How about some trade ideas. Right now, most outright stuff is just a punt on the direction of the S&P/Eurostoxx. Commodities, EU currencies, stock indices, Treasuries, all moving pretty much in lockstep.
So, the better way to add real alpha is in spread trades or special situations IMO. Here are a few:
long EUR/CHF - pretty simple one-way bet, the SNB says they will buy the worlds Euros at 1.20, and print ad infinitum to fund it. Downside 3.5 handles, upside at least double that amount, and it's quite possible the cross returns to PPP fair value, which is much, much higher. Meanwhile, you get paid positive carry to hold the position. Effectively it is a zero premium long-dated option. If the trade goes wrong, it will become obvious when the SNB is going to throw in the towel, and you just pitch out at 1.20 then reverse if it starts trading 1.19, 1.18 etc.
Long gold, short silver, on a volatility-weighted ratio. Another simple trade - gold gets some kind of crisis bid, silver doesn't get as much of one. Silver is more weighted to industrial demand, which falls in a recession or market panic; gold is more weighted to fear about financial system solvency, which rises in a recession or market panic. Even if gold collapses like late 2008, silver will get crushed even more.
Short Eurostoxx, long AAPL. Another simple play - AAPL is cheap, the fundamentals are great, and the market action has been consistently bullish; Eurostoxx is also cheap but the fundies suck and the market action is terrible.
Long Eurostoxx puts. It's a bear market, macro picture is horrible, blah blah. Own December expiry puts, betting on a crash into October/November. Ok, this is a pure directional punt, but looks pretty good IMO.
Any other ideas?
So, the better way to add real alpha is in spread trades or special situations IMO. Here are a few:
long EUR/CHF - pretty simple one-way bet, the SNB says they will buy the worlds Euros at 1.20, and print ad infinitum to fund it. Downside 3.5 handles, upside at least double that amount, and it's quite possible the cross returns to PPP fair value, which is much, much higher. Meanwhile, you get paid positive carry to hold the position. Effectively it is a zero premium long-dated option. If the trade goes wrong, it will become obvious when the SNB is going to throw in the towel, and you just pitch out at 1.20 then reverse if it starts trading 1.19, 1.18 etc.
Long gold, short silver, on a volatility-weighted ratio. Another simple trade - gold gets some kind of crisis bid, silver doesn't get as much of one. Silver is more weighted to industrial demand, which falls in a recession or market panic; gold is more weighted to fear about financial system solvency, which rises in a recession or market panic. Even if gold collapses like late 2008, silver will get crushed even more.
Short Eurostoxx, long AAPL. Another simple play - AAPL is cheap, the fundamentals are great, and the market action has been consistently bullish; Eurostoxx is also cheap but the fundies suck and the market action is terrible.
Long Eurostoxx puts. It's a bear market, macro picture is horrible, blah blah. Own December expiry puts, betting on a crash into October/November. Ok, this is a pure directional punt, but looks pretty good IMO.
Any other ideas?