August 2nd, 2024
The macro traders will now debate whether the Fed waited too long to cut rates and the whole list of mistakes they made or other reasons we’re seeing soft data. For day traders, a macro theme is important. From where I sit, what has changed is the chase. We’ve been chasing higher in Equities, and now we’re chasing higher in Bonds/Treasuries, and likely Gold.
For myself and other day traders, I see this shift in macro themes as a way to adjust my position sizing. The equity rally is far from over in my opinion, but chasing higher rallies is likely done for the short term. This tells me I can take short-term trade opportunities on both sides of the tape during the day. It remains a two-way tape, and I expect wild swings in both directions.
For gold and treasuries, they likely have a bid under them, and I will look to use buy signals to participate in those rallies and stay away from short signals.
To say macro doesn’t matter is not an open-minded approach because it does matter, even to day traders. It matters in the sense of understanding the environment. You don’t need to be an expert; I am far from a macro expert, but I understand the impact it will have on my trading.
Don’t overwhelm yourself with all the news, which there will be an abundance of. Macro traders with subs are like attorneys; we need them to understand things that are above our pay grade, but they have to keep themselves relevant when things change so they talk more than they need to.
Today is my last day for at least a week as I head up to Lake Burton, GA for the month of August. I will continue to work while I’m up there, but next week, I will be taking time off. Stick to your strategies, don’t overtrade, and slow things down. You have time; there’s no need to be in a hurry in this market.
For a deeper dive into the charts for ES, NQ, RTY, and Gold, I explained all of my thoughts in a livestream yesterday on Develop Your Edge. Here is the link to check it out: https://www.youtube.com/live/BLDworqA3Gk?si=1k2VlWxV14uJychN.
Wishing you all a wonderful weekend!
Cheers,
DELI
