Friday Chart Book

November 15, 2024

Markets have taken off some steam after last week’s fast acceleration. This is natural, as we all need to digest what’s next. A few markets have been flagged in our charts mid-week, including the rollover and short in Gold. FX has, so far, been the exception in which the USD continues its ascent. Equities see a few reversal signals, but again, that’s from very lofty levels, so some consolidation needs to occur. This is a great time to reflect and plan ahead. Nothing with banking a few profits, either.

Looking at the STIR (SOFR) table would indeed indicate that we have come a long way, and as we look at those futures, we now have to consider a few options. One is whether we think that the Fed will cut from current effective rates of 4.58% and add another 3-4 cuts, which is currently priced, or whether they will indeed start thinking about an extended pause. What would a pause look like? I would expect, even under such a scenario, to see an easing bias as they don’t want to inflict too much pain.

So let’s say, for argument’s sake, they cut another 2 times between December and the March meeting. This would get effective rates to 4.06%. I would expect red contracts (those colour-coded above from Sep 25 to Jun 26) to be still trading at current levels or lower in yield (higher in price). As I am looking at this pricing, I can’t help but think that this is probably an attractive buy if you believe that the recent tightening in financial conditions through rates should weigh on growth going forward. Trump is only going to be in office properly in February, so any effects of his policies will not be felt until the middle or end of 2025. Of course, this all goes against the current narrative and momentum, but as we prepare for 2025, this is worth thinking about and potentially preparing for. Alternatively, I’m thinking about what a hiking scenario would look like. This is not priced at all, and given the Fed’s tolerance for above-target inflation, it is possibly still too far to imagine. Regardless, we do not want to rule out such a possibility.

Another potential trade was presented by Macro D this week, where he untangles his bullish call for the Brazilian Real (BRL). You can access it below.

By now, most of you will be familiar with the models and their signals. If not, please study the guide I have published. I would highly recommend you go through these notes and guides if you are new to the pack. I am also in the process of making an intra-day model available soon. It’s in the works.

Further below, the full book of 250+ charts covers the whole asset spectrum from equities, bonds, commodities, FX, and Crypto to give you the most extensive view. On average, it will generally provide a good 5-10 set-ups on a weekly basis.

This is a reminder that you can now also use my models in TradingView scripts, which I made available for subscribers to use on their charts. This is not for free and incurs an additional cost. If you are interested, ping me an email with your TV username. Note that only paying subscribers will be granted access. No exceptions. It’s taking time to set everyone up so I will limit the amount of users going forward.

Let’s also read my friend Macro D’s recent thoughts on markets before engaging our scanning eyes across the multitude of charts that I have updated for you below.