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Trade view / 09 April 2018 at 6:37 GMT

Macro Monday Book: Tactical Long on S&P Futures #SaxoStrats

Global Macro Strategist / Saxo Bank Group - Singapore Hub
Singapore
Instrument: SPY:arcx
Price target: 2700
Market price: 2620
Background

Tactical long with the thesis that technicals are improving (back over 200D and closed above the key 2600 levels) and US earnings momentum will give US equities some needed momentum upwards - taking us out of the choppy range of the last few weeks... 

Long from 2620 in early Asia Monday, 9 April 18, targeting 33% at 2700 and 2750, and leaving the potential 3rd leg as an adhoc price level for now 

Management and risk description

Allocating 20% of capital to this trade or around $2m, a move below recent lows of around 2550 would potentially jeopardize this tactical bullish call. 

Key risks remain: Escalation in trade war fears between China and the US, further geopolitical risks (US / Syria / Russia) & of course poor earnings coming out of the US earning season 

Parameters

Entry: 2620 

Stop: Allocating 20% of capital to this trade, in this case $2m of the $10m Macro Monday
Portfolio. Those looking for a hard stop should consider 2550 (a touch above recent lows) which would be a -2.67%

Target: 1/3 at 2, 700, 1/3 at 27501/3 ad hoc

Time horizon:  One to four weeks 

— Edited by Adam Courtenay

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on TradingFloor.com is found here
1y
Coco84 Coco84
what does it mean when you say 1/3 at 2,700, 1/3 at 2750? Does it mean you will take profit for 1/3 of your position when the index hits 2,700 and leave the 2/3 of your position long?
1y
Kay Van-Petersen Kay Van-Petersen
Coco 84, exactly... I like to build a line in & out of positions...
1y
ChristianK ChristianK
Choppy action last night. Let's see which way we are heading today....I also favor an uptrend in the near to medium term
1y
ChristianK ChristianK
Coco 84. Another way would be to move your stop loss every time you hit one of the targets. Pros and cons...
1y
Kay Van-Petersen Kay Van-Petersen
Trade View Update (Wed 18 Apr 18):
On Monday 9 Apr 18, the MM book put on a controversial tactical long in the S&P futures, long from 2620, risk 2550 & tgting 2700/2750/adhoc in three clip.

The first leg in our tactical long S&P Futures hit at 2700 o/n, a +3% move.

This leaves a 2nd leg target 2750 & the last leg's tgt open for now

We move our stop from 2550 to our entry of 2620. Those looking for a wider stop can place it just below the 200DMA of 2600

The MM thesis of US equity melt-up driven by US erns season, continues to play out well. At the moment the 2750 / 2800 lvls is most likely where we will see congestion

Note this is also about level & time, i.e. getting to 2800 whilst erns are still on-going or getting to 2800 right when erns are coming to a finish are very different things…

We'd be looking to either exit the trade or move up our stops significantly if we get to the end of US erns without any of our targets being hit.

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