Shots Worth Taking: Positioning and Two Trades for the Week Ahead

Positioning is giving us new trade opportunities as the macro landscape is shifting.

Markets are moving, and the macro landscape is shifting.

With that in mind, let’s break down the opportunities and risks shaping up across positioning, liquidity, fundamentals… and key markets like soybeans, energy, and the dollar.

Positioning: Retail traders are underweight stocks, but active managers and speculators are sitting neutral. Speculators are underweight Treasuries, overweight the US dollar, and underweight on commodities. (Considering that commodities are leading YTD this is another positive for commodities)

Oil (CL) is leading the way followed by Natural Gas (NG) and Energy (XLE)…

Big Picture (Positioning): Overall, positioning suggests the risk of a correction in risk assets is low in the short to medium term and commodities have more upside than downside risk ahead.

Finally, bonds could bounce here.

But the Dollar is the 🔑

The US Dollar is running the show when it comes to global liquidity. Its strength is tied to long-term nominal interest rate differentials, making it the key driver to watch.