Trades which are anti-consensus trades require a sentiment backdrop, and a technical setup. There was a very nice one this morning in the IWM, and using the leveraged version of it – TNA. People were weirdly overly bearish this morning, and a spring trade was in the making.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.
4 Comments
Hello Scot. I’m trying to understand if there is a negative or positive correlation between the stock market ,bond,crude oil and gold. Do you know if a negative or positive correlation exists between these four markets ?
The answer is unfortunately it’s always changing over the intermediate to longer term. And you basically go with what the correlation is at the time. Crude oil and gold is iffy most of the time to me. Right now gold and bonds are together, and stocks sort of negative to it, but that is a bit erratic even now, especially with stocks to both of them. My view of longer term remains it will be stocks and PMs and commodities massively higher together, and bonds very opposite. But trading day to day, you should go with what is working at the present time.
It’s just having a bigger picture outlook which we’re pretty confident about, and watching the technical action of the market to hone the timing. It’s why I’ve been bullish on the $ and gold at the same time for 15 months now. And the huge upthrust in the Euro on Monday now fits into that. It’s telling us a piece of info. The Euro should now generally be the laggard relative to the $, and gold will generally line up more with the $, and the Yen still. This year 2017 is a year of big change, but for instance, Dec. 2015 was the secular bottom in gold – that was the great opportunity, and a “signal” in itself also. Just keep checking back, and working hard of course.
Hello Scot. I’m trying to understand if there is a negative or positive correlation between the stock market ,bond,crude oil and gold.
Do you know if a negative or positive correlation exists between these four markets ?
The answer is unfortunately it’s always changing over the intermediate to longer term. And you basically go with what the correlation is at the time. Crude oil and gold is iffy most of the time to me. Right now gold and bonds are together, and stocks sort of negative to it, but that is a bit erratic even now, especially with stocks to both of them. My view of longer term remains it will be stocks and PMs and commodities massively higher together, and bonds very opposite. But trading day to day, you should go with what is working at the present time.
What piece of data should I watch for, to know when the correlation is about
to change ?
It’s just having a bigger picture outlook which we’re pretty confident about, and watching the technical action of the market to hone the timing. It’s why I’ve been bullish on the $ and gold at the same time for 15 months now. And the huge upthrust in the Euro on Monday now fits into that. It’s telling us a piece of info. The Euro should now generally be the laggard relative to the $, and gold will generally line up more with the $, and the Yen still. This year 2017 is a year of big change, but for instance, Dec. 2015 was the secular bottom in gold – that was the great opportunity, and a “signal” in itself also. Just keep checking back, and working hard of course.