon wherein a beneficial effect (improved health, stress tolerance, growth, or longevity) results from exposure to low doses of an agent that is otherwise toxic or lethal when given at higher doses. The read-through to financial markets is that adaptability and resilience become more important for your strategy in those times. Experience is not linear, my friends, be grateful you are in these times where you can learn. This will give you plenty of strength to get better. This work must be done, so enjoy it as long as it lasts.

Let’s look at some recent Treasury dynamics and four-standard deviation moves, as well as the peculiar timing of rate moves during US hours. Copper/Gold ratio vs. US 10s highlights the recent divergence between Treasuries and Gold.

Then, let’s focus on what’s to come during the week and highlight the most important charts that should feature on anyone’s radar.