Top Trade Ideas - January 8th

A complete rundown of ideas across global markets to get you started this week.

The first week of market trading this year goes into the books.

Traders betting on a bond rally in 2024 are unconcerned by the drop last week, viewing it as an opportunity to take advantage of elevated yields before the Federal Reserve begins bringing down interest rates.

“Anything between 4% and 4.2% is a buy” for the 10-year, said Priya Misra, portfolio manager at JPMorgan Asset Management, noting that the yield was at the upper end of that range ahead of the last Fed meeting. “For 4.2% to break, we have to bring hikes back in or take out overall cuts.”

In G10 FX, the year started fairly slowly but kicked into life following the US employment data on Friday. The weaker USD reaction surprised us, sending bond yields higher.

Equities

Materials (XLB) have finished 2023 near highs after a Q4 rally. Alongside the Materials move higher, we have coal mining stocks. One name on our radar is NYSE: ARCH.

Arch Resources, previously known as Arch Coal, is an American coal mining and processing company. The company mines, processes, and markets bituminous and sub-bituminous coal with low sulfur content in the United States. Arch Resources is the second-largest coal supplier in the United States, behind Peabody Energy.

Last week saw the highest weekly closing price, right above a key resistance of $175. A higher break is possible if price can get through the overhead supply.

TRADE IDEA - ARCH MOVE TO ATH

Entry: 175.50

Stop Loss: 165.00

Take Profit: 200.00

Our next trade idea focuses on one of the key events: CPI.

Estimates are more spread (a range of 3.1% to 3.4%) than the previous print in December. This will set up a good straddle or strangle option play on SPX. We cannot highlight what strikes we will be watching as data is due on Thursday, but keep an eye on our Chat feature for more info on this play.

TRADE IDEA - THURSDAY 0DTE SPX STRADDLE/STRANGLE

As always, we continue with more ideas ahead of a fresh week in global markets. Equity longs and shorts, news plays, currency markets, indices and commodities. There is plenty on the agenda.

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