Motivated by Your last interview on wealthion I started studying your blog to build my risk management skills. Thank you so much for Your generosity to share this knowledge with small amount investors like me! Highly apprechiated!
Is there any book You would recommend on risk management?
Nice post. Thank you very much for writing it. I know I am writing a couple of months later, though the ideas in this post are still trend, but, what are the probabilities of the ECB succeeding and preserving its reputation when the inflation we are observing Western Europe is caused mainly by energy prices and not by an overheated economy? Does it really make any sense to make credit more expensive in highly levered European economies?
Hi Alf! I was wondering if you had any strong opinion about the direction of the longer term maturity treasury yields both in terms of fundamental and technical factors. From fundamental perspective if we do get the last required signal (decelerating inflation), would we finally be seeing the first signs in lower yields? For me its still unclear who the buyers would be (fx hedging too expensive for foreigners considering Fed is in aggressive hiking mode, banks already have loaded balance sheets with treasuries). Will this lead to a new price discovery point at higher yields?
Alfonso - the whole world is going to divest itself from US-EURO and its allies. It's still difficult to discern who fired the first shot; Russia or US, but one or both want to divest from the other. The US wants to avoid paying on its debt; the Russia-China Axis powers do not believe the US is capable of paying its debt.
I'll pester you more about these geopolitical ideas, but the EU is at much greater risk than just financial. The West (US-EURO zone) is incapable of supporting itself at this time. And the world is fastly losing faith that the US-EURO zone is worth the paper the eurodollar is printed on.
Hey ALf, just wanted to thank you for all your input via the Compass, podcasts, etc. There is a tremendous amount of noise out there in markets land and it can be difficult to parse through it all. I've found your content to be some of the most helpful to me on my trading journey. Thanks again.
Alf, great work as always! I learned so much from your easy-to-understand macro views, I basically read/listen every content on every platform that you release...my #1 go for macro explanations, keep the good work :)...what trading platform do you use? Is data that you use in VAMD calculations publicly available (if so what sites/publications do you track?) or are more or less Bloomberg`s data? I assume the calculations are “business secret” but would highly appreciate if you would show how your thinking works 😊
Hi Alf - listened to you on wealthion and on Hugh’s show! Firstly thank you for being so generous with your knowledge, i continue to learn from you. One question - how far away are you from your ETF - i know its not the best way but for me i would much rather entrust funds to an ETF model engineered by you!!
The "aha" moment you helped me have this week was that I can't assess whether or not the risk premium I am seeking from a particular position is worthwhile if I don't actually appreciate all the sources of risk I am adopting as well as the probability of those risks manifesting themselves and to what degree. Should be obvious, I know. I've been too narrowly focused on price.
I normally trade on price action alone and let my stops act as a filter (what do I know about the future?), but I'm going to go through my trade history and do a macro condition risk analysis. I'm starting to think a probabilistic filter that either vetoes some trades or alters the position size might be in order. It will be interesting to see whether or not such an approach would also keep me out of key winning trades. Looks like I have a project this week. I know I'm also reinventing the wheel as there are no shortage of managed futures shops that apply a macro filter to a trend following model.
"And they succeeded in their mission: 18 months later, inflation was back around 2%."
How do you think about the “new instruments” the ecb has insinuated pulling out to stop “fragmentation”? Seems like they will try to ring fence bro’s. Thoughts?
huge fan of your macro stuff Alf. I noticed that you keep shorting SPY but closed Russell 2000 short positions, could you share a little bit more insight about this. if big caps are going to come down in next a few months, should not Russell 2000 go down more? thanks for your time.
Motivated by Your last interview on wealthion I started studying your blog to build my risk management skills. Thank you so much for Your generosity to share this knowledge with small amount investors like me! Highly apprechiated!
Is there any book You would recommend on risk management?
Shouldn't you short SPY trade be closed by now? SPX closed below 3960 a few times in May.
Hi Alfonso,
Nice post. Thank you very much for writing it. I know I am writing a couple of months later, though the ideas in this post are still trend, but, what are the probabilities of the ECB succeeding and preserving its reputation when the inflation we are observing Western Europe is caused mainly by energy prices and not by an overheated economy? Does it really make any sense to make credit more expensive in highly levered European economies?
Thank you very much
Best regards
Javier
Hi Alf! I was wondering if you had any strong opinion about the direction of the longer term maturity treasury yields both in terms of fundamental and technical factors. From fundamental perspective if we do get the last required signal (decelerating inflation), would we finally be seeing the first signs in lower yields? For me its still unclear who the buyers would be (fx hedging too expensive for foreigners considering Fed is in aggressive hiking mode, banks already have loaded balance sheets with treasuries). Will this lead to a new price discovery point at higher yields?
Excellent analysis!
Alfonso - the whole world is going to divest itself from US-EURO and its allies. It's still difficult to discern who fired the first shot; Russia or US, but one or both want to divest from the other. The US wants to avoid paying on its debt; the Russia-China Axis powers do not believe the US is capable of paying its debt.
I'll pester you more about these geopolitical ideas, but the EU is at much greater risk than just financial. The West (US-EURO zone) is incapable of supporting itself at this time. And the world is fastly losing faith that the US-EURO zone is worth the paper the eurodollar is printed on.
Hey ALf, just wanted to thank you for all your input via the Compass, podcasts, etc. There is a tremendous amount of noise out there in markets land and it can be difficult to parse through it all. I've found your content to be some of the most helpful to me on my trading journey. Thanks again.
Alf, great work as always! I learned so much from your easy-to-understand macro views, I basically read/listen every content on every platform that you release...my #1 go for macro explanations, keep the good work :)...what trading platform do you use? Is data that you use in VAMD calculations publicly available (if so what sites/publications do you track?) or are more or less Bloomberg`s data? I assume the calculations are “business secret” but would highly appreciate if you would show how your thinking works 😊
Thanks!
Hi Alf - listened to you on wealthion and on Hugh’s show! Firstly thank you for being so generous with your knowledge, i continue to learn from you. One question - how far away are you from your ETF - i know its not the best way but for me i would much rather entrust funds to an ETF model engineered by you!!
Thank you - this has been very helpful. Curious why not shorts on non-energy EU ETFs (eg EZU puts)?
Gracias por compartir tanto conocimiento. Profesionalidad y sinceridad al detalle.
The "aha" moment you helped me have this week was that I can't assess whether or not the risk premium I am seeking from a particular position is worthwhile if I don't actually appreciate all the sources of risk I am adopting as well as the probability of those risks manifesting themselves and to what degree. Should be obvious, I know. I've been too narrowly focused on price.
I normally trade on price action alone and let my stops act as a filter (what do I know about the future?), but I'm going to go through my trade history and do a macro condition risk analysis. I'm starting to think a probabilistic filter that either vetoes some trades or alters the position size might be in order. It will be interesting to see whether or not such an approach would also keep me out of key winning trades. Looks like I have a project this week. I know I'm also reinventing the wheel as there are no shortage of managed futures shops that apply a macro filter to a trend following model.
"And they succeeded in their mission: 18 months later, inflation was back around 2%."
18 months later (!)
How do you think about the “new instruments” the ecb has insinuated pulling out to stop “fragmentation”? Seems like they will try to ring fence bro’s. Thoughts?
huge fan of your macro stuff Alf. I noticed that you keep shorting SPY but closed Russell 2000 short positions, could you share a little bit more insight about this. if big caps are going to come down in next a few months, should not Russell 2000 go down more? thanks for your time.
Complesso, ma stimolante
What is the probability of ending year above 1% ECB rate in your opinion?