This is the fault of the US consumer. Why buy a widget that lasts twice as long at twice the price as a cheep one, when you can buy two cheep ones in the same time frame and it will wind up being cheeper in the end? Remember, when you get the second one, you have something that is brand new, not half-way through it's life.
Trading the Indices on Fundamentals
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This is the fault of the US consumer. Why buy a widget that lasts twice as long at twice the price as a cheep one, when you can buy two cheep ones in the same time frame and it will wind up being cheeper in the end? Remember, when you get the second one, you have something that is brand new, not half-way through it's life.
Good point, I'm not a consumer shrink but, for myself, I go for the former and rather get something that works, but that's me. Maybe the Chinese have a bunch of shrinks analysing the American mind and have it all worked out, including the fact that preventing America from accessing their consumer is something that doesn't bother the Americans (but now, it bothers Trump and they'll need to deal with that)
The resilience of markets continues to surprise me. The US has the excuse that's there's nowhere else to go, but EU, UK & HKG are also holding up... particularly the HSI, HKG is on the verge of martial law and could well lose its autonomy, it's reported many multinationals and expatriates are leaving, despite all, the HSI is holding. Baffling! Germany is in recession with manufacturing (thus exports) in serious contraction but the DAX is holding. The UK had a political circus bigger than the US, it's even dragging the queen into its mess, but it's holding up also. Lastly, the US Small Caps, supposedly immune to the trade saga, is the worst performing index. Is there any logic to this determination not to have a correction anywhere? Do tell if you have a view.
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Contrary to my previous view, I now think that a trade deal with China is a possibility. The US political landscape has changed and China knows it. Biden, the former front runner and the one China consider a pushover (possibly due a deal and payment made to his son) has become damaged goods and unlikely to be the Democrat's pick. China realizes that now they either deal with Trump or, if he's deposed, with Warren and Trump is a better option for them....no point now to wait till after the elections, so a deal might be forthcoming, if so, markets will rally to a point but the slowing economy might put that point lower than everyboby anticipated. Any black swan before this pans-out could still cause a sizable correction.
I'm not changing my stratagy yet as I still expect a correction before a rally, I remain net short in the US.
I'm not changing my stratagy yet as I still expect a correction before a rally, I remain net short in the US.
If a trade deal is reached, the markets will start their slow steady climb upwards again. And once manufacturing and other job-type numbers get filtered through, it is smooth sailing after those couple of quarters of slogging through trade-related mud.
But if we get a dem in 2020? Look out below for a while.
Quite a wild session in the US, The Europeans are probably bewildered seeing their markets swing wildly for no reason relevant to them. As Trump continues to create an air of uncertainty (not to say confusion), US markets swing on every headline bringing the EU markets along for the ride. During the US session, twice the lows were touched, the opening price was exceeded 4 times to then surge at the closing. adding the swings shows over 1,200pt movements on the DOW, a traders paradise if you are game.
I caught both the lows with exits around the opening price but missed the end of session surge, still, a $4.5k day for me counting a good trade on the NIKK225 also
FTSE100 was the only market down and the HSI continues to hold higher than it should be.
Today's wild swings really don't change anything nor give an indication of a direction. Until see political and trade clarity it's still anyone's guess on the next move.
I am not changing my long term stratagy.
I caught both the lows with exits around the opening price but missed the end of session surge, still, a $4.5k day for me counting a good trade on the NIKK225 also
FTSE100 was the only market down and the HSI continues to hold higher than it should be.
Today's wild swings really don't change anything nor give an indication of a direction. Until see political and trade clarity it's still anyone's guess on the next move.
I am not changing my long term stratagy.
Well, I'm cooked! Just t/p on my last US long, I'm now very heavy short in the US (still net Long EU so I'm hedged). Took out longs in the DOW,NDAQ,RUSSELL, also a couple of NIK225, another $4k+ day but now in an uncomfortable position if there is no reversal
Tump was crystal clear on his intentions not to enter into a mini deal, today it was: "forget what I say, just wait till I do it then you'll know what I did". What he did was a mini deal he said he would not do, but we were here before... the last time there also was a verbal agreement on IP but the written agreement (on the Chinese side) omitted the 7 pages that addressed that, will this time be different? It might because this time there is no specific requirement that China change its Copyright or IP laws.. well done Mr Trump in accepting a deal that in effect makes it optional for China to adhere to the IP protection issue.
As far the markets go, I don't see why they should hold at these levels, the last time a deal was announced (the one with the missing 7 pages), the S&P was at 2,950ish, now its at 2,990 while the situation on trade hasn't changed at all.... if trade is the be-all, end-all that's driving markets then why should they be higher? I'll wait and see, but for now, I'm not changing my strategy to be net short in the US with long hedges in the EU markets.
The 3-day rally took-out all my remaining US longs and some in the NIK225, so profit-wise, I had a good week with over $15k in the bank, however, I'm now naked short in the US which could be problematic for me if markets go higher.
As far the markets go, I don't see why they should hold at these levels, the last time a deal was announced (the one with the missing 7 pages), the S&P was at 2,950ish, now its at 2,990 while the situation on trade hasn't changed at all.... if trade is the be-all, end-all that's driving markets then why should they be higher? I'll wait and see, but for now, I'm not changing my strategy to be net short in the US with long hedges in the EU markets.
The 3-day rally took-out all my remaining US longs and some in the NIK225, so profit-wise, I had a good week with over $15k in the bank, however, I'm now naked short in the US which could be problematic for me if markets go higher.
Why not just cut them ASAP, before the markets trend higher on what could be great earnings for Q3?
That's not my view, if it was I would have kept the longs riding. I do not think the trade deal is worth much for industry and also do not think Q3 will have good numbers nor good forward outlook (same for Q4). Powell damaged the economy both with his fast rate increases and Oct/Dec "autopilot" intention, it takes a while for the damage to show, now it will show.
I'll start to worry if new highs are reached, at that point I might marry off the hedges and cop some losses, between now and then, even if you are right and I'm wrong there is always the possibility of a temporary correction or a flash crash (we are due for both... Historically,going back to 1928, market have a 10% correction every 331days and seveal 4% corrections inbetween).
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