Trading the Indices on Fundamentals
- Thread starter FXtrader8911
- Start date
I took a punt on Trump Saying nothing the markets would like and positioned myself net short using SE STOPS just before he spoke. Trump did not disappoint me, I stand to make some $30k to $40k per short contract (I sold 65 contracts) if DOW reaches close to the Dec18 lows. Thank You Trump, I won big on your election and you are the gift that keeps on giving.
Of course, had it gone the other way, I'd be tearing my hear out now
Of course, had it gone the other way, I'd be tearing my hear out now
Trump did some damage with his Thu announcement, the white house, within hours, put-out clarifications and on Fri Trump himself made further announcements that calmed the panic and reversed markets sharply, however, all told, its a lot of words and not much action. I do think that Fri bounce is not the real deal and markets will reverse lower until real spending stimulus is announced, so far only credit has been addressed, if the consumer does not get addressed, the downturn could well reach 30% and take as long as it did in 2008 to recover.
The daily/hourly volatility of >1% caused by the bots reacting to each sentence a politician or doctor utters is an unpredictable killer. I have made several $100k on the original Thu shorts but trying to reverse my positions at the rallies which turn out to be dead cat bounces have taken much of that back. I've now put everything on neutral and will stay there until some sort of floor will develop. Markets won't stabilize until a coordinated fiscal response is launched or until the virus is put under control, in the meantime, trying to catch a rally or a sell-off is proving very difficult and costly, so neutral is good for now. In a day or two, I'll try the strategy of having one market long and one short to remain overall neutral but also take advantage of the volatility. But for now, I'll just watch to see if any tradable pattern is forming.
The daily/hourly volatility of >1% caused by the bots reacting to each sentence a politician or doctor utters is an unpredictable killer. I have made several $100k on the original Thu shorts but trying to reverse my positions at the rallies which turn out to be dead cat bounces have taken much of that back. I've now put everything on neutral and will stay there until some sort of floor will develop. Markets won't stabilize until a coordinated fiscal response is launched or until the virus is put under control, in the meantime, trying to catch a rally or a sell-off is proving very difficult and costly, so neutral is good for now. In a day or two, I'll try the strategy of having one market long and one short to remain overall neutral but also take advantage of the volatility. But for now, I'll just watch to see if any tradable pattern is forming.
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Overnight there were stimulus announcements including helicopter money but during Asian hours US Futers fell more than 5% triggering the circuit breakers. So far only the Fed took action then talked, all else is talking with no action, I think if this changes i.e. the announcements become "we have done" instead of "we intend to do" markets will react better... congress taking a break in the middle of all the panic did not send a signal that inspires confidence in the words.
Losses to 18/03/20
ASX200 -31.74%
NIK225 -31.98%
FTSE100 -35.87%
DAX30 -38.18%
MDAX50 -35.60%
CAC40 -37.40%
HSI43 -33.32%
MIB40 -40.28%
IBEX35 -44.62%
US DOW -31.75%
USsCAP2000 -40.22%
US SPX500 -29.09%
US NDAQ100 -27.36%
EU50/STOXX50 -37.48%
WTI Oil -65.23%
Dollar Index: +1.45%
Avg for All>> -33.58%
Some are saying that if the US goes into recession, a world recession is unavoidable and another -20% from here is likely. Some countries. particularly the ones relying on tourism, are facing 20% unemployment
I'm currently neutral in all markets and intend to sell the rallies in small quantities. If markets go another -10% from here I will start looking at turning net long in minute increments and in selected markets.
Losses to 18/03/20
ASX200 -31.74%
NIK225 -31.98%
FTSE100 -35.87%
DAX30 -38.18%
MDAX50 -35.60%
CAC40 -37.40%
HSI43 -33.32%
MIB40 -40.28%
IBEX35 -44.62%
US DOW -31.75%
USsCAP2000 -40.22%
US SPX500 -29.09%
US NDAQ100 -27.36%
EU50/STOXX50 -37.48%
WTI Oil -65.23%
Dollar Index: +1.45%
Avg for All>> -33.58%
Some are saying that if the US goes into recession, a world recession is unavoidable and another -20% from here is likely. Some countries. particularly the ones relying on tourism, are facing 20% unemployment
I'm currently neutral in all markets and intend to sell the rallies in small quantities. If markets go another -10% from here I will start looking at turning net long in minute increments and in selected markets.
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China is claiming that they had no new (domestic) virus cases and are now re-opening all their factories while keeping the borders closed. If China is to be believed, then this virus seems to reach a peak at 3 months then subside. The West started large scale infections and business closures in March, if China is used as a reference, the West should reach its peak during May and life should return to normal in Jun/July.
Based on the above, markets have a while to reach bottom but should stop falling and even start to recover in June/July. The world economies, however, have been hit hard and might not recover so quickly. Many good companies (such a Boeing & many airlines) could disappear, who pulls-through will depend a lot on who gets Government bail-outs and whether Governments are able to boost the consumer sentiment to keep spending. i.e. the only good news at the moment is that perhaps the worst will be seen by July.
If above observations turn factual, I will be looking at gradually removing the hedges and start to get net long around April, for now, I remain neutral and won't try to trade the volatility but will try to reposition the hedges at better prices if can.
Based on the above, markets have a while to reach bottom but should stop falling and even start to recover in June/July. The world economies, however, have been hit hard and might not recover so quickly. Many good companies (such a Boeing & many airlines) could disappear, who pulls-through will depend a lot on who gets Government bail-outs and whether Governments are able to boost the consumer sentiment to keep spending. i.e. the only good news at the moment is that perhaps the worst will be seen by July.
If above observations turn factual, I will be looking at gradually removing the hedges and start to get net long around April, for now, I remain neutral and won't try to trade the volatility but will try to reposition the hedges at better prices if can.
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There might be a possibility that a malaria or ebola drug could knock COVID-19 on its head so we may not need to wait out the immunity cycle. We shall have to watch and see. Trading is tricky atm and the spreads have opened which is annoying. My daily tells me we are moving sideways atm with intraday volatility high. When the rebound comes it might be sudden.
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Yeah, y'day I heard Trump take credit for "ordering" the trial of these but the Chinese announced a month ago that they would be trying these drugs as well as the HIV drugs but stayed silence since then, maybe the drugs don't work.
I got a major shock y'day.... wasn't paying attention much as I figured that since I fully hedged my positions to neutral "what can happen?" right, well, $208k vanished from my account! I go into Panic mode, called my broker thinking they might be trying to blow my account... it was the 15% flash fall on the AUD, falling to the near historical lows of US$0.48. Today saw quite a bounce on the A$ so almost a third of the $208k has reappeared on the account, now I'm hedged on the AU$ also even though I don't trade FX.
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China has informed the US that the treatment proposed by Trump was tested by them a month ago but abandoned as it resulted in death to the patient. It did kill the virus but also killed the patient. Trump needs to take proper advice from medical experts before playing doctor.
But having failed to do so, I still have yet to see what I might consider to be signs of a possible bottom.