What To Trade, When To Trade Intermarket Analysis
What To Trade, When To Trade Intermarket Analysis
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MARKET OUTLOOK
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Lower gasoline
price reduces
transportation &
production cost
Japan import
almost 100% Lower cost
of its oil. As reduces the price
crude price of Japanese
falls, gasoline exports
price also
falls.
Lower price
attracts more
imports &
increases demand
for Japanese Yen
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LOWER
DOMESTIC
PRICE
HIGHER LOWER
EXCHANGE INFLATION
LOWER HIGHER
STOCK EXPORT
VALUE PRICE
LOWER
REVENUE
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CYCLE OF
BOOM & BUST
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BUSINESS CYCLE
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EARLY EXPANSION SLOWDOWN RECESSION
RECOVERY
•LEADING
•RISING INTEREST •LEADING •UNEMPLOYMENT
INDICATORS RISING
RATE INDICATORS START RISING STRONGLY
•INVENTORIES
•SLOWDOWN IN TO DROP •NEGATIVE GDP
DROPPING
CONSUMER •DROP IN GROWTH & FALLING
•STOCKS CONFIDENCE & CONSUMER INFLATION
OUTPERFORM INDUSTRIAL CONFIDENCE & •BONDS
BONDS PRODUCTION INDUSTRIAL OUTPERFORM
•CONSUMER •STOCKS CONTINUE PRODUCTION STOCKS
CONFIDENCE & OUTPERFORM •BONDS BECOMING
INDUSTRIAL BONDS MORE APPEALING
PRODUCTION
STRONG
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CORRELATED CENTRAL
SURVEYS POLICY DATA
DATA BANK POLICY
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GLOBALIZATION & TECHNOLOGY
11
THE PLAZA ACCORD
• GLOBALIZATION VS SOVEREIGNITY
12
TECHNOLOGICAL ADVANCEMENT &
FINANCIAL INSTITUTION
1920- • OFFICE
1950 EQUIPMENT
1950- • MAINFRAME
COMPUTERS
1980
• DIGITAL
1980- GLOBALIZATION
NOW • BLOCKCHAIN
TECHNOLOGY
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GLOBAL INTERNATIONAL MARKET
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MONEY
MARKET
RATE
ECONOMIC ECONOMIC
POLICY ACTIVITY
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FINANCIAL FINANCIAL
INSTRUMENTS INSTRUMENTS
FINANCIAL
MARKET
INVESTORS / LENDERS /
CREDITORS DEBTORS
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FINANCIAL
MARKET
CAPITAL
COMMODITY DERIVATIVES CURRENCY INSURANCE
MARKET
BOND EQUITY
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BOND MARKET
• FINANCING THROUGH DEBT
ISSUANCE & TRADING
STOCK MARKET
• FINANCING THROUGH ISSUANCE
OF EQUITY & TRADING
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CALL
MONEY
MONEY
MARKET
INTERBANK
MARKET
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COMMODITY MARKET
CRUDE OIL COFFEE GOLD
• WTi & BRENT • 2ND MOST TRADED • INVESTMENT, JEWELRY &
COMMODITY (OVER $100B) MANUFACTURING
• GEOPOLITICAL &
ECONOMIC EVENTS • GEOPOLITICAL INSTABILITY • CENTRAL BANK RESERVES
(BRAZIL, VIETNAM &
• US STOCKPILES COLOMBIA) • US POLITICAL
UNCERTAINTY
• OPEC • CLIMATE
• INTEREST RATE
• NATURAL DISASTER • ENTERPRISE TRADING
(KRAFT, P&G, SARA LEE & • JEWELRY & INDUSTRIAL
NESTLE) DEMAND
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ETF
EXCHANGE-
FUTURES
TRADED
OPTIONS
DERIVATIVES
MARKET FORWARDS
OVER-THE-
SWAPS
COUNTER
CREDIT
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• LARGEST & MOST LIQUID
MARKET
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POLICY POLICY
INSURANCE
MARKET
INSURERS POLICYHOLDERS
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PRICE & VALUE OF
FINANCIAL SECURITIES
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DEMAND
SUPPLY
GROWTH
SENTIMENT
POLITIC
ECONOMIC
POLICY
INFLATION
PRICE
SUPPLY &
DEMAND
YIELD & RISK
27
CARRY TRADE
• YIELD DIFFERENTIALS
• APPRECIATION/DEPRECIATION OF
DIFFERENTIALS
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CURRENCY
DIVIDEND
YIELDING
SECURITIES
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RISK RISK
APPETITE AVERSION
YIELD SAFETY OF
SEEKING FUND
CARRY CARRY
TRADE TRADE
INTENSIFIES UNWINDING
S
E
N
T MARKET
THEMES I
M DATA
E
N
T
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CENTRAL BANKS
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GOVERNMENT CENTRAL BANK CITIZENS
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POLICY MAKERS
MARKET PARTICIPATION
TRADING OPPORTUNITY
ANTICIPATION REACTION
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MARKET TYPE ANALYSIS
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DIRECTION
MARKET
TYPE
PRICE
VOLATILITY
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WHICH SECURITY IS MOVING?
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LIQUIDITY
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RISK LIQUIDITY
YIELD
1045-1115
8.00 AM 2.30-3.15 PM 4.00 PM 8.20-8.40 PM 900-930 PM 9.30 PM 2.00 AM
PM
• TOKYO • NEW
• NEW • DAILY
MONEY • PRE • LONDON • PRE NEW YORK • MONEY
SESSION YORK SPOT
LONDON OPEN YORK MONEY EXITS
OPEN TRADE
FLOW
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COST OF FUNDING & RISK FACTORS
• GLOBAL MARKET: MOVEMENT OF INVESTMENT FUND ACROSS
BORDER
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POSITIVE NEGATIVE
SENTIMENT SENTIMENT
LOW HIGHER
LIBOR LIBOR
LOW HIGHER
FUNDING FUNDING
COST COST
SIGNIFICANCE
• MOVEMENT OF FUNDS
- COST OF FUNDING
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INTERMARKET STRATEGY
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COMMON MARKET CORRELATION
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YIELD RISK LIQUIDITY
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DEPOSIT
WITHDRAWAL
INTER
POSITION INTRADAY MARKET
SECURITY NEWS TRADE XMP
TRADE TRADE MONEY
HEDGE TRADE
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TAKE HOME EXERCISE
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SELF PREPARATION
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SELF PREPARATION
HOW DO YOU DESCRIBE YOURSELF FINANCIALLY?
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TRADING OBJECTIVES
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TRADING OBJECTIVES
- THE PERCENTAGE/AMOUNT OF
DRAWDOWN WHERE YOU CAN NO LONGER
CONTINUE TRADING
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COMPELLING MARKET
MODEL FORMATION
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COMPELLING MARKET MODEL
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INVEST IN A SYSTEM,
TRADE YOUR SYSTEM
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Q&A SESSION
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