Market On Open - The Boomer Edition - Tuesday 9 April

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.

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 wont 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.

Short- And Medium-Term Market Analysis