Things Feel Different! (Slightly)
Is there a change in the wind? Have the weak hands been cleaned out of positions in FX, leveraged trades, and short volatility trades?
Or is this just a normal pause where everyone catches their breath, reports to their board of directors, pleads with their bankers, negotiates with their investors or their prime brokers.
In addition for the first time in two weeks, I managed to sleep without waking up 2 to 3 times to check the markets. Maybe it’s the end of a hectic week and everyone is exhausted. Perhaps, the equity market correction has achieved the first objective: a brutal, fast repricing of an overpriced market that corrected due to the developing pandemic.
As I read up on the current state of affairs it seems we have gone from denial by many governments and the public, to understanding the reality of the situation! Governments and central banks are throwing everything at the markets. In addition I think every day that goes, the authorities are gaining insight into the pandemic, and the global community is working to find a vaccine and possible treatments.
The pain is not over, but I think the market will be more two way from here than it has been the last two weeks.
What has us thinking:
*Oil posts biggest one day percentage gain EVER! WSJ reports that USA may get involved in the Russia-Saudi tussle.
* Trump wants to send $1,000 to adults and $500 to kids in coronavirus stimulus bill!
* Large Norwegian investor out in media admitting to suffering large losses betting on the NOK to strengthen.
*Norges Bank cut rates to .25% today, joining the 0 club for all practical purposes.
*Fed balance sheet hits all time record of $4.7 trillion USD.
*U.S. equities had a move of under 1%, first time in a few weeks.
*The Fed set up USD swap lines with 9 new central banks, trying to help the global USD squeeze.
*The VIX index fell 7% to 71.
*U.S. government yields traded higher.
Today is Friday and the close today will have a lot to say for the market going forward.
|Ticker||Date Opened||Entry Price||Stop||Target Price||Current Price||% Change|
|Long EURCHF Put Option, Strike 1.0650, Expiry 15.4.2020||2020/01/15||1.0757 (Ask 0.00620)||1.05680 (Bid 0.01341)||+1.76%|
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