Good Things Come to Those That Wait!

The UK will leave the EU at 11:00 UK time tonight. After all of the back and forth, political chaos in the UK, the uncertainty and the political gamesmanship, here we are.  The future is uncertain, but the voters have gotten what they voted for in the 2016 referendum. 

According to Reuters the EU will lose 15% of its economy, its biggest military spender and the world’s international financial capital of London.  https://uk.reuters.com/article/uk-britain-eu-union/brexit-day-britain-quits-eu-steps-into-transition-twilight-zone-idUKKBN1ZU003

It will be interesting to watch developments as the UK negotiates it’s future with Europe and trade deals with other nations. It will be interesting to see if this is a case of “be careful what you wish for”.

Yesterday WHO declared the new Coronavirus outbreak a PUBLIC HEALTH EMERGENCY of INTERNATIONAL CONCERN, while the market took it as positive that the statement as positive, having feared a more negative result.

WHO stated that:

it believes that it is still possible to interrupt virus spread…..

It did not recommend any travel or trade restriction based on current information available

 

The market apparently thinks things are more or less under control and it is primarily a problem for China.

We hope they are right, but fear that the market is taking the risk of further spread of the disease and the consequences for the market too lightly. We think there will be tougher days ahead for the market as this story develops and a repricing of risk, based on global growth assumptions, will need to be priced in. The key question is whether this is a 3 to 6 months dip and then a strong recovery, or something else.

We look for equities and risk off into the month end as the market waits to see how things develop next week.

The USD index has broken out and is now testing key support. 

The USD high yield ETF is holding well for now (iShares iBoxx USD High Yield Corporate Bond Fund ETF)

The VIX Index is retracing it’s rally and is on key support as we end the week and month.

Contact us if you are interested in receiving real time trading signals. In doubt? Check out our track record below!

TickerDate OpenedEntry PriceStopTarget PriceCurrent Price% Change
Long EURCHF Put Option, Strike 1.0650, Expiry 15.4.20202020/01/151.0757 (0.00620)1.06905 (0.00622)+0.32%

Visit our Position Tracker to look at all of our realized trades and proven track record! 
2018: 45 Trades, Hit Ratio 53,66%, Profit +35,87 %
2019:   31 Trades, Hit Ratio 45,16%, Profit +26,97%

– Mark W

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