Bigger Market View With Commodities, Countries

2021-04-28

The Fed held its ground Wednesday, the economy is gaining steam, and major tickers are continuing to report positive earnings after the first quarter.

Add in a dash of inflation and spicy news of capital gains tax increases ahead (and the president’s national address), and this choppy market is a recipe for a trading upset stomach — all twisted in knots.

Is there a soothing strategy for traders?

Sometimes it helps to step back and take a look at the market from a macro view.

This could lead to a new batch of ideas and methods to add to the trading plan.

One macro view is to consider commodities and countries (currencies).

This view can be as simple as asking, “What’s hot right now?”

A couple of heated-up commodities include lumber and crude oil. Demand has increased their value and that demand looks strong for the near future.

Follow the commodity for the answer to the follow-on question, “Which country (currency) benefits from this valued commodity?” Answer in this example: Canada.

This macro view opens up ideas and trading methods, like trend-following swing trades in futures, to incorporate into a trading plan and take advantage of any opportunities. The focus is to look for trades surrounding a nation’s currency and related market assets.

Understanding the bigger picture and working through the possibilities can be a path to high-probability trades in higher profit potential markets. This can lead to opportunities in markets where others haven’t caught on to the trend. Find out more about similar “sector secrets.”

We Saw: Markets unsure of earnings reports, Fed plans — 

  • Big Tech continuing to roll out big earnings
  • Governments mixed on cryptocurrency future
  • Capital gains tax increase looming large

We’re Watching: Market sideways, holding in “waiting mode” —

  • Market-moving stocks that didn’t boost markets
  • Limiting risk, not chasing luke-warm plays
  • Setups in: ZM, SNAP, FB, WDAY, RBLX