Last week, the Pound suffered its steepest daily fall of 2017 after a shock election result denied any party a majority in parliament days before Brexit negotiations begin.
Source: The Telegraph
Thankfully, our Synapse Network came fully prepared to profit from this move! 😀
Here is a highlight of the early prediction given by Spencer several days before the sharp plunge:
While waiting to short Gold, we took a short-term long trade to make some quick bucks on the side.
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Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.
https://synapsetrading.com/wp-content/uploads/2017/06/synapse-network-trade-results-1-110617.png738503Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2017-06-11 04:35:242022-03-07 16:29:57GBP/USD – Predicting the Big Short (And Cashing Out Big Profits on it!)
Announcement: I will be taking a long break to focus on my trading and coaching of existing students (as well as several new exciting projects), but before that I will be conducting one last session of the “Trading Foundation workshop” on 18 May 2017 and the last run this quarter of the “Trading Mastery Program” on 27 & 28 May 2017.
During the last “Trading Foundation Workshop”, we scanned various forex charts and discovered this short trade in GBP/JPY to be the best setup, and I took the live trade on the spot, together with many of the audience members.
And although I only took a small position of 0.50 lots, this trade shows that times and patience can snowball your returns, as long as you just “forget about it” and let the trade run its natural course.
During my final workshop tomorrow, I will be scanning all the charts for such good trades, and I have already spotted some juicy trades tonight while browsing through my charts.
Looking forward to share more tomorrow! 😀
P.S. I will be taking a long break to focus on my trading and coaching of existing students (as well as several new exciting projects), but before that I will be conducting one last session of the “Trading Foundation workshop” on 18 May 2017 and the last run this quarter of the “Trading Mastery Program” on 27 & 28 May 2017.
Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.
https://synapsetrading.com/wp-content/uploads/2017/05/2017-05-17-23.21.17.png1334750Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2017-05-18 04:33:142022-03-07 16:51:18Live Trade Follow-up: GBP/JPY Short Trade US$1086 in the Money!
It has been a while since my last update on the Singapore markets (as well as my SG portfolio holdings), largely because the market doesn’t move much, so I only check on them once in a while.
Interestingly, I noticed that the STI has had an impressive run, coming off a low of 25xx to break past the 3000 level in the past few months. However, is this move sustainable?
Taking a closer look at this weekly chart which shows the historical prices over the last 20 years or so, one thing which stands out is that the market has been in a 7 YEAR sideways stagnation.
If we look back at the whole history of the index, this is somewhat unprecedented.
Which could explain why popularity in this market (as well as trading volumes) has been waning. In short, it does seem like a dying market.
Not to mention that during this same time period, the US stock markets have been steadily creeping up.
If we look at the most recent red shaded circle, that is where the current price is, and it seems to be running into massive headwinds. This means that the potential upside could be quite limited.
If we observe the large sideways range that prices have been moving in, the price is now at the top of the range. And we know that the best strategy in a range is to “buy low, sell high”, which means that the odds do not favour much more upside, unless there is some new strong positive price catalyst.
However, a cursory glance at recent news headlines seems to be painting a rather gloomy picture, with muted growth forecasts and ominous employment statistics. This tell me that downside catalysts are more likely that upside ones. In other words, there is more chance of a negative shock rather than a positive shock for prices.
In light of all these factors, I am planning to cash out most or all of my profits, and wait for more favourable odds to redeploy my capital. As a trader and investor, timing is always key.
Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.
https://synapsetrading.com/wp-content/uploads/2017/05/straits-times-index-sti-140517.png10041697Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2017-05-14 06:57:272022-03-07 16:51:55Why I am Planning to Liquidate my Full Portfolio of Singapore Stocks
Announcement: On the next 2 Thursdays (11 & 18 May 2017), I will be conducting the last and final run of the “Trading Foundation Workshop”, after which I will be taking a break from training to work on a new big and exciting project. Don’t miss this last chance to catch me live!
The French election has been a hot topic among financial news outlets, but the hype around it doesn’t yet compare to that of Donald Trump last year.
It was a historic event that saw a roller-coaster in the markets during the exciting vote tallying nail-biter.
Here was how the USDJPY currency pair reacted as the votes were being counted. In the first 5 hours, Hillary was ahead in vote count and the USDJPY fell drastically. But as time went by, the USDJPY rose almost non-stop for 1 month.
The USDJPY currency pair 5 hours, 17 hours, and 3 days after the election outcome in the U.S.
In spite of the hype surrounding this event, it is unlikely to be as epic as Trump vs Clinton. France is indeed heading into the most unpredictable presidential election in decades; it is going to affect the EU’s second largest economy, but possibly also the direction of the EU itself. All eyes will be on the Euro currency and it is likely to be heavily traded during the announcement itself.
Here’s What You Need to Know
The First Stage of Voting: A candidate can theoretically win through primary contests, known as the first round of voting. He can actually win an election by securing 50% of the votes in this round, where mayors and other officials will vote, but this has not happened since the 1960s.
Two Weeks After the First Ballot: The first round vote took place on 23rd April, leaving two remaining candidates, while the second round will take play on 7th May. After 7th May, French voters will again vote on 11th June and 18th June to elect members of the National Assembly.
Young centrist Macron and populist right-wing Marine Le Pen. Image Source: trbimg.com
No-Show: More than 22% of voters abstained from voting, the highest since 2002, which is worrying because Macron won 24% while Le Pen won 21.3% of the vote. The progress of the election has been said to mirror that of America last year.
Macron – Frexit-Advocate with Leftist Undertones
Macron recently warned the EU that it must change, or a Frexit, just like Brexit, would be soon to follow. However, he has carefully treaded between being a social support advocate and being market-friendly, a promise that is probably very challenging to deliver.
Working Hours: Re-evaluating the 35-hour work week, retirement ages
EU Policy: Suggesting that stronger nations within the eurozone engage in financial equalization (this is probably going to be done through budget transfers)
He also promises to “transform and not reform” France, and he has also promised to help a million jobless people find jobs. Among his other promises include removing the huge difference in public and private sector pensions.
The French are not happy with the current president, François Hollande, who chose to not run for reelection. Hollande belongs to the Socialists party, but the nominee of his party only garnered less than 7% of votes in a five-party race. At this point, the polls overwhelmingly show preference for Macron, but given the surprising situation in Brexit and the recent U.S election, uncertainty is likely to plague the minds of citizens and fund managers around the world.
Marine Le Pen – The Trump of France?
Recent polls project that Marine Le Pen isn’t expected to become president. However, she seems to represent the wave of populism sweeping across Europe, and a Le Pen victory
Polls show that the poor prefer Le Pen. Image Source: Telegraph.co.uk
While there are many articles discussing Le Pen’s policies and how they will affect the nation of France, we can view Le Pen’s proposals as being nationalist and protectionist.
Stimulating Economic Growth: Government-led improvements in national industries
Reduce Bureaucracy: Reduce the size of government and wasteful welfare spending
Border Control: France to retake control of its borders
Currency Control: Reintroduce the French franc, to be used in circulation alongside the Euro
This resonates strongly with working class voters (I almost seem to be writing about the U.S election), for France has been plagued by high taxes and unemployment for years. She looks like the change that the average citizen is looking for.
The Uncertainty Ahead – What Traders Can Do
It is sad that the streets of Paris saw several clashes, and police officers were called to the scene. Three police officers were injured by petrol bombs thrown by rioters, and the police was forced to use tear gas on the demonstrators. It is strangely similar to the violence that surrounded Trump’s victory, but no one can conclude that this is definitely going to happen.
What’s certain is that volatility surrounding the election is going to be high, and several brokers have raised trading margin requirements ahead of the election. In any case, it would be wise to close out your trades and look to re-enter after the volatility. If you have longer-term positions, holding on to them may be a good idea because the market is unlikely to be as volatile as that of the U.S last year, and you are likely to remain unscathed.
Close out short-term positions, and look to re-enter after the volatility has ended.
Experienced traders can trade small and look for trend-following entries during the event, as forex markets might have prolonged directional bias. Watch closely how price behaves after any initial knee-jerk reaction.
Beginning traders are advised to stay away from trading during the election results announcement time.
P.S. On the next 2 Thursdays (11 & 18 May 2017), I will be conducting the last and final run of the “Trading Foundation Workshop”, after which I will be taking a break from training to work on a new big and exciting project. Don’t miss this last chance to catch me live!
Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.
https://synapsetrading.com/wp-content/uploads/2017/05/1.jpg13132048Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2017-05-06 06:55:452022-03-07 16:43:34Here’s How I Would Trade the Upcoming French Elections
Bloomberg recently did a good cover on what hedge fund managers are looking out for in 2017. The general consensus is clear; the market is uncertain, and world events are causing markets to react in unexpected ways.
“You’re going to have to take way more risk today in order to try to make outsize gains versus a year ago,” -Hanif Mamdani, PH&N Absolute Return Fund
I found the article to be pretty insightful, with a handful of key take-aways. To make it easier for my readers, I’ve broken up the article into easy-to-digest sections, and added some charts and examples to make it clearer. Here we go:
1. Distressed Energy Companies
Hedge funds specializing in purchasing companies that are on the verge of collapse, actually profited from the rise in oil prices last year. Companies that were in the red started to turn profitable, and after purchasing companies at ultra-cheap prices, these assets were starting to bring in significant capital gains for hedge funds. Even though oil has risen significantly, hedge fund managers still see the potential for more gains.
It’s interesting to look at the related ETFs for oil and gas companies. I’ve pulled out 2 charts of U.S Oil & Gas company ETFs (XES and IEO). The gains over the year are impressive.
The charts above summarize the oil and gas sector for the year of 2016.
On the technical side, the Oil & Gas sector is still on an uptrend. It is prudent to remain bullish when the market is still trending up. It’s interesting that XES has broken out of a wedge, and looks to be gathering bullish momentum.
In the longer term, oil & gas companies seem to be picking up momentum.
A few weeks ago, I was invited to give a talk at the Singapore Stock Exchange (SGX) on the Offshore & Marine sector, and Keppel Corp was one of our top picks.
2. “Global Macro Deceleration”
Some hedge fund managers are positioning themselves for the worst. For example, a border tax in the U.S could “cause a global depression and a major equity market decline,” says Carlson Capital’s Black Diamond Thematic Fund. They’re waiting for commodities to “correct meaningfully” (meaning a decline in commodity prices), and looking to scoop up good stocks at the bottom of the market decline.
Traditionally, sector rotation strategists have sworn by investing in stocks like semiconductors, industrials and miners during full-blown bear markets. These stocks are famous for having high volatility and are not for the faint-hearted. A famous example, Caterpillar Inc, is shown below:
Heavy industrials like Caterpillar Inc tend to move cyclically with the economy. Notice the 6 big swing it has had since 2012!
3. Long High-Yield Corporate Bonds Amidst Rising Interest Rates
Some hedge funds are betting on higher-yield corporate bonds rising during this period. High-yield bonds typically have both a short maturity and high coupon rate. With interest rates expected to rise in the coming decade, bond prices are likely to fall and bond holders will actually be worse off (Economics 101!). However, with the shorter maturity, higher-yield corporate bonds become more attractive as they are less exposed to the beating by rising interest rates. Bearing in mind these ideas, it is understandable why these have been attractive to institutional investors in the past year.
I’ve inserted a little-known ETF, “HYG”, a high-yield corporate bond ETF that tracks the prices of high-yield corporate bonds. You can see that the bear trend sharply reversed at the turn of 2016 and has been rising steadily since. The uptrend is still in force, and some hedge fund managers are looking to speculate on a variety of interest-rate products.
What They’re Saying:
In summary, what we notice to be the consensus about the market in 2017 is this:
Heightened interest rate, inflation rate, and economic volatility
Renewed interest in unconventional investment strategies
That being said, it’s important to keep yourself updated and continually learning about financial markets. In such a unique market climate, it would serve you well to continue reading up and knowing what market participants are paying attention to.
Want to Learn How to Tackle the Markets?
Join us for a 3-hour intensive “Trading Foundation Workshop” where you will learn all the necessary skills, and witness firsthand live trading, where many of our new attendees managed to make some profits from their very first trade! 😀
Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.
https://synapsetrading.com/wp-content/uploads/2017/03/top-hedge-funds.jpg330600Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2017-03-08 02:22:072022-03-07 16:46:04The Top Hedge Funds of 2016 Share Their Best Bets for This Year (With New Charts & Examples)
Source: The Telegraph
