We probably reached a short-term bottom yesterday, I didnt deploy all my dry power but its fine. It never reached the absolutely ridiculous levels of 2350-2400 support. But its possible that the rally will last a while and then tank to new lows. Heck I hope so, I want to be long big time if it does
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Global Macro Trading Journal
- Thread starter Daal
- Start date
We probably reached a short-term bottom yesterday, I didnt deploy all my dry power but its fine. It never reached the absolutely ridiculous levels of 2350-2400 support. But its possible that the rally will last a while and then tank to new lows. Heck I hope so, I want to be long big time if it does
NQ actually pierced the mid-2019 low overnight - though I suspect it will be properly tested in cash in the days and weeks to come.
The bull might be over by the arbitrary 20% definition but the relative strength hierarchy remains intact, with tech leading large caps leading small caps. IMO a tell as to what will do best going forward; as a rule, when going long I want to be long the strongest symbols.
China reported 11 new cases for Friday, South Korea 214, HK 1, Macao 0. Looks like the conspiracy theorists will have to expand the list of countries that they are 'certain' that are lying about the data. The asians have laid out the path towards controlling this. Their masks use is completely rational (despite what the US surgeon general says). Its a form of social signaling and makes people take the threat be taken more seriously (they learned from SARS). Then its just a matter of one 30 vaccines that are being worked on, working. In 6 months I dont think this will be a big deal anymore. Markets probably gap down next week and I'm hoping for a 2400 test and even a break (one can only dream of buying stuff at 2200 SPX) to finishing my buying
I made a mistake today, I should have taken a short/hedge on ES at the 2700 ramp. It was a decent r/r. 2750 stop with potential drop back to 2500, maybe lower. 50 risk 200+ reward. I need to be faster on this stuff. These prices dont last very long. When the Fed cut SPX jumped to over 3100 but only briefly. Same thing with the NYFED $1.5T bazooka. markets pumped to 2650 and then right back to lows. But you have like 5 mins to react to it, if that
Well, if that happens I'm going to have a bigger drawdown cuz I will be fully invested by -35%. But I'm not too worried about that Japan scenario, if 2008/2009 didnt cause that, why would this do it? As I said, banks are well capitalized now and the Fed will print a lot. In addition, there is an extra margin of safety by the fact that I'm using BRKB, which has plenty of cash and they own the best most resilient companies. I mean, Buffett was buying back stock as high as $224. They are supposed to be the best investors and they thought there was value there.
The US economy is very resilient, I wouldn't be betting against them
@Daal I'd be careful looking at the cash value of BRKB as using that as a bottom. It's only about 40-50 per share of BRKB, so if you say 2x cash as an absolute worst case scenario, there's a lot of room between 80-100 to BRKB's current ~180.
All I'm saying is there are drawdowns and then there are "drawdowns".
All I'm saying is there are drawdowns and then there are "drawdowns".
The Fed announced a lot of stuff but they did not bring back the commercial paper facility. If/when that hits the tape it will be a good time to buy ES for a bounce trade IMO. Lots of co's will tap it and survive during the lockdown period. That's a catalyst I'm looking for to play ES as a trade
If the Fed announces this, buy SPY. 2-3 points of risk, reward maybe 15-20 points. The tricky thing is if they announce it overnight. There might still be a trade there but worse risk reward ratio