Defeating the Discombobulating Dialectic: Or, Just Trade the Damn Thing! Part II.

At the AXIA trading desks.
Tuesday 19th November 2024,
London, England.

Read Part I Here.

“Then Spoos put in a new high. Maybe fading geopolitical risk isn’t the worst idea in the world,” said this trader. “But I’m not so confident in fading nuclear war just yet.” Fading nuclear war? Win-win all round! You retire or get retired. Ah! Good old perverse incentives—the Fed Put was so last decade…

And now I’m speaking with another young buck at his desk on AXIA’s London floor, who netted shy of six-figures on yesterday’s events; another perspective on Tuesday 19 November. Pan left, and you spot the usual assortment of a dozen monitors, containing X feeds, news terminals; yet the rest of the screens are absolutely pasted with price ladders—everywhere! And unlike the Cypriot’s comparatively sleek machine, these ladders are all different shapes, sizes, and colours. Damn, why didn’t I think of doing this too…

Yes! This late twenty-year-old is your classic news trader—who survived his initial years on strict discipline of trading nothing else. But pan further left across his screens and spot the unusual market profile charts. Unusual for a ‘news trader,’ that is, or what they typically assume that to be. So this is an obvious symptom of more profound, deeper change within this trader—and a marker of where he is going next, and perhaps our profession too.

So, early European morning, Tuesday 19: then came the fade. Half-clips all round—short Bunds, long S&P— get a feel for the market on lower risk. This was the modus operandi, our young trader said, of most of the floor on the update of Russia’s Nuclear Doctrine.

But then!— (‘Ukraine Made Their First ATAMCS Strike Inside Russia’) This is it!—real risk-off flows! Short S&P two clips; short Euro a clip; long Yen a clip; long Gold two clips. Yet: focus on the S&P, it's ripe to go.

But the ol’ Spoo, is stuck— C’mon! It has to go! Dax is straight-lining, Bund is ripping—C’mon Spoos! It has to! The collective lamentations of the traders start to build—wake up man!—then more swearing and shouting. Just go! If this DAX turns, and I’m holding this Spoo; I’m screwed… the minutes feel like hours, but the S&P holds and holds. Our trader glances left to the S&P’s profile. Look there’s this inside day… and we failed up there, and rolled over down here… this is going to play out! It will come down here! Clear targets, clear idea: conviction holds.