Market Outlook, Trading GE, KR, USD/CHF – 03032018

Written by schattenmann

This week i reduced my GE position about 40 %. My hard stop is @ 9,5 but i reduced a loosing position as well as a winning position. KR i took profits out for the second time now. I am holidng 50 % of my initial position and will go on with that because KR seems to be nearly fairly valued (it was undervalued @ levels where i bought). There is no need to change to bearsih for now but i believe that the structure of the market is changing. I had a quick FX Trade with +39 pips profit. Will look to enter for a longer period and i am watching the JPY.

I survived Lehman (at that time i was trading futures) and trading was really brutal. On the Monday of Lehman brnakruptcy it was the first and only time i saw the S&P 500 Future trading halted. But today many things have changed. Algos drive the market that fast (DOW 1000 Points rollercoaster in 8 Mins) that humans can not react appropriate, panic is often the answer. We have an absurd market (from valuation perspective in the Stocks) plus the game of the central banks (out of complete munition). The bond markets are completety ununderstandable (the High Yield rubbish ), NIRP all around the world, speeding up of Currency moves (like JPY now) and an insane debt levels of Governments. This is complete crazy and will end up brutal, there is no other choice. The sadest of all things: We have a lot of devil wars and they seem to speed up and grow too…

Some Analyst expect the DOW drop to 5000 and Gold up to 2500. I dont know that and i am thinking only of 2018 and do expect a much rougher year than 2017. I have my long portfolio with some hedges in the SPY and will stick to my trading plan unfaillingly. Markets are giving us hints and clues (the last hint is that we have a raise in volatility) and we know for sure that the range we are trading is 250-290 area in the SPY. Markets are in a 10 Y bull cycle and will take time to turn (if ever). If we have an external shock (like more war) than expect the Algos to destroy value within hours, that will be new in history, time will tell the complete story.

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