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ʎllǝuuop ʇuǝɹq Profile picture
ʎllǝuuop ʇuǝɹq
@donnelly_brent
President of @Spectra_Markets. Author of am/FX and Alpha Trader. I like trading, table tennis, my family, writing, hard/fast music, and poker. Not in that order
M Profile picture p rehmer Profile picture S Profile picture Nav Profile picture ashley chen Profile picture 7 subscribed
Apr 4, 2023 • 10 tweets • 3 min read
OK, I'll bite, Andy :]

Here's monthly SPX performance back to 1928, aggregate, and separated into two groups. One is before Halloween Effect was discovered (1986), and after. April outperforms in all cases. The sample size is 85 Aprils, pretty big. The reason is simple... The flows drive the price. Here are mutual flows by month. Again, the reason is simple. New year bonuses and tax refunds are the biggest non-paycheck household cash inflows. Average yearly tax refunds in US are $267B. Plenty of that goes into the stock market...
Apr 3, 2023 • 4 tweets • 1 min read
Magazine Cover Capital officially trades only covers of Time and The Economist ... but I'm asking the Investment Committee for a special exception here.

@leadlagreport Live portfolio update
Mar 30, 2023 • 5 tweets • 2 min read
There is no dedollarization happening. At all.

Here are the major currencies' share of global transactions since 1989.
Mar 30, 2023 • 11 tweets • 3 min read
To anyone who was not trading in 2004-2006 or 2011 or 201& … this dedollarization bullshit shows up every now and then.

Don’t worry—it’s pure engagement bait, mostly from people who know better.

I’ve linked articles from 2004, 2006, 2007, 2011 and money.cnn.com/2006/01/06/new…… twitter.com/i/web/status/1… PS: “gradually, then suddenly….” only sounds smart when Hemingway says it.
Mar 10, 2023 • 4 tweets • 1 min read
Cheer hedge When you cheer for a position or yell or sing or fist bump on the trading floor—watch out. Your P&L is about to crash. The reason I call it the Cheer Hedge is that when I was a manager...
Mar 9, 2023 • 4 tweets • 1 min read
What's that old Britney song? Starts with... "Oops?"

Today is a real-time example of how the expression: "The Fed will hike until something breaks" plays out.

Feels like stuff is finally breaking. The timing would be interesting because I have been reading many, many writeups in the past week or two explaining why Fed hikes don't impact the real economy as much anymore. Why Fed hikes don't matter this time. etc.
Feb 24, 2023 • 4 tweets • 1 min read
1/4
I'm agnostic on inflation here but you still think inflation comes down rest of year you could not ask for much better levels to put on short USD or long bonds. Every chart in FX is converging on huge levels. Here's USDJPY for example and two more charts in subtweets. Commodities are weak in February and thus the big inflationary impulse we saw in January could be a one off. Much of the high-frequency stuff reversed all the January move in prices. Lumber, wheat, oil, gas...
Jan 16, 2023 • 4 tweets • 2 min read
1/4
This quote from Reminiscences of a stock operator is a great one to keep in mind. It reminds me of 2007 and it reminds me of the current rally in stocks.

"I was nearly twenty-seven years old. I had been at the game twelve years... ... But the first time I traded because of a crisis that was still to come I found that I had been using a telescope. Between my first glimpse of the storm cloud and the time for cashing in on the big break the stretch was evidently so much greater than I had thought...
Jan 9, 2023 • 4 tweets • 1 min read
1/4
Many traders are too deterministic and dogmatic about their economic and market views. Especially on Twitter, because it rewards the more extreme and outrageous (usually bearish) points of view. I believe it's always better to think in probabilities.

Here is a good quote... ...from Bruce Kovner.

"One of the jobs of a good trader is to imagine alternative scenarios. I try to form many different mental pictures of what the world should be like and wait for one of them to be confirmed...
Nov 28, 2022 • 5 tweets • 1 min read
A few macro thoughts spinning around in my head this weekend.

1. SPX short squeeze to the 200 day again. Weakest shorts are out. Easy to risk manage a new short here.

2. Market trading “bad US data is good news.”

I doubt it.

Fed doesn’t have flexibility to cut right away… They will stay higher for longer as jobs data and CPI lag and they fight the last war.

NASDAQ didn’t find a bottom until after the Fed had cut 12 times in 2000/2002. This cycle feels similar to me.
Jul 22, 2022 • 16 tweets • 3 min read
Longish thread on the Coinbase insider trading story.

I don't do long threads, but I'm doing one here because there is so much to chew on and the complaint could have broad implications for crypto regulation.

sec.gov/litigation/com… This case is interesting as we get specific token-by-token reasoning from the SEC arguing why each of 9 crypto tokens are securities by law (list below).

This has broad implications for most crypto ex-BTC.

Bitcoin is ~100% NOT a security under the Howey Test
(FD:me not lawyer).
Mar 28, 2022 • 4 tweets • 1 min read
1/4
 The decline of USD reserve status is a slow process that MAY be relevant to XAU or BTC but is barely relevant to the price of the dollar on any investable or tradeable time horizon. This paper captures it.
imf.org/en/Publication… 2/4
 Key term "Stealth erosion". There are 3 camps: 1) USD doom, 2) King USD and 3) stealth erosion. I'm in camp 3. The USD goes up and down for many reasons ... Reserve status is a multi-decade story that barely moves the needle. You can see this in the price of the USD (it DGAF)
Feb 1, 2022 • 5 tweets • 1 min read
Popularity of the name Elsa
Jan 28, 2022 • 6 tweets • 2 min read
Using Bloomberg function CFND (correlation finder) ... here are the assets with the highest 30-day correlation to BTC right now Same thing, 90-day lookback
Jan 17, 2022 • 4 tweets • 2 min read
Doing some research on Canada and found this interesting, so thought I'd share. Thoughts on possible implications going forward are welcome, especially from Ottawa legend @EconguyRosie Canadian immigration has remained strong despite COVID while death rates from the pandemic have been about 1/3 of those in the US. These are the obvious explanations but I'm sure there are many others.
Jan 5, 2022 • 4 tweets • 1 min read
QT is back. 2018 equity scars: Still visible!

Key excerpts:

“the appropriate pace of balance sheet runoff would likely be faster than it was during the previous normalization episode”

"Some observed that the balance sheet could potentially shrink faster than last time..." "the appropriate timing of balance sheet runoff would likely be closer to that of policy rate liftoff than in the Committee’s previous experience. They noted that current conditions included a stronger economic outlook, higher inflation, and a larger balance sheet..."
Dec 3, 2021 • 4 tweets • 1 min read
How ludicrous is current monetary policy? Very.

The x-axis is unemployment rate, the y-axis is inflation, and the size of the bubble shows the Fed Funds rate. That is, a large bubble means the Fed Funds rate is high and small means it’s low. Red bubble is current policy. Small bubbles should be policy in the bottom right corner (low inflation, high UR). Not upper left!!! Policy is consistent with an unemployment rate around 9% or 10% and CPI below 3%. Bonkers.
Nov 24, 2021 • 4 tweets • 2 min read
Much in the way weak USD and Fed easing is bullish crypto, this hawkish Fed capitulation is bearish crypto.

Structural🚀markets still have massive ↓ cycles.

Chart: BTC YoY return (lighter line, left y-axis) and JPEMFX YoY (darker line, right y-axis). ↓EMFX is same as ↑USD. Also note we are in the worst part of the 4-year bitcoin halving cycle. Here's a chart of the three main halving cycles. Each halving cycle has been progressively less bullish in magnitude. That is part of why the residual from the Plan B model gets bigger and bigger. @profplum99
Oct 21, 2021 • 4 tweets • 1 min read
1/2
Wall Street's adoption of BTC reminds me of how I felt when first skateboarding, then grunge, then EDM were co-opted by the corporate machine. Can something be Good and fully co-opted by the machine… At the same time? Maybe! 2/2
Can bitcoin make the world better, and also be fully financialized and co-opted by Wall Street? Maybe! Probably!

"The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function."
- Fitzgerald
Oct 18, 2021 • 5 tweets • 2 min read
1/3
Every one one of these highly-publicized BTC ripper events has been a short-term buy the rumor / sell the fact (e.g., launch of BTC futures 2017, Coinbase IPO, Elon on SNL 2021, BTC day in El Salvador…)

I don’t see why this one should be different.

Three charts + more... 2/3
There is a massive wall of leveraged spec money front-running the ETF launch and the product is likely to meet limp demand. This ETF is a distraction for anyone that really cares about bitcoin and it’s a trap for any short-term trader expecting huge inflows.
Oct 14, 2021 • 4 tweets • 1 min read
1/3
AUDJPY and BTC still both risky assets and somewhat joined at the hip with BTC leading more often and AUDJPY lagging.

Blue line is bitcoin, black is AUDJPY. Hourly since late August... 2/3
Hourly back to late 2020