The Market Huddle You Can’t Model Inflation (guest: Warren Pies)
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Oct 5, 2024 
In this engaging talk, Warren Pies, the founder of 3Fourteen Research and a portfolio manager, sheds light on the unexpected impact of Fed rate cuts on bonds and commodities. He shares expert strategies for navigating oil markets using commitment of traders data. The conversation dives into inflation modeling complexities while exploring the evolving dynamics of the labor market and its influence on economic policies. Plus, there's a blend of personal anecdotes, including a nod to music, making for a lively and insightful discussion.
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COT Analysis
- Warren Pies uses the Commitment of Traders (COT) report to analyze the oil market.
- He adjusts short positions as a percentage of total open interest and considers anything above 28% excessive.
Trading with COT
- Don't simply fade extreme positionings in COT reports.
- Wait for an actual trend reversal before using COT data as a trading signal.
Fed Rate Cut Impact
- A Fed rate cut can negatively impact bonds while benefiting commodities.
- Warren Pies upgraded commodities and downgraded bonds on September 19, 2024.