Alpha Report: Technical Levels

The set up for this week

Capital Flows

Nov 04, 2024

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As you know, everything for this week has been laid out here:

Trades

Trade: Update

Capital Flows

Nov 1

We are in a period of time where positioning is aggressively exerting its presence in markets against the macro regime. The macro regime, positioning dynamics and trades being run in connection with these have been laid out in the following reports and chat messages:

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The macro podcast explaining the bigger picture regime we are in is here:

Macro Podcast: R-Star and HOW it impacts macro

Capital Flows

Nov 3

Macro Podcast: R-Star and HOW it impacts macro

We are going to dig deeper into this idea of “R-Star” because it contextualizes WHY interest rates have varying degrees of impact on the economy and financial markets. Why did rate hikes before the GFC cause delinquencies to rise, but we aren’t seeing the same thing now? Why has the curve uninverted, and equities are still hitting all-time highs?

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FOMC and election hedges will be unwound this week:

Kamala's probability spiked back up over the last couple of days. While there isn’t crazy asymmetry, being short this in the betting market for Monday is likely a good bet, and then going flat into election night.

This is a lot of the sentiment on the street right now. A lot of people are short duration into this election:

This is the consensus for the view already laid out on AUDUSD (link): Again, way too many people are expecting a higher dollar.

The Gilts price action we saw caused a short term positioning flush and we are likely to move higher in the Pound as was already laid out (link). (I am still holding the GBPUSD laid out here: Link).

All of this brings us to several important views and technical levels for this week:

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