Victor Adair

August 31 Trading Desk Notes: victoradair.ca. The CAD fell to 2-year lows in early August as speculators built a massive net short position. But the CAD rallied back ~2.65 cents throughout August, forcing the specs to slash their short positions by ~50%.

August 31 Trading Desk Notes: victoradair.ca. Gold closed August at a record monthly high as Comex futures closed higher for 7 consecutive months for the first time since 1975. Gold closed higher for 10 of the last 11 months, up ~$730 (~40%) from the October 2023 lows.

August 31 Trading Desk Notes: victoradair.ca. Robust big-cap tech provided most of the S&P's gains from April to July, but capital is now rotating away from tech as the S&P and DJIA hit all-time highs this week despite the tech-heavy NAZ being down ~7% from its highs.

August 10 Trading Desk Notes: victoradair.ca. Net short spec positioning in CAD soared the past 4 months to all-time highs in late July. My rough guess is that the average short price is ~73 cents. Will the weekly key reversal up from 2-year lows inspire short covering?

August 10 Trading Desk Notes: victoradair.ca. The Euro/Swiss Franc spread (my favourite barometer of European stress) fell to all-time lows on "stressed out" Monday but rebounded to close higher on the week.

Aug 10 Trading Desk Notes: victoradair.ca. The Yen hit 8-month highs on Monday, up ~14% from July’s 35-year lows. In early July, speculators held a massive net short position. By August 6, speculators were flat, having covered that short position as the Yen rallied.

August 3 Trading Desk Notes: victoradair.ca. My favourite barometer of “European stress,” the Euro/Swiss spread, turned decisively to “rising stress” on May 28 (a key turn date), bounced in late June, but has signalled even greater stress over the last three weeks.

August 3 Trading Desk Notes: victoradair.ca. 10-year Treasury futures had their biggest weekly gain in over two years as the Fed acknowledged that in terms of their "dual mandate," “full employment” is becoming more critical as “price stability" becomes less of an issue

August 3 Trading Desk Notes: victoradair.ca. Nikkei futures are down ~18% from July 11 record highs, with more than half of that decline coming on Thursday and Friday. The Nikkei had its lowest weekly close since January. The Yen is up ~10% from 35-year lows on July 11.

July 27 Trading Desk Notes: victoradair.ca. The CAD fell for 11 of the last 12 trading days after reversing from a spike high on US CPI. Open interest is at record highs, double the last five year's average. Net short speculative positioning is massive.

July 27 Trading Desk Notes: victoradair.ca. We may have seen a Key Turn Date (KTD) in mid-July when several markets reversed course on or around the same date. A KTD signals a (profound) change in market sentiment, psychology, and positioning.

July 27 Trading Desk Notes: victoradair.ca. Reversion to the mean continues across key markets: stocks, Yen, gold, and copper. The Japanese authorities executed a "master class" on intervention by igniting a massive wave of Yen short-covering - likely more to come.

July 20 Trading Desk Notes: victoradair.ca. The Yen rallied from 34-year lows on intervention last week. Speculative net short positioning is near 20-year highs, and the interest rate dif supports positioning. But "Trump" may mean that the 12-year Yen decline is over.

July 20 Trading Desk Notes: victoradair.ca. Gold hit a record high on Wednesday and reversed. Open interest increased ~35% from late June to the highest level since the Ukraine invasion. Spec net long positioning is at a 40-month high. Gold could tumble from here.

July 20 Trading Desk Notes: victoradair.ca. It looks like we had a Key Turn Date in risk assets this week when several markets (stocks, gold, copper, Yen, Pound), each with massive speculative positioning, reversed course. I expect the reversals to extend.

July 13 Trading Desk Notes: victoradair.ca. Japanese authorities intervened again this week with the Yen at fresh 34-year lows. Their timing was good with the USD on the “backfoot” following the CPI report, but they're fighting a huge interest rate differential.

July 13 Trading Desk Notes: victoradair.ca. Gold rallied to a two-month high on CPI, up ~$100 from last week’s lows. Open interest is at a two-year high, as is net-long speculative positioning. Speculative net-long positioning in silver is at a 4-year high.

July 13 Trading Desk Notes: victoradair.ca. Do you believe in mean reversion? What does it take to trigger a correction (or more) in these soaring stock indices? This week's intra-day price action around all-time highs may have caught the attention of veteran traders.

July 6 Trading Desk Notes: victoradair.ca. With stock indices relentlessly higher, expectations that inflation will fall and the Fed will cut rates, and “no worries” that geopolitical stress will reach American shores, there is a high level of complacency across markets.

July 6 Trading Desk Notes:victoradair.ca. Big-cap tech leaves the rest of the market behind. The NAZ, powered by big-cap tech, closed green every trading day this week; it is up ~21% YTD. The DJIA is up ~4.5% YTD, and the Russell small-cap index is slightly negative YTD.