Another week and we are already lock limit down in Index futures early Sunday evening as the Fed has made a surprise rate cut to the levels of the 2008 Financial Crisis, while also announcing a Bond purchasing program in an effort to boost the ever grim economic outlook resulting from the Covid19 pandemic.
While this changes the plan a bit this week (what is left for the Fed to do on FOMC day on Wednesday now?), the underlying structure of the auction we see in the profile has not.
Jed has put together an outlook for the week and it’s worth 18min of viewing as we prepare for the week. He walks us through the S&P, Crude, Bonds, and Ags (Soybeans & Corn) to get a sense for where opportunity is brewing.
This is an overview we send to our team each week and this week we felt it would help the broader trading community if we made this available to anyone.
A number of you will chose to not trade this week and we affirm that. My trading career was born during the financial crisis and I’ve been waiting for days like this. There is lots of opportunity, but significant and potentially career ending risk.
- What is the opportunity?
- What am I willing to risk for this opportunity?
- What auction behavior would tell me I made the right decision to get into this trade?
- What auction behavior would tell me that the auction is not behaving as I expected and I should perhaps exit the trade early?
Josh, Jed & the TWP team