My numbers suggested pocketing gains when the Dow Futures dropped to about 22225.17 and look to short once again at 21963.01.
Trading the Indices on Fundamentals
- Thread starter FXtrader8911
- Start date
So I guess when you said "remain" bullish if goes above 21,715 that's not what you meant. If you entered the above short trade you'd be 700+ points in the bank now
It's what I meant at the time, but the numbers are dynamic. As a price rises, the level above which it must maintain itself to hold on to its bullish sentiment rises with it.
In simple terms, if I jumped off after climbing half way up a ladder that was 20 meters tall, I would be falling as soon as I dropped bellow 10 meters. However, if I kept climbing all the way to the top before jumping off, my descent would no longer begin down at 10 meters, but rather, up at 20 meters, my most recent location.
I would say that since the panic sell of the 23rd, some players are looking at the PE and convince themselves to buy on dips as the PE looks attractive. This strategy could be a bear trap, the reality is that all current E of the PE are just guesses, reporting on the 1st quarter can well show that the guesses are overestimated, if not, the 2nd quarter will almost certainly show that. There are a few recession-proof sectors that might be worth investing in at this point, but as far as the main indices go, I do think that the bottom is yet to be seen. Unless there is some medical development such as a vaccine, a cure or even a test to show which of us have the natural resistance to the virus, the economy is likely to get worst and this will be fully reflected in the 2nd quarter reporting. Until then you are gambling not investing.
It is to be noted that all prediction models that were used in trying to predict trajectories and immunity built-up were modelled around the reported figures and recovery charts of China, however, it's now been shown that the figures and recovery claim China was reporting were all window dresses, i.e. all false. Italy and Spain have gotten themselves in trouble using the models. At this point, nobody knows how bad or how long the economic shutdown will last.
It is to be noted that all prediction models that were used in trying to predict trajectories and immunity built-up were modelled around the reported figures and recovery charts of China, however, it's now been shown that the figures and recovery claim China was reporting were all window dresses, i.e. all false. Italy and Spain have gotten themselves in trouble using the models. At this point, nobody knows how bad or how long the economic shutdown will last.
My message to the thousands of crew members "stranded" on cruise ships (I believe 8 ships) off the Australian coast. I say to you... stop sponging on the Australian government expecting it to let you land and fly you home! You are on a vessel perfectly capable of transversing oceans, so, lift anchor, point the ship towards home and go home! Your ship is not registered in AU, it's not owned by AU companies, you don't pay AU taxes yet you made much profit working in AU waters... It's time you go home onboard your Ship, you are not a problem that AU needs to address!
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Putting the 700k jobless number in perspective
I am currently slightly long in US markets and neutral in EU & Asia, the strategy now (that will apply until a bottom is reached, probably as 2nd quarter reporting starts) is to lift my short hedges to a higher price. I will short any rally and unwind an equivalent existing short during sell-offs. Hopefully, by the time the high volatility ends, my hedges will be at a price that I can take a small loss on their closure and let the longs ride. A lot of work ahead for me but in theory, I should be able to re-position the hedges to a better level without increasing risk, when the impact of the virus diminishes due a cure or vaccine and markets start to rise I should be able to increase risk with the unwinding of hedges to let the longs ride.
Traders in the US are not affected by a rising USD, but traders outside the US need to manage the FX as well as index positions. The spike in the USD on 19th last wiped $203k off my account even though I was neutral, half of that has been recovered, however, if the USD spikes again, it will be a spanner in the works for my strategy to unwind hedges.
Traders in the US are not affected by a rising USD, but traders outside the US need to manage the FX as well as index positions. The spike in the USD on 19th last wiped $203k off my account even though I was neutral, half of that has been recovered, however, if the USD spikes again, it will be a spanner in the works for my strategy to unwind hedges.
The latest on the virus: It's reported that a US Farma has developed an antibody test, this might well be a compromised brake-trough to a vaccine. Anyone that has the antibody either naturally or by recovering from an infection is no longer at risk and also is not a carrier, meaning that these persons are able to return to work and resume a normal life. I see this as a major brake-trough as the economy can partially be re-opened and kept partly open with increasing momentum as more people tested are certified as immune. I also heard that Germany is already testing the procedure, I do hope the reports are true and if so, the process quickly approved and made available to all.
Problem is they are still not sure if it makes you immune to the virus. This thing is still a can of worms.
The report said that the developer of the test (I think it was J&J) originally put resources in this direction because tests on people that had recovered showed that they are indeed 99% immune and no longer carriers.
I am in the camp that the remedy should be less harmful than the disease, i.e. shutting-down the world economy is so drastic and harmful that if there is something that can keep the cogs rolling, even partially, then it should be implemented even if it is not 100% proven. The US FDA is not in that camp and to my thinking is overcautious. The Germans are running the trial and issuing certificates of immunity to people that past the test. I guess the Europeans are more receptive to some risk (they showed this during the HIV epidemic also). In my book, when the remedy itself is harmful, the EU way is the way to go.
Looking out my window at the harbour (Sydney harbour), things look very normal and the outdoors are very inviting... a nice sunny autumn day, peaceful blue water with many sailboats on it, I envy the people on those boats. I then turn to my computer screen and see graphs that cry-out doom and gloom, quite a contrast! There must a medium reached, nature if giving a sense of peaceful normality, are we then creating a catastrophe that perhaps is unnecessary?
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