Market On Open - The Boomer Edition - Tuesday 9 April
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Back To The Future
by Alex King
So, today we start coverage of some old-line stuff, being oil and bonds. Don't lick away. If you're an Inner Circle subscriber, start by watching yesterday's webinar (here) where we talk through the logic of using relatively uncorrelated instruments in oil and bonds as a way to hedge and overhedge equity ETF positions. This is working well for me personally so far, and it's the context in which I want to start doing more work in these instruments.
From today we add the following oil instruments to our Market On Open daily note:
- WTI futures - this is the basis for:
- USO (unlevered) and UCO (2x levered) oil ETFs
We'll chart USO as the medium term indicator and WTI as the short term. For trading alerts in Inner Circle Slack Chat, our instruments of choice are UCO (2x long) and SCO (2x short).
As regards US federal bonds, we already chart the US 10-year yield; we'll add to that:
- TLT (a BlackRock ETF which tracks a mix of US Treasury bonds which are >20yrs to maturity).
- TMF (3x long an index of >20yr to maturity US Treasury bonds)
For trading alerts in Inner Circle Slack Chat, our instruments of choice are TMF (above) and TMV (the inverse of TMF).
Important Note: This is not intended to be expert-level bond or oil trading ideas. Here we are simply applying the technical analysis methods we employ elsewhere to these new instruments. We won’t be spending time focused on the underlying fundamentals of the oil or bond markets. The analysis will be purely technical, and the purpose is simply to add to the number of hedged pair ETFs that we can cover in this service. As always, nothing we publish is intended as investment advice and should not be considered investment advice.
As always, this is for our paid tiers here. If you’ve yet to sign up? You can do so from the links below. Choose “Market Insight” if you want our investment notes only; choose “Inner Circle” if you want investment notes, real-time trade alerts, live weekly webinars and recorded videos, and of course a live 24x7 investor community chat service. Monthly and annual subscriptions available - right here.