It was a big mistake and maybe something else will happen soon to negate it, such as ECB action or some coordinated event. But the Fed cut of 50bps today came as a surprise and traders sold the news and then the news manifested itself horribly and BOGGED out stocks.
I had positioned long into stocks yesterday, a sundry of quality names and I was happy with them. But after seeing the response to the Fed cut, I sold them all. Having established a bias, I then bought SOXS and FAZ — shorting semis and banks. I also took two intra day trades, AHPI +27%, and APT +16%. But it wasn’t all roses, lots of set backs — such as JNUG -12%. Here is the run down.
(BPMX -7%)
FNGU +7.9%
(CPHI -16.9%)
NKE +2.25%
UBER +2.4%
(STMP -3.3%)
(SIVB -3.3%)
(RCL -0.5%)
(IIPR -9.5%)
CMG +0.8%
CHDN +2%
(BIOC -6.8%)
(BIOC -25%)
AXP – wash
AAL +1.6%
(WYNN -0.9%)
AHPI +27%
APT +16.7%
(JNUG -12%)
(CODX -7.2%)
Net net, I came out a winner. I ride into tomorrow very heavy cash, short, and long a handful of virus stocks, which haven’t been behaving right — but I keep going back to the well — because addiction. My sense is this has to pass. But will it pass quick enough to stem an already tenuous tide? I mean, Japan is leveling into its 5th recession since 2008 and Italian GDP is bound to be dreadful — because the virus is affecting an area of Italy responsible for 50% of GDP.
The story of the day isn’t market action — but bond action. The 10yr yield plunged to 0.93% before recovering to 1.00%. While this might be good for Trump’s buddies in real estate, it speaks volumes about the deflationary vortex we’re entering. Moreover, the deflation trade will ravage through WTI, which in turn could place $2 trillion of credit at risk. All hypothetical now. Every credit scare has been proven to be wrong, so I won’t obsess on it.
First things first, check your emotions at the door and trade the tape you see, but do it small — because the whips are serious and the volatility a killer.
If you enjoy the content at iBankCoin, please follow us on Twitter
Pray the song Ba ba ba “Bernie and Da Virus” don’t become a hit!
The inflection has hit.
The leg has ended.
C – R – A – C – K – – – 3 – – – Fuckers
You’re too good Fly.
Deflationary Vortex
vs
Plunging dollar, supply chain burps, and potential for transport etc disruptions
The president is balancing things perfectly to keep price stable.
We are hanging out at VIX 30 right now. We haven’t seen VIX 40 since 2011. You think hedge funds are more leveraged long now or back in 2011?
2011 was not that long after the 2008/2009 deleveraging. I’m pretty sure we are at least a little more leveraged now. So tentatively hoping for VIX 40 and some forced selling, then bonds and CHF change direction before I get committed to a rally.
Gonna be a wild night. Markets reacted right after they announced Biden took VA.
Nikkei/Boj session starts at 7pm
Fed will backstop any credit disruptions.
Not trying to be a debbie downer, but it seems unlikely that we can eradicate this virus. Unless we can develop a vaccine or treatment, this is a big hit on life expectancy. There’s a lot of work to be done in the coming years, and it isn’t in iphones. If this shit blows up in the US, because we refused to test, kiss the repubs goodbye for years to come.
And those comparisons to the flu CFR, how many flu cases are undiagnosed? The same argument can be made to bring down the flu CFR.