Hello everyone,
Here is the message I shared yesterday (Monday 7/22) with paid Subscribers: (link)
Please reference my view on equities here:
Alpha Report: ES Trade, Interest Rates, and Positioning Unwind
Hello everyone, In todayโs world, everyone has access to the same data and information. In the past, there were more limitations around getting information or paying for data. Ever since this has changed, the highest premium in markets is given to those who can INTERPRET the data correctly.
These levels in ES are very dynamic and based on an intraday mean reversion model I run through the Globex session. Notice that we came right up to this level intraday in ES:
We just gapped down at the futures open and are likely to hit 5,540 this week. If you want to dig into HOW to model these intraday dynamics, check out the primer I wrote on this:
The Research HUB: Intraday Trading Primer
Hey everyone, This article is going to be an educational primer on intraday trading. You will notice that I have written primers on the S&P500 (link), bonds (link), and FX (link), BEFORE this one. This is intentional because understanding the big picture is a prerequisite.
Extracting returns from this type of edge is incredibly difficult and you need to be very precise.
Donโt miss the forest for the trees though. We remain in a Goldilocks regime where equities are skewed to the upside. We are in a positioning unwind and when my ES strategy triggers a long, I will publish it for paid subscribers. Seeing these tensions in real time is incredibly helpful though.
Notice that the Nikkei was down during the Asia session overnight and then as we moved into the US session this morning, NQ was down with the Russell up. This is the rotation I mentioned in the report (link).
We are seeing implied correlation unwind marginally and this is unlikely to be over. Implied correlation needs to be mapped against broad market breadth.
I broke down how implied correlation works in the equity report:
Equity Report: Where is the S&P500 going?
โWhere you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt.โ Paul Tudor Jones Since it was published, the long ES trade has provided considerable returns. Hedge fund managers and market observers continue to underestimate the right tail risk in markets and misunderstand how to measure theโฆ
Fundamentally, we are managing the position risk and SPEED of rate cuts by the Fed for trading equities right now. This is because real growth is still positive.
Even in a bull market, there are always risks to manage. No matter how you take risks in life, always remain in a constant state of adaptation.
โWhere you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt.โ
Paul Tudor Jones