@peterknightadvisor.com, Peter Knight Advisor,Automated Trading Accounts, Futures,

3 Month Rate Directional (3MD)

Trading procedure
EMA9 above the EMA18 = Long
EMA9 below the EMA18 = Short
That’s it, track it here
What we’re trading
Interest rate educational videos & links

What’s its done & to track it forward GEZ21 3 year chart, weekly & opinion

Date	Position	Price	Point + or –	Net Gain or loss
24-Aug-15	long	97.14
07-Nov-16	short	98.06	0.92	$18,000.00
09-Oct-17	long	97.71	0.35	$3,750.00
06-Nov-17	short	97.62	-0.09	-$2,750.00
26-Nov-18	long	96.98	0.64	$15,500.00
31-Jul-18	Open Equity	98.30	1.32	$32,500.00
Net Profit of Loss				$67,000.00
Start Balance				$25,000.00
Net Liquidating Value				$92,000.00
Net Gain or Loss				268.00%

Performance is based on trading one $25,000 unit, never adding units. This program uses leverage, has a realistic risk factor of $12,500 USD per unit, if you are not in a position to comfortably assume this risk you should not participate in this program, see Risk Disclosure & Defining Overall Risk For Your Account,

1) Analysis for outright long or short positions

3 month rates (GEU19) September 2019

1.01) Today’s technical opinion
1.02) 2 day chart, 15 minute data
1.03) 3 day chart, 30 minute
1.04) 5 day chart, 60 minute data
1.05) 10 day chart, 120 minute
1.06) 3 month chart, daily
1.07) 6 month chart, daily
1.08) 9 month chart, daily
1.09) 1 year chart, weekly
1.10) 3 year chart, weekly
1.11) 7 year chart, monthly
1.12) 15 year chart, monthly
1.13) 1983 – current chart
1.14) Ranges & price performance
1.15) Support & resistance
1.16) Barchart quotes, all deliveries
1.17) Barchart options quotes
1.18) Exchange = CME
1.19) Contract Specifications each 0.01 = 25.00 USD
1.20)Exchange Margin Requirement
1.21) US Rate Curve
1.22) 30 Year chart & historical data 3 Month Rate
1.23) Eurodollar Interest Rate Futures Video

3 month rates (GEZ19) December 2019

1.24) Today’s technical opinion
1.25) 2 day chart, 15 minute data
1.26) 3 day chart, 30 minute
1.27) 5 day chart, 60 minute data
1.28) 10 day chart, 120 minute
1.29) 3 month chart, daily
1.30) 6 month chart, daily
1.31) 9 month chart, daily
1.32) 1 year chart, weekly
1.33) 3 year chart, weekly
1.34) 7 year chart, monthly
1.35) 15 year chart, monthly
1.36) 1983 – current chart
1.37) Ranges & price performance
1.38) Support & resistance

3 month rates (GEZ20) December 2020

1.39) Today’s technical opinion
1.40) 2 day chart, 15 minute data
1.41) 3 day chart, 30 minute
1.42) 5 day chart, 60 minute data
1.43) 10 day chart, 120 minute
1.44) 3 month chart, daily
1.45) 6 month chart, daily
1.46) 9 month chart, daily
1.47) 1 year chart, weekly
1.48) 3 year chart, weekly
1.49) 7 year chart, monthly
1.50) 15 year chart, monthly
1.51) 1983 – current chart
1.52) Ranges & price performance
1.53) Support & resistance

3 month rates (GEZ21) December 2021

1.54) Today’s technical opinion
1.55) 2 day chart, 15 minute data
1.56) 3 day chart, 30 minute
1.57) 5 day chart, 60 minute data
1.58) 10 day chart, 120 minute
1.59) 3 month chart, daily
1.60) 6 month chart, daily
1.61) 9 month chart, daily
1.62) 1 year chart, weekly
1.63) 3 year chart, weekly
1.64) 7 year chart, monthly
1.65) 15 year chart, monthly
1.66) 1983 – current chart
1.67) Ranges & price performance
1.68) Support & resistance

3 month rates (GEZ22) December 2022

3 month rates (GEZ23) December 2023

3 month rates (GEZ24) December 2024

2) The Market’s expected increase or decrease in rates

What 17+ trillion in face value of open derivatives positions is telling us about where rates will be and when through December 2027, to the 0.005%.

If you’d like to learn how we’re trading these message me with a date, time & contact number and I’ll walk you through it, the indicators I’m using are already dropped into the charts.

How to read these charts

Between September 2019 & December 2019

Between September 2019 & December 2020

Between September 2019 & December 2021

Between September 2019 & December 2022

Between September 2019 & December 2023

Between September 2019 & December 2024

Between September 2019 & December 2025

Between September 2019 & December 2026

Between September 2019 & December 2027

2.87) September 2019 to December 2027 priced in change (3 day, 15 minute)
2.88) September 2019 to December 2027 (10 day, 30 minute)
2.89) September 2019 to December 2027 (10 day, 60 minute)
2.90) September 2019 to December 2027 (10 day, 120 minute)
2.91) September 2019 to December 2027 (1 month, 120 minute)
2.92) September 2019 to December 2027 (2 month, daily)
2.93) September 2019 to December 2027 (6 month, daily)
2.94) September 2019 opinion
2.95) December 2027 opinion

Between September 2019 & December 2023

2.96) September 2019 to December 2028 priced in change (3 day, 15 minute)
2.97) September 2019 to December 2028 (10 day, 30 minute)
2.98) September 2019 to December 2028 (10 day, 60 minute)
2.99) September 2019 to December 2028 (10 day, 120 minute)
2.100) September 2019 to December 2028 (1 month, 120 minute)
2.101) September 2019 to December 2028 (2 month, daily)
2.102) September 2019 to December 2028 (6 month, daily)
2.103) September 2019 opinion
2.104) December 2028 opinion

Between December 2019 & December 2022

Between December 2019 & December 2023

Between December 2020 through December 2022

If you would like me to walk you through the specifics send a message with a date and review time or contact me.

3) Review links

3.01) Today’s probability for a rate hike at the next Fed meeting
3.02) Interest rate 3 month to 30 year curve
3.03) Fed Meetings and Press Conferences
3.04) Understanding the FOMC Report
3.05) Interest Rate Analysis page

4) Interest Rate Futures/Options Educational Videos and Resources

4.01) Futures Educational Videos (33)
4.02) Futures Options Educational Videos (34)

4.03) Eurodollar Interest Rate Futures Contracts
4.04) Eurodollar Futures Pricing And The Forward Rate Market
4.05) How to Trade Eurodollar Spreads
4.06) Fed Fund Futures contracts
4.07) Understanding IMM Price and Date
4.08) Understanding Eurodollar Strips
4.09) What is the Eurodollar Settlement Process?
4.10) Treasury Futures Contracts
4.11) Calculating U.S. Treasury Pricing
4.12) Treasury Intermarket Spreads – The Yield Curve
4.13) Trading the U.S. Treasury Curve: Two versus Ten
4.14) How Can You Measure Risk in Treasuries?
4.15) Treasuries Hedging and Risk Management
4.16) The Basics of Treasuries Basis
4.17) Treasuries Delivery Process
4.18) The Importance of Basis Point Value (BPV)
4.19) Understanding Packs and Bundles
4.20) Understanding Convexity Bias
4.21) Understanding the FOMC Report
4.22) Get to know Treasuries Cheapest To Deliver (CTD)
4.23) Trading the Link Between USD/JPY and U.S. Treasuries

5) Previous Rate Reports and Articles 2015 – 2018

5.01) June 2018 Update Trading Rates Higher
5.02) US Economy by the numbers 2000 – 2018 4 June 2018
5.03) Trading Rates Higher & Fed Expectations 28 November 2017
5.04) Trading the Fed Funds rate higher 13 March 2017
5.05) Trade update 11 August 2016 through 20 January 2017
5.06) Trading Rates Higher & Fed Expectations 20 January 2017
5.07) Update Seeking Alpha 13 January 2017
5.08) Market Versus Fed For Rates 16 September 2016
5.09) Market Versus Fed Expectations December 2019 4 Sep. 2016
5.10) Update on Seeking Alpha 5 September 2016
5.11) Who’s right the market or the Fed 31 May 2016
5.12) Original positions published on Seeking Alpha 5 Nov. 2015
5.13) Countdown to Higher Rates 9 October 2015
5.14) Trading 3 Month Rates & Fed Expectations 24 Sep. 2015
5.15) What I See On The Horizon 6 August 2015
5.16) Hedging Treasury Risk 3 August 2015
5.17) The Math On Why U.S. Inflation Is “contained” 22 July 2015
5.18) Trading the Fed Funds Rate Higher 23 July 2015
5.19) Trading Rates Higher & Fed Expectations 9 June 2015
5.20) Trading 3 Month Rates & Fed Expectations 27 April 2015
5.21) Trading Rates Higher Using Cost Averaging 24 March 2015
5.22) Market versus Fed expectations 23 March 2015

6) Fed Funds Risk Reward Spreadsheets

6.01) 3 Month Rates Mar., Jun. Dec. Fed Funds Mar. hedge
6.02) Fed Funds December 2016
6.03) Fed Funds March 2016 S 99.74 (no hedge)
6.04) Fed Funds December 2016 S 99.46 (no hedge) 100K
6.05) Fed Funds December 2016 S 99.46 (no hedge) 10K
6.06) Trading 3 month rates higher through December 2016
6.07) July 2015 25k no hedge
6.08) July 2015 99.83 25K cost average hedge
6.09) July 2015 99.82 25K 87.50 hedge
6.10) July 2015 10K 99.81/99.75 hedge
6.11) Sep 2015 25k cost average hedge
6.12) Oct 2015 25K cost average hedge
6.13) Dec 2015 25K cost average hedge

7) 3 Month Deposit Spreadsheets

7.01) 3 Month Dec 2017 S 99.70 (no hedge)
7.02) 3 Month put weighted vol spread Dec 2017
7.03) 3 Month vol spread Dec 2017
7.04) 3 Month vol bear spread no hedge Dec 2017
7.05) 3 Month GEH-M-Z-201616 Fed Funds ZQ-H16 10.05.2015
7.06) Contract specifications
7.07) 3 Month Hedged Cost Average
7.08) 3 Month Rate September 2015 hedge
7.09) 3 Month Rate December 2015 hedge

8) Program Structure and Account Opening Procedure

8.01) Automated Trading Accounts (ATA)
8.02) The Fee Structure For This Program
8.03) Defining Overall Risk For Your Account
8.04) Exchanges Traded
8.05) Brokerage Firms
8.06) How Balances Are Guaranteed Plus or Minus Trading
8.07) How To Open An Account

If you have any questions send a message or contact me

Regards,
Peter Knight Advisor

—————————————————————-

Privacy Notice

Disclosure

Analysis Page FX Short-Term Trend Trader

1) Euro-FX – Today’s Technical Opinion Symbol (E6)

1.1) 15 year chart using monthly data
1.2) 7 year chart, monthly Data
1.3) 3 year chart, weekly data
1.4) 1 year chart, weekly data
1.5) 9 month chart, daily data
1.6) 3 month chart, daily data
1.7) 5 day chart 60 minute data
1.8) 1 day chart, 10 minute data
1.9) Today’s Technical Opinion
1.10) Ranges & Price Performance
1.11)Support & Resistance
1.12) Barchart Quotes, All Deliveries
1.13) Barchart Options Quotes
1.14) CME Futures Quotes, All Deliveries
1.15) CME Option Quotes
1.16) Contract Specifications each 0.01 = $12.50
1.17) Exchange Margin Requirement per 125,000 Euro FX
1.18) EUR Collar Spreadsheet

2) British Pound – Today’s Technical Opinion Symbol (B6)

2.1) 15 year chart using monthly data
2.2) 7 year Chart, monthly Data
2.3) 3 year chart, weekly data
2.4) 1 year chart, weekly data
2.5) 9 month chart, daily data
2.6) 3 month chart, daily data
2.7) 5 day chart 60 minute data
2.8) 1 day chart, 10 minute data
2.9) Today’s Technical Opinion
2.10) Ranges & Price Performance
2.11) Support & Resistance
2.12) Barchart Quotes All Deliveries
2.13) Barchart Options Quotes
2.14) CME Futures Quotes All Deliveries
2.15) CME Option Quotes
2.16) Contract Specifications each 0.01 = $6.25
2.17) Exchange Margin Requirement per 62,500 Pounds
2.18) GBP Collar Spreadsheet

3) Japanese Yen – Today’s Technical Opinion Symbol (J6)

3.1) 15 Year chart using monthly data
3.2) 7 Year Chart, monthly Data
3.3) 3 Year chart, weekly data
3.4) 1 year chart, weekly data
3.5) 9 month chart, daily data
3.6) 3 month chart, daily data
3.7) 5 day chart, 60 minute data
3.8) 1 day chart, 10 minute data
3.9) Today’s Technical Opinion
3.10) Ranges & Price Performance
3.11) Support & Resistance
3.12) Barchart Quotes All Deliveries
3.13) Barchart Options Quotes
3.14) CME Futures Quotes All Deliveries
3.15) CME Option Quotes
3.16) Contract Specifications each 0.01 = $12.50
3.17) Exchange Margin Requirement per 12,500,000 Yen
3.18) JPY Collar Spreadsheet

4) Australian Dollar – Today’s Technical Opinion Symbol (A6)

4.1) 15 Year chart using monthly data
4.2) 7 Year Chart, monthly Data
4.3) 3 Year chart, weekly data
4.4) 1 year chart, weekly data
4.5) 9 month chart, daily data
4.6) 3 month chart, daily data
4.7) 5 day chart 60 minute data
4.8) 1 day chart, 10 minute data
4.9) Today’s Technical Opinion
4.10) Ranges & Price Performance
4.11) Support & Resistance
4.12) Barchart Quotes All Deliveries
4.13) Barchart Options Quotes
4.14) CME Futures Quotes All Deliveries
4.15) CME Option Quotes
4.16) Contract Specifications each 0.01 = $10.00
4.17) Exchange Margin Requirement per 100,000 Australian
4.18) AUD Collar Spreadsheet

5) Canadian Dollar – Today’s Technical Opinion Symbol (D6)

5.1) 15 Year chart using monthly data
5.2) 7 Year Chart, monthly Data
5.3) 3 Year chart, weekly data
5.4) 1 year chart, weekly data
5.5) 9 month chart, daily data
5.6) 3 month chart, daily data
5.7) 5 day chart 60 minute data
5.8) 1 day chart, 10 minute data
5.9) Today’s Technical Opinion
5.10) Ranges & Price Performance
5.11) Support & Resistance
5.12) Barchart Quotes All Deliveries
5.13) Barchart Options Quotes
5.14) CME Futures Quotes All Deliveries
5.15) CME Option Quotes
5.16) Contract Specifications each 0.01 = $10.00
5.17) Exchange margin requirement per 100,000 Canadian
5.18) CAD Collar Spreadsheet

6) Swiss Franc – Today’s Technical Opinion Symbol (S6)

6.1) 15 Year chart using monthly data
6.2) 7 Year Chart, monthly Data
6.3) 3 Year chart, weekly data
6.4) 1 year chart, weekly data
6.5) 9 month chart, daily data
6.6) 3 month chart, daily data
6.7) 5 day chart 60 minute data
6.8) 1 day chart, 10 minute data
6.9) Today’s Technical Opinion
6.10) Ranges & Price Performance
6.11) Support & Resistance
6.12) Barchart Quotes All Deliveries
6.13) Barchart Options Quotes
6.14) CME Futures Quotes All Deliveries
6.15) CME Option Quotes
6.16) Contract Specifications each 0.01 = $12.50
6.17) Exchange Margin Requirement per 125,000 Swiss

7) Major Curencies Priced In USD/Gold

7.1) Gold GBP
7.2) Gold USD
7.3) Gold EUR
7.4) Gold CAD
7.5) Gold JPY
7.6) Gold AUD
7.7) Gold CHF

8) Program Structure and Account Opening Procedure

8.1) (ATA’s), What They Are and How They Work
8.2) The Fee Structure For This Program
8.3) Defining Overall Risk For Your Account
8.4) How Balances Are Guaranteed Plus or Minus Trading
8.5) How To Open An Account

If you have questions send a message or contact me.

Regards,
Peter Knight

—————————————————————-

Privacy Notice

Disclosure

FX Trend Trade Performance Summary April 2012 – March 2023

Recommended Starting Balance	$25,000.00
Cumulative Net Profit	$319,280.57
Maximum Drawdown (37.06%)	($12,972.24)
Best Year 2022 +286.04	$71,509.46
Worst Year 2014 +44.58%	$11,145.74
2012-2022 Average +116.10%	$29,025.51
2023 51.21%	$12,802.85

Performance is based on trading one $25,000 unit, never adding units and withdrawing all net profits annually. The FX-NC uses leverage and has a realistic risk factor of $17,500 per unit if you are not in a position to comfortably assume this risk you should not participate in this program.

Risk Disclosure Defining Account Risk

2) Contact me and I’ll walk you through how we trade this program when we’re done you’ll be able to verify past performance and track trades as they occur.

3) Program Structure and Account Opening Procedure

3.1) Automated Trading Accounts (ATA)
3.2) The Fee Structure For This Program
3.3) Defining Overall Risk For Your Account
3.4) Exchanges Traded
3.5) Brokerage Firms
3.6) How Balances Are Guaranteed Plus or Minus Trading
3.7) How To Open An Account

If you have questions contact me.

Regards,
Peter Knight

—————————————————————-

Privacy Notice

Risk Disclosure

Trading rates higher September 2018 Update

Latest from the Federal Reserve on the US economy.

- - As expected the Fed hiked interest rates by 0.25% on Wednesday.
  - Told us the U.S. economy was strong, US inflation was contained.
  - To expect 5 more 0.25% rate hikes by December 2020.
  - Interest Rate Analysis Page

1) Highlights from the Fed’s press conference (5:00)

All Fed conferences & statements 2013 through 2018

2) Today’s Fed Funds Rate

3) Contract appreciation from Nov. 2015 to Sep. 2018

$500.00 at 0.1200% (November 2015)
$8,958.32 at 2.1500% (September 2018)

4) Contract valuations at Fed expectations through Dec. 2020

$10,000.00 at 2.40%, December 2018
$12,916.67 at 3.10%, December 2019
$14,166.67 at 3.40%, December 2020

1953-2018 chart and monthly historical data

Market Versus Fed Expectations

5) The current face value of 15 trillion USD in open derivatives positions has priced in only 2 of the Fed’s 4, 0.25% hikes between December 2018 and December 2020.

To calculate the market’s expectations for rate hikes
Take the nearby delivery month – the further out delivery = the expected hike

Example
From December 2018 to December 2020 (27 Sep. 2018)
December 2018 (GEZ18) price 97.3250 (Long)
December 2020 (GEZ20) price – 96.8250 (Short)
Expected rate hike = 00.5000%

Each 0.01 = $25.00
$1,250.00 at 0.50 = Value at market expectations (27 Sep. 2018)
$2,500.00 at 1.00 = Value at the Fed’s expectations
+$1,250.00 = Profit at Fed expectations
Exchange margin requirement

Current GEZ 2018 – GEZ 2020 chart

6) Between December 2019 and December 2020 the Market is currently pricing in zero rate hikes. This spread has gone from pricing in an increase in rates of 0.34% to a decrease in rates of -0.025%.

Dec. 2019 to Dec. 2020 market expectations (27 Sep. 2018)
December 2019 (GEZ19) 97.8500 (Long)
December 2020 (GEZ20) – 96.8250 (Short)
Expected rate decrease -0.0250%

Each 0.01 = $25.00
-$62.50 at -0.0250 = Value at market expectations 27 Sep. 2018
$625.00 at 0.2500 = Value at Fed expectations
+$687.50 = Profit at Fed expectations
Exchange margin requirement

Current GEZ 2019 – GEZ 2020 chart

7) Some of my trades to track

Spread values are on the right of the chart
Spread value = the market’s expected change in rates between delivery dates
Click on delivery dates for long term charts, entry price for short term charts
For additional trades in Euro & US rate markets contact me

For each position I’m allocation $10,000.00 USD or major currency long 10 contacts of the nearby delivery, short 10 of the forward
Example (6.1), long 10 Dec 2019, short 10 Dec. 2021
Each 0.01 = $250.00

7.1) Dec 2019 – Dec 2021 Entry -0.0400, 17 Sep. 2018
7.2) Dec 2019 – Dec 2020 Entry -0.0150, 12 Sep. 2018
7.3) Dec 2018 – Dec 2022 Entry +0.3100, 27 Aug. 2018
7.4) Dec 2018 – Dec 2023 Entry +0.3800, 22 Aug. 2018
7.5) Dec 2019 – Dec 2023 Entry +0.0500, 27 Jul. 2018
7.6) Dec 2019 – Dec 2022 Entry -0.0350, 17 Jul. 2018
7.7) Dec 2018 – Dec 2022 Entry +0.2900, 15 Jul. 2018
7.8) Dec 2018 – Dec 2021 Entry +0.2650, 13 Jul. 2018
7.9) Dec 2018 – Dec 2020 Entry +0.3150, 29 May 2018
7.10) Fed Funds Dec 2018 Short 99.1650, 03 Oct 2016
7.11) Fed Fund (ZQ) quotes all deliveries
7.12) (Fed Funds contract information)
7.13) 3 Month Rates (GE) quotes all deliveries
7.14) (3 month rate information)
7.15) Today’s probability for a rate hike at the next Fed meeting

8) About trading with my team.

8.1) Introduction
8.2) Exchanges we trade on
8.3) Brokerage firms
8.4) What an ATA is and how they work
8.5) Fee structure
8.6) How to define overall risk on your account
8.7) How balances are protected
8.8) Open An Account

9) Interest Rate Futures/Options Educational Videos and Resources

9.1) Futures Educational Videos (33)
9.2) Futures Options Educational Videos (34)

9.3) Eurodollar Interest Rate Futures Contracts
9.4) Eurodollar Futures Pricing And The Forward Rate Market
9.5) How to Trade Eurodollar Spreads
9.6) Fed Fund Futures contracts
9.7) Understanding IMM Price and Date
9.8) Understanding Eurodollar Strips
9.8) What is the Eurodollar Settlement Process?
9.10) Treasury Futures Contracts
9.11) Calculating U.S. Treasury Pricing
9.12) Treasury Intermarket Spreads – The Yield Curve
9.13) Trading the U.S. Treasury Curve: Two versus Ten
9.14) How Can You Measure Risk in Treasuries?
9.15) Treasuries Hedging and Risk Management
9.16) The Basics of Treasuries Basis
9.17) Treasuries Delivery Process
9.18) The Importance of Basis Point Value (BPV)
9.19) Understanding Packs and Bundles
9.20) Understanding Convexity Bias
9.21) Understanding the FOMC Report
9.22) Get to know Treasuries Cheapest To Deliver (CTD)
9.23) Trading the Link Between USD/JPY and U.S. Treasuries

10) Previous Rate Reports and Articles 2015 – 2018

10.1) June 2018 Update Trading Rates Higher
10.2) US Economy by the numbers 2000 – 2018 4 June 2018
10.3) Trading Rates Higher & Fed Expectations 28 November 2017
10.4) Trading the Fed Funds rate higher 13 March 2017
10.5) Trade update 11 August 2016 through 20 January 2017
10.6) Trading Rates Higher & Fed Expectations 20 January 2017
19.7) Update Seeking Alpha 13 January 2017
10.8) Market Versus Fed For Rates 16 September 2016
10.9) Market Versus Fed Expectations December 2019 4 Sep. 2016
10.10) Update on Seeking Alpha 5 September 2016
10.11) Who’s right the market or the Fed 31 May 2016
10.12) Original positions published on Seeking Alpha 5 Nov. 2015
10.13) Countdown to Higher Rates 9 October 2015
10.14) Trading 3 Month Rates & Fed Expectations 24 Sep. 2015
10.15) What I See On The Horizon 6 August 2015
10.16) Hedging Treasury Risk 3 August 2015
10.17) The Math On Why U.S. Inflation Is “contained” 22 July 2015
10.18) Trading the Fed Funds Rate Higher 23 July 2015
10.19) Trading Rates Higher & Fed Expectations 9 June 2015
10.20) Trading 3 Month Rates & Fed Expectations 27 April 2015
10.21) Trading Rates Higher Using Cost Averaging 24 March 2015
10.22) Market versus Fed expectations 23 March 2015

11) Fed Funds Risk Reward Spreadsheets

11.1) 3 Month Rates Mar., Jun. Dec. Fed Funds Mar. hedge
11.2) Fed Funds December 2016
11.3) Fed Funds March 2016 S 99.74 (no hedge)
11.4) Fed Funds December 2016 S 99.46 (no hedge) 100K
11.5) Fed Funds December 2016 S 99.46 (no hedge) 10K
11.6) Trading 3 month rates higher through December 2016
11.7) July 2015 25k no hedge
11.8) July 2015 99.83 25K cost average hedge
11.9) July 2015 99.82 25K 87.50 hedge
11.10) July 2015 10K 99.81/99.75 hedge
11.11) Sep 2015 25k cost average hedge
11.12) Oct 2015 25K cost average hedge
11.13) Dec 2015 25K cost average hedge

12) 3 Month Deposit Spreadsheets

12.1) 3 Month Dec 2017 S 99.70 (no hedge)
12.2) 3 Month put weighted vol spread Dec 2017
12.3) 3 Month vol spread Dec 2017
12.4) 3 Month vol bear spread no hedge Dec 2017
12.5) 3 Month GEH-M-Z-201616 Fed Funds ZQ-H16 10.05.2015
12.6) Contract specifications
12.7) 3 Month Hedged Cost Average
12.8) 3 Month Rate September 2015 hedge
12.9) 3 Month Rate December 2015 hedge

13) Other Rate Markets I trade

13.1) US Interest rates
13.2) European interest rates
13.3) Australian interest rates
13.4) Educational videos and links

If you have any questions send a message or contact me

Regards,
Peter Knight Advisor

—————————————————————-

Privacy Notice

Disclosure

Trading Rates Higher 201806

Interest Rate Educational Videos & Resources

1) The Fed tells us we’ll see 6, 0.25% rate hikes through December 2020 (2:30)

Full Fed press conference (52:19) Interest Rate Educational Videos & Resources

3) 1953 to 2018 Fed Funds Chart

3) Fed Funds contract valuations at Fed expectations

3.1) 0.12% contract value = $500.00 (November 2015)
3.2) 1.91% contract value = $7,958.21 (16 September 2018)
3.3) 2.40% December 2018 = $10,000.00
3.4) 3.10% December 2019 = $12,916.67
3.5) 3.40% December 2020 = $14,166.67
3.6) Each 0.01 = $41.67
3.7) Fed Funds 1954 – 2018 chart
3.8) Data & Contract Valuation (excel)
3.9) Yield Curve
3.10) US Rate Analysis
3.11) Euro Rate Analysis
3.12) Educational Links

4) 15+ trillion in the face value of open positions tells us the market’s expectations for hikes through December 2024 to the 0.0050%.

Calculating the market’s expectation
Nearby delivery month
– Further out deliver month
= expected hike

December 2018 (GEZ18) 99.5000
December 2024 (GEZ24) – 98.9000
Expected rate hike = 00.6000%

5) Market’s priced in rate hike expectations by year

5.1) December 2018 September 2018 through December 2018
5.2) December 2019 September 2018 through December 2019
5.3) December 2020 September 2018 through December 2020
5.4) December 2021 September 2018 through December 2021
5.5) December 2022 September 2018 through December 2022
5.6) December 2023 September 2018 through December 2023
5.7) December 2024 September 2018 through December 2024

6) Market’s 15+ trillion by year.

6.2) Remainder of 2018 Fed’s expectations = 0.50% Increase
6.3) December 2018 to December 2019 Fed’s expectations = 0.70% Increase
6.4) December 2019 to December 2020 Fed’s expectations = 0.30% Increase
6.5) December 2020 to December 2021
6.6) December 2021 to December 2022
6.6) December 2022 to December 2023
6.8) December 2023 to December 2024

7) Some of our current trades to follow

Spread values are on the right of the chart
Spread values = the market’s expected change in rates between delivery dates
Click on delivery dates for the long term chart, entry price for intraday charts
For additional trades in other Euro & US rate markets contact me

7.1) Dec 2019 – Dec 2021 Entry -0.0400, 17 Sep. 2018, 0.01 = $250.00
7.2) Dec 2019 – Dec 2020 Entry -0.0150, 12 Sep. 2018, 0.01 = $250.00
7.3) Dec 2018 – Dec 2022 Entry +0.3100, 27 Aug. 2018, 0.01 = $250.00
7.4) Dec 2018 – Dec 2023 Entry +0.3800, 22 Aug. 2018, 0.01 = $250.00
7.5) Dec 2019 – Dec 2023 Entry +0.0500, 27 Jul. 2018, 0.01 = $250.00
7.6) Dec 2019 – Dec 2022 Entry -0.0350, 17 Jul. 2018, 0.01 = $250.00
7.7) Dec 2018 – Dec 2022 Entry +0.2900, 15 Jul. 2018, 0.01 = $250.00
7.8) Dec 2018 – Dec 2021 Entry +0.2650, 13 Jul. 2018, 0.01 = $250.00
7.9) Dec 2018 – Dec 2020 Entry +0.3150, 29 May 2018, 0.01 = $250.00
7.10) Fed Funds Dec 2018 Short 99.1650, 03 Oct 2016, 0.01 = $41.67
7.11) Fed Fund (ZQ) quotes all deliveries (Fed Funds contract information)
7.12) 3 Month Rates (GE) quotes all deliveries (3 month rate information)
7.13) Today’s probability for a rate hike at the next Fed meeting
7.14) Interest rate educational videos and resources

8) Interest Rate Analysis Pages

8.1) US Rate Analysis
8.2) Euro Rate Analysis

9) Educational Videos and Resources

9.1) Video – About Eurodollar interest rate futures
9.2) What the 3 month rate is (Eurodollar) and how it’s set
9.3) Eurodollar futures pricing and the Forward rate market
9.4) Video – The basics of trading Eurodollar interest rate spreads
9.5) Video – Introduction to Fed Fund futures contracts
9.6) What the Fed funds rate is and how it’s set
9.7) Today’s probability for a rate hike at the next Fed meeting
9.8) Interest rate 3 month to 30 year curve
9.9) Fed Meetings and Press Conferences
9.10) Understanding the FOMC Report
9.11) All Rate Educational Videos & Resources
9.12) Futures Educational Videos (33)
9.13) Futures Options Educational Videos (34)

10) Previous Rate Reports and Articles 2015 – 2018

10.1) US Economy by the numbers 2000 – 2018 4 June 2018
10.2) Trading Rates Higher & Fed Expectations 28 November 2017
10.3) Trading the Fed Funds rate higher 13 March 2017
10.4) Trade update 11 August 2016 through 20 January 2017
10.5) Trading Rates Higher & Fed Expectations 20 January 2017
10.6) Update Seeking Alpha 13 January 2017
10.7) Market Versus Fed For Rates 16 September 2016
10.8) Market Versus Fed Expectations December 2019 4 September 2016
10.9) Update on Seeking Alpha 5 September 2016
10.10) Who’s right the market or the Fed 31 May 2016
10.11) Original positions published on Seeking Alpha 5 November 2015
10.12) Countdown to Higher Rates 9 October 2015
10.13) Trading 3 Month Rates Higher & Fed Expectations 24 September 2015
10.14) What I See On The Horizon 6 August 2015
10.15) Hedging Treasury Risk 3 August 2015
10.16) The Math On Why U.S. Inflation Is “contained” 22 July 2015
10.17) Trading the Fed Funds Rate Higher 23 July 2015
10.18) Trading Rates Higher & Fed Expectations 9 June 2015
10.19) Trading 3 Month Rates Higher & Fed Expectations 27 April 2015
10.20) Trading Rates Higher Using Cost Averaging 24 March 2015
10.21) Market versus Fed expectations 23 March 2015

11) Fed Funds Risk Reward Spreadsheets

11.1) 3 Month Rates March, June December Fed Funds March hedge
11.2) Fed Funds December 2016
11.3) Fed Funds March 2016 S 99.74 (no hedge)
11.4) Fed Funds December 2016 S 99.46 (no hedge) 100K
11.5) Fed Funds December 2016 S 99.46 (no hedge) 10K
11.6) Trading 3 month rates higher through December 2016
11.7) July 2015 25k no hedge
11.8) July 2015 99.83 25K cost average hedge
11.9) July 2015 99.82 25K 87.50 hedge
11.10) July 2015 10K 99.81/99.75 hedge
11.11) Sep 2015 25k cost average hedge
11.12) Oct 2015 25K cost average hedge
11.13) Dec 2015 25K cost average hedge

12) 3 Month Deposit Spreadsheets

13) Other interest rate markets traded

13.1) US Interest rates
13.2) European interest rates
13.3) Australian interest rates
13.4) Educational videos and links

14) Open An Account

Account minimum $10,000 USD or major currency equivalent

If you have any questions send a message or contact me

Regards,
Peter Knight

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Privacy Notice

Disclosure

FX-C Disclosure of Trading Methodology (FX Collar)

ATA Performance Homepage

1) Disclosure of Trading Methodology (25:46)

Message me with any questions.

1.1 ) Option Collars
1.2) Working Examples of Collaring Positions
1.3) 7 year Euro Currency chart, monthly, no analysis
1.4) About Bollinger Bands
1.5) Understanding Moving Averages
1.6) 7 year Euro Currency analysis chart, monthly Data
1.7) Technical Opinion (12 secondary indicators)
1.8) Euro Currency March 2015 to June 2015 daily data
1.9) Explaining Call Options (Short and Long)
1.10) Explaining Put Options (Short and Long)

2) Euro-FX – Today’s Technical Opinion Symbol (E6)

2.1) 15 year chart using monthly data
2.2) 7 year chart, monthly Data
2.3) 3 year chart, weekly data
2.4) 1 year chart, weekly data
2.5) 9 month chart, daily data
2.6) 3 month chart, daily data
2.7) 5 day chart 60 minute data
2.8) 1 day chart, 10 minute data
2.9) Today’s Technical Opinion
2.10) Ranges & Price Performance
2.11)Support & Resistance
2.12) Barchart Quotes, All Deliveries
2.13) Barchart Options Quotes
2.14) CME Futures Quotes, All Deliveries
2.15) CME Option Quotes
2.16) Contract Specifications each 0.01 = $12.50
2.17) Exchange Margin Requirement per 125,000 Euro FX
2.18) EUR Collar Spreadsheet

3) British Pound – Today’s Technical Opinion Symbol (B6)

3.1) 15 year chart using monthly data
3.2) 7 year Chart, monthly Data
3.3) 3 year chart, weekly data
3.4) 1 year chart, weekly data
3.5) 9 month chart, daily data
3.6) 3 month chart, daily data
3.7) 5 day chart 60 minute data
3.8) 1 day chart, 10 minute data
3.9) Today’s Technical Opinion
3.10) Ranges & Price Performance
3.11) Support & Resistance
3.12) Barchart Quotes All Deliveries
3.13) Barchart Options Quotes
3.14) CME Futures Quotes All Deliveries
3.15) CME Option Quotes
3.16) Contract Specifications each 0.01 = $6.25
3.17) Exchange Margin Requirement per 62,500 Pounds
3.18) GBP Collar Spreadsheet

4) Japanese Yen – Today’s Technical Opinion Symbol (J6)

4.1) 15 Year chart using monthly data
4.2) 7 Year Chart, monthly Data
4.3) 3 Year chart, weekly data
4.4) 1 year chart, weekly data
4.5) 9 month chart, daily data
4.6) 3 month chart, daily data
4.7) 5 day chart, 60 minute data
4.8) 1 day chart, 10 minute data
4.9) Today’s Technical Opinion
4.10) Ranges & Price Performance
4.11) Support & Resistance
4.12) Barchart Quotes All Deliveries
4.13) Barchart Options Quotes
4.14) CME Futures Quotes All Deliveries
4.15) CME Option Quotes
4.16) Contract Specifications each 0.01 = $12.50
4.17) Exchange Margin Requirement per 12,500,000 Yen
4.18) JPY Collar Spreadsheet

5) Australian Dollar – Today’s Technical Opinion Symbol (A6)

5.1) 15 Year chart using monthly data
5.2) 7 Year Chart, monthly Data
5.3) 3 Year chart, weekly data
5.4) 1 year chart, weekly data
5.5) 9 month chart, daily data
5.6) 3 month chart, daily data
5.7) 5 day chart 60 minute data
5.8) 1 day chart, 10 minute data
5.9) Today’s Technical Opinion
5.10) Ranges & Price Performance
5.11) Support & Resistance
5.12) Barchart Quotes All Deliveries
5.13) Barchart Options Quotes
5.14) CME Futures Quotes All Deliveries
5.15) CME Option Quotes
5.16) Contract Specifications each 0.01 = $10.00
5.17) Exchange Margin Requirement per 100,000 Australian
5.18) AUD Collar Spreadsheet

6) Canadian Dollar – Today’s Technical Opinion Symbol (D6)

6.1) 15 Year chart using monthly data
6.2) 7 Year Chart, monthly Data
6.3) 3 Year chart, weekly data
6.4) 1 year chart, weekly data
6.5) 9 month chart, daily data
6.6) 3 month chart, daily data
6.7) 5 day chart 60 minute data
6.8) 1 day chart, 10 minute data
6.9) Today’s Technical Opinion
6.10) Ranges & Price Performance
6.11) Support & Resistance
6.12) Barchart Quotes All Deliveries
6.13) Barchart Options Quotes
6.14) CME Futures Quotes All Deliveries
6.15) CME Option Quotes
6.16) Contract Specifications each 0.01 = $10.00
6.17) Exchange margin requirement per 100,000 Canadian
6.18) CAD Collar Spreadsheet

7) Swiss Franc – Today’s Technical Opinion Symbol (S6)

7.1) 15 Year chart using monthly data
7.2) 7 Year Chart, monthly Data
7.3) 3 Year chart, weekly data
7.4) 1 year chart, weekly data
7.5) 9 month chart, daily data
7.6) 3 month chart, daily data
7.7) 5 day chart 60 minute data
7.8) 1 day chart, 10 minute data
7.9) Today’s Technical Opinion
7.10) Ranges & Price Performance
7.11) Support & Resistance
7.12) Barchart Quotes All Deliveries
7.13) Barchart Options Quotes
7.14) CME Futures Quotes All Deliveries
7.15) CME Option Quotes
7.16) Contract Specifications each 0.01 = $12.50
7.17) Exchange Margin Requirement per 125,000 Swiss

8) Program Structure and Account Opening Procedure

9) Educational Resources

9.1) Basics of the Futures Markets
9.2) Basics of Futures Options
9.3) Fundamentals and FX Futures
9.4) Trading the FX Markets
9.5) Australian Dollar Futures
9.6) British Pound Futures
9.7) Canadian Dollar Futures
9.8) Japanese Yen Futures
9.9) Euro FX Futures
9.10) Introduction to Order Types
9.11) Detailed Description of Order Types With Examples
9.12) Understanding Futures Margin Requirements
9.13) Understanding Moving Averages
9.14) About Bollinger Bands & How to Set Them
9.15) Understanding Support and Resistance
9.16) Defining Trend, Trade Duration & Number of Contracts Traded
9.17) Explaining Call Options (Short and Long)
9.18) Explaining Put Options (Short and Long)
9.19) Option Collars
9.20) Working Examples of Collaring Positions
9.21) What is the European Central Bank?
9.22) Understanding FX Quote Conventions
9.23) FX Futures Pricing and Basis
9.24) Understanding the FX Delivery & Settlement Process
9.25) Hedging FX Risk
9.26) A Look at FX Exchange For Physical (EFP)
9.27) FX Spot Markets vs. Currency Futures
9.28) Test this strategy on any of these 17 related and unrelated markets

10) Program Structure and Account Opening Procedure

10.1) ATA’s, What They Are and How They Work
10.2) The Fee Structure For This Program
10.3) Defining Overall Risk For Your Account
10.4) Exchanges Traded
10.5) Brokerage Firms
10.6) How Balances Are Guaranteed Plus or Minus Trading
10.7) How To Open An Account

If you have any questions send a message or contact me

Regards,
Peter Knight Advisor

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Privacy Notice

Disclosure

Global Stock Indices I trade

Message me and I’ll show you how to use these

1) S&P 500 Symbol (ES)

1.1) 1983 – 2018 chart
1.2) S&P year to date
1.3) 10 Year, Monthly Data
1.4) 3 Year, Weekly Data
1.5) 6 Month Daily Data (ESZ18)
1.6) 10 Day Using 60 Minute (ESZ18)
1.7) Today using 10 minute bars (ESZ18)
1.8) Today using 5 minute data (ESZ18) 1
1.9) Today’s Technical Opinion (ESZ18)
1.10) Ranges & Price Performance (ESZ18)
1.11) Support & Resistance (ESZ18)
1.12) Barchart Quotes, All Deliveries
1.13) Barchart Options Quotes
1.14) CME Futures Quotes, All Deliveries
1.15) CME Option Quotes
1.16) Contract Specifications each 1.00 = $50.00
1.17) S&P Performance Homepage
1.18) Exchange Margin Requirement
1.19) S&P 500 Collar Spreadsheet

2) Euro Stoxx 50 Symbol FX

2.1) 6 Month Chart, Daily Data
2.2) 3 Year Chart, Weekly Data
2.3) 7 Year Chart, Monthly Data
2.4) Today’s Technical Opinion
2.5) Futures Quotes
2.6) Options Quotes
2.7) Contract Specifications

3) Stoxx E600 Banks Symbol FA

3.1) 6 Month Chart, Daily Data
3.2) 3 Year Chart, Weekly Data
3.3) 7 Year Chart, Monthly Data
3.4) Today’s Technical Opinion
3.5) Futures Quotes
3.6) Contract Specifications

4) Dax Index Symbol DY

4.1) 6 Month Chart, Daily Data
4.2) 3 Year Chart, Weekly Data
4.3) 7 Year Chart, Monthly Data
4.4) Today’s Technical Opinion
4.5) Futures Quotes
4.6) Options Quotes
4.7) Contract Specifications

5) CAC 40 Symbol MX

5.1) 6 Month Chart, Daily Data
5.2) 3 Year Chart, Weekly Data
5.3) 7 Year Chart, Monthly Data
5.4) Today’s Technical Opinion
5.5) Futures Quotes
5.6) Options Quotes
5.7) Contract Specifications

6) Swiss Market Index Symbol SZ

6.1) 6 Month Chart, Daily Data
6.2) 3 Year Chart, Weekly Data
6.3) 7 Year Chart, Monthly Data
6.4) Today’s Technical Opinion
6.5) Futures Quotes
6.6) Options Quotes
6.7) Contract Specifications

7) Hang Seng Index Symbol HS

7.1) 6 Month Chart, Daily Data
7.2) 3 Year Chart, Weekly Data
7.3) 7 Year Chart, Monthly Data
7.4) Today’s Technical Opinion
7.5) Futures Quotes
7.6) Options Quotes
7.7) Contract Specifications

8) Nikkei 225 (JPY) NL

8.1) 6 Month Chart, Daily Data
8.2) 3 Year Chart, Weekly Data
8.3) 7 Year Chart, Monthly Data
8.4) Today’s Technical Opinion
8.5) CME (JPY) Futures Quotes
8.6) CME(JPY) Futures contact specifications
8.7) JPX Futures Quotes
8.8) Options Quotes
8.9) Contract Specifications

9) ASX 200 Index Symbol AP

9.1) 6 Month Chart, Daily Data
9.2) 3 Year Chart, Weekly Data
9.3) 3 Year Chart, Monthly Data
9.4) Today’s Technical Opinion
9.5) Futures Quotes
9.6) Options Quotes
9.7) Contract Specifications

10) FTSE 100 Symbol X

10.3) 6 Month Chart, Daily Data
10.2) 3 Year Chart, Weekly Data
10.1) 7 Year Chart, Monthly Data
10.4) Today’s Technical Opinion
10.5) Futures Quotes
10.6) Options Quotes
10.7) Contract Specifications

11) Our Top Stock Index ATA Trading Program

12) Metals Analysis & Trends

13) Currency Analysis & Trends

14) Exchanges I Trade

15) Brokerage

16) Fee Structure

17) How Balances Are Protected

18) How To Define Overall Risk On Your Account

19) Open An Account

20) Schedu le a time to review trading programs with me in the sector(s) of your choice.

If you have questions send a message or contact me.

Regards,
Peter Knight Advisor

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Privacy Notice

Risk Disclosure

What is an Index Future?

Stock Index Education Home Page

Overview

Equity Index futures are “futures contracts” on equity indices. They are cash settled contracts and the majority have quarterly expiration dates scheduled for the months of March, June, September, and December.

Equity Index futures provide market participants with tools to efficiently hedge or express an opinion on an equity index market, practically 24 hours a day, 6 days a week.

Benchmarks: The Backbone of Equity Index Futures

CME Group focuses on many of the widely followed and globally recognized equity index benchmarks. CME Group Equity Index products include both equity index futures and options on equity index futures. Currently, this represents 59 equity index futures and 29 equity index options. CME Group Equity Index products include a number of well-known indices.

Some of these are available in a variety of different sizes to accommodate different trading needs. For example, we offer E-mini S&P 500® futures contracts, which are one-fifth the size of standard S&P 500®futures.

Spanning the globe, our Equity Index suite includes US dollar-based products such as the S&P 500®, the Nasdaq 100, and the Dow Jones Industrial Average as well as products covering other key markets, such as the FTSE Russell 100, a UK-based index; the Nikkei 225, a Japanese-based index; and the FTSE China 50, a China-based index.

As the world’s largest derivatives exchange, CME Group offers equity traders a deep and liquid marketplace to speculate or hedge their portfolio. What does all this mean? In short, CME Group offers a variety of Equity Index products suitable for many types of end users.

Identifying a trend changes in Gold – fundamentals that fuel the moves

Gold Performance Homepage

1) Identifying a trend change in Gold from down to up

1.1) Price action will move above the EMA9 (red line) on the daily data chart
1.2) Next this chart using weekly price data
1.3) Finally this chart using monthly data
1.4) The overall of the 13 trend confirmation indicators will a 50%+ buy

2) Fundamentals that fuel the moves.

After gold’s spectacular rally from $280 per ounce in 2002 to $1,900 in 2011, this nine-year rally closely tracked the 2002-2011 bear market in the U.S. dollar (USD). Moreover, expectations of gold investors that the Fed’s post-crisis quantitative easing (QE) programs would trigger high rates of inflation went unrealized. So far as we can tell, QE didn’t spark much of anything, least of all consumer price inflation.

Gold’s bear market coincided with the bull run in USD, the end of QE and the Fed’s tightening cycle. Increased gold mining supply hasn’t helped either. Indeed, gold and the Bloomberg U.S. Dollar Index still have a strong negative correlation (Figure 3). Although gold’s negative correlation to Fed funds futures has diminished somewhat, anticipation of higher rates is not good news for gold

3) Gold has a Consistent and Strong Negative Correlation to the U.S. Dollar.

Figure 1: Gold has a Consistent and Strong Negative Correlation to the U.S. Dollar.

As such, the big questions for gold investors is how much longer will the USD bull market last and how far will the Fed’s tightening cycle go? The answers to these intertwined questions will play a major role in determining when the next gold bull market will begin.

4) Gold’s Correlation to Fed Funds Futures is Weaker Than in the Past but Is Still Negative.

Figure 2: Gold’s Correlation to Fed Funds Futures is Weaker Than in the Past but Is Still Negative.

Monetary and fiscal policy are pulling the dollar in opposite directions. Relative to the rest of the world, U.S. monetary policy is tight and becoming tighter. The Fed has already hiked rates seven times and will almost certainly go an eighth time in September. (The Federal Open Market Committee (FOMC) meets on September 25/26). Moreover, its “dot plot,” a forecast survey of FOMC members, suggests that it will go another six times between December 2018 and the end of 2020. No other central bank is undertaking a similar trajectory of rate increases. The Bank of Canada and the Bank of England are hiking rates about once or, at most, twice per year. The European Central Bank and the Bank of Japan won’t likely hike rates for years, although they may halt their QE programs by the end of the decade. Tighter U.S. monetary policy is sending the U.S. dollar higher versus most other currencies and against gold, which has the disadvantage of paying no interest on holdings.

By contrast, U.S. fiscal policy is becoming looser just as most other countries continue to reduce deficits. Since the end of 2016, the U.S. budget deficit has expanded from 2% to 4% of GDP (Figure 3). Normally, an expansion of U.S. budget and trade deficits bodes poorly for the U.S. dollar (Figure 4) and is supportive for gold.

5) U.S. Deficits are Expanding While Europe’s (and Most Others) Shrink.

Figure 3: U.S. Deficits are Expanding While Europe’s (and Most Others) Shrink.

6) All Else Being Equal, Bigger Deficits are Usually Bearish for the Dollar.

Figure 4: All Else Being Equal, Bigger Deficits are Usually Bearish for the Dollar.

The December 2017 tax cut and the March 2018 spending increases were bearish for the U.S. dollar and supported gold for a while, but U.S. fiscal policy appears to be on a stable trajectory. Further tax and spending legislation is unlikely until after the midterm elections in November (at the earliest) and more likely not until after the next presidential election in 2020. As such, monetary policy has been left to drive the dollar higher over the past six months as continued Fed tightening appears to have sparked the debut of an emerging market currency crisis (Figure 5)

7) Crashing Emerging Market Currencies Mean a Soaring USD.

Figure 5: Crashing Emerging Market Currencies Mean a Soaring USD.

While monetary and fiscal policy may be in a tug of war currently, this won’t last forever. Eventually, the Fed will stop tightening. That alone could be bearish for USD and bullish for gold, as it will allow investors to focus on the widening U.S. fiscal deficits. Moreover, if the Fed hikes too much, resulting in a recession, it will not only have to stop hiking rates, it would have to ease monetary policy in a hurry. Plus, when the economy goes into a recession, budget deficits typically explode, rising by 4% of GDP on average. That could potentially explode the deficit from 4% of GDP currently to 8%. The combination of wider fiscal deficits and easing monetary policy would be toxic for the U.S. dollar and would likely be a godsend for gold investors.

As such, so long as the Fed keeps tightening, gold is more likely than not to remain under downward pressure. This will be especially true if the emerging market currency crisis broadens to include more countries, sending USD higher. However, if the Fed overtightens, it could prove extremely bullish for gold when the central bank is forced to reverse course and ease policy. Watch the Fed’s dot plot forecast closely for hints as to where it believes it can take monetary policy in the future.

Lastly, there is the issue of China and the trade war. So far, the trade war has been bullish for the U.S. dollar and probably, on balance, not good news for gold. Typically, foreign currencies react to news of higher U.S. tariffs by selling off, and a stronger USD, as we have seen, is usually bad news for gold. However, if the U.S.-Sino trade dispute sparks a slowdown in Chinese growth, this could ultimately prove to be bearish for every commodity in the world save one: gold. China’s GDP growth rate correlates negatively with gold prices: stronger Chinese growth is often bearish for gold, whereas weaker growth is often bullish (Figure 6).

8) Stronger Chinese Growth is Often Bearish for Gold.

Figure 6: Stronger Chinese Growth is Often Bearish for Gold.

Chinese growth is burdened by high debt levels, trade uncertainty and an increasingly overvalued currency. If Chinese growth slows, it may have to devalue its currency at some point. The moment of devaluation, if and when it happens, will probably be bearish for gold. However, the aftermath could be quite bullish. A stronger dollar could force the Fed to stop tightening and could expand the U.S. trade deficit, setting the stage for eventual dollar weakening and gold strength.

Fed tightening has been a difficult experience for gold investors but each time the Fed hikes rates, it increases the likelihood of a downturn in the U.S. economy. For gold, it’s difficult to imagine what could be more bullish than a U.S. recession.

9) Bottom Line

A strong dollar, tighter U.S. monetary policy have been bearish for gold.

Monetary and fiscal policies are pulling USD in opposite directions.

If the Fed overtightens, U.S. fiscal and monetary policy will eventually pull the dollar in the same direction – downward.

Falling U.S. interest rates and a weakening dollar could be extremely bullish for gold but neither of these scenarios is happening yet, so it may be 3 months to 1 year too soon to call a gold bull market.

If you have questions send a message or contact me

Regards,
Peter Knight Advisor

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Privacy Notice

Risk Disclosure

Trading Opportunities in Equity Index Futures

Trading Opportunities

Due to their wide acceptance as benchmarks and deep liquidity, Equity Index and Select Sector futures can be used by risk managers and traders for a variety of purposes. These flexible products can be employed in numerous trading and hedging strategies.

Possible Trading Strategies

Examples of possible trading strategies include:

Outright bull/bear directional trades
Beta replication/beta adjustment
Portable alpha
Conditional rebalancing
Spreads
Sector rotation

Index Spreads

Another possible trading strategy is an index spread. A spread is the simultaneous purchase and sale of two futures contracts. An index spread is a common and effective trading strategy. The strategy is designed to express the relative value between index contracts rather than an outright market direction bias.

How Spreads Are Used

Outright long or short positions in Equity Index futures can be easily established to reflect a trader’s point of view regarding that index’s next directional move or trend. For example, if a trader believes that the S&P 500 Index is over-valued and will trade lower soon he may sell E-mini S&P 500 futures to express that view.

Asset managers that want to use Equity Index futures to replicate exposure to an index may buy futures contracts and use the residual capital for cash management purposes or alpha producing tactical strategies.

Another possible trading strategy is an index spread. Consider an index spread, specifically, spreading the NASDAQ-100 to the S&P 500.

Advantages of Index Spreads

Because spread trades involve both a long and a short position in highly correlated contracts, they are generally viewed as less volatile and therefore less risky than an outright position in a single contract. Additionally, since spread positions generally reflect lower market risk, there are lower margin requirements.

Example of an Index Spread

Let’s look at an example of a possible equity index spread. The NASDAQ-100 Index is heavily weighted to the technology sector. The S&P 500 Index, by contrast, is recognized as having a broad, diversified constituency and represents the broad market. What makes this type of trade possible is both of these indices, while slightly different, have a high degree of price correlation. In other words, they tend to trade directionally in a similar pattern.

In order to construct this spread, we must first calculate a Spread Ratio. The spread ratio is defined as the notional value of one index future divided by the notional value of another.

In this case, we will divide the notional value of the NASDAQ-100 futures by the notional value of the S&P 500 futures.

How the Trade Might Play Out

A portfolio manager (PM) believes the tech sector is at risk versus the broad market. He is willing to express this opinion with a $100 million equivalent risk position, leading the PM to take the following actions:

The PM sells the E-mini NASDAQ-100/E- mini S&P 500 spread. First calculating the spread ratio, the notional value of the NASDAQ Index equal to 4711.50 x $20 dollars, or $94,230 per contract divided by a notional value of E-mini S&P of 2093.00 x $50 or one $104,650 per contract. Our spread ratio, then, is equal to $94,230 ÷ $104,650 per contract. This comes to 0.9004 E-mini S&P 500 futures for every one E-mini NASDAQ-100 futures.

Divide the notional value of the E-mini NASDAQ-100 futures into the $100 million dollar risk assumption, and you get 1061 NASDAQ-100 futures contracts. Applying the spread ratio of 0.9004 to 1061 results in an equivalent E-mini S&P 500 futures position of 955 contracts. Since the trader believes the tech sector is overvalued versus the broad market, he will sell 1061 E-mini NASDAQ futures and simultaneously buy 955 E-mini S&P 500 futures.

At this point, the trader believes the valuations have normalized. Now, he simply unwinds the spread by executing orders opposite to the original trade. He would do this by purchasing E-mini NASDAQ futures and selling the E-mini S&P 500 futures.

If you have questions send me a message or schedule an online review .

Regards,
Peter Knight Advisor

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Disclosure