Something Doesn't Feel Right

We have the feeling that perhaps the market (equities) maybe jumped the gun on the all clear/it’s just a China problem.

Headlines:

Coronavirus now found in 27 countries.

40,573 confirmed cases, 910 confirmed deaths from Coronavirus.

Angela Merkel’s heir apparent quits as leader for CDU.

OPEC emergency meeting seems not to be in the cards.

New Hampshire Democratic primary tomorrow.

Chinese banks preparing for tough times ahead.

Vanguard total world stock ETF: Tracks the FTSE Global Index, invests in over 8,100 stocks globally.

Key support at 80 level, resistance at 82.35 level.

We look for a test of the lower end of the consolidation pattern in the days ahead.

Oil is taking the Coronavirus seriously, driving Crude down to key support. The delicate supply/demand balance that was key for black gold before the start of the year, combined with the developments in China will certainly test the resilience of OPEC+, with some analysts predicting, the cooperation is heading for a break down.

Since the Worrying development of the coronavirus become a more global concern, the VIX index has rallied almost 30%, which would be expected given the potential negative consequences of a possible pandemic.

AUDJPY and High Yield ETF are also both lower as we would expect would occur while we wait to gain a better understanding of developments. While Copper, which is seen as a leading indicator of global growth (Due to China being a large user of the industrial metal) has seen a fall of 10%.

So what is going on here?  Are equities correct to feel safe given the central banks of the world are on guard and fully invested in keeping the global economy rolling or are the other markets more realistic in their pricing and not buying into the equities all clear signal?

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TickerDate OpenedEntry PriceStopTarget PriceCurrent Price% Change
Long EURCHF Put Option, Strike 1.0650, Expiry 15.4.20202020/01/151.0757 (Ask 0.00620)1.06420 (Bid 0.00695)+1.07%
Long EXXY:xetr (ETF)2020/02/0417.3716.9518.7517.56+1.09%
Long NY COFFEE March 2020 (CFD)2020/02/10100.0397.50110.00101.60+1.57%
Long Norwegian Air Shuttle, NAS:xosl (Stock/CFD)2020/02/1241.5035.0060.0041.50+0.00%

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2018: 45 Trades, Hit Ratio 53,66%, Profit +35,87 %
2019:   31 Trades, Hit Ratio 45,16%, Profit +26,97%

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