Trading the Indices on Fundamentals

Hi Fx

Followed your thread over from Whirlpool. Started trading futures years ago with interest rates and SPI. My day job/family kids took me away to stocks which I never really had the same success as focussing on the index. Sorry 20% returns don't do anything for me. I am looking to get back to focussing on futures/indicies hence interest in the thread. Cannot believe the strength in the ASX and have some shorts on especially when earnings growth is minimal and reporting coming on soon some of these stocks priced to perfection
 
FXtrader8911 said:
EU did not participate in the sell-off but France just announced 2 confirmed cases of the snake flue so expect a gap down on Monday.
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As expected, EU gapped down substantially on Monday open, DAXmid60 down 1.6% followed by the CAC at -1.4%. US futures gapped down on Asian open and remain down. Markets are now where they were late Dec 2019 having lost all of Jan surge.

Many are comparing current events to SARS times, however, during SARS, the purchasing power of the Chinese consumer was nowhere near where it is now... I guess one could now say that, as far as the retail economy is concerned, when China sneezes, the rest of the world catches a cold. In some countries like Italy, Japan, Thailand, Etc. China represented as much as 40% of the total tourist spending.
 
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Aussie SPI still holding up compared to S&P back to Jan 15 levels. If risk is off and China is a concern you would think this should be lower
 
10 & 30yrs gapped down. Showing weak signs a few trading sessions back. This was always going to be the lead. Talk is less than 25percent chance of a Fed cut. For me interesting to see how the SPI trades in the ASIAN session. Australia the best performing western market this month on a lot of hot air!
 
The average of all markets is now below the close of 2019 i.e. all of Jan gains have evaporated in 2 trading days... Asia is not factored into the calculation as all, except JP, are closed and will remain closed most of this week. It is anticipated that both China and the HSI will re-open at least 7% down.

In the scheme of things, the dip is really no more than a dip, at least another 5% is needed to call it a noticeable sell-off. I don't think we will get the -5% this time around but we might see it towards the end of the quarter. Followers of this thread know that I've been net short in most markets for some time, the shorts are now showing +$40k gains, I've put some trailing stops on them to lock in the gains, however, my sights are on a 28,093 DOW to go neutral then go from net short to net long below that. That is the long term strategy, short term I trade the trend like most traders.
 
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The top 5 tech companies are reporting this week, to put these 5 into perspective, their combined market cap represents 7% of the S&P and 50% of the NDAQ. Bad reports from all 5 have the potential to drop the S&P by 7% and the NDAQ by 11%. My view is that good reports will have little impact on these indices as good numbers are already priced-in. Adding the uncertainty on the retail sector of the snake virus, there is more down risk than up risk i.e. at best we return to near the former highs, at worst we see a respective further fall of 7% and 11% from here, the middle ground achieved on mixed reporting is that we remain at current levels until something else warrants a move in either direction.
 
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