What a trading week: the SPY lost 5,89 % and my long portfolio lost too. Being hedged feels pretty good now because i am not loosing that much. Nevertheless i bought SO und GIS for my portfolio allocation, for me both stocks are looking fairly valued.
I opened long positions in EUR and USD against the JPY. For now they are in red but will hold and maybe open more positions against JPY. The SPY is definetly looking damaged. We have to see how market will react next week but i do expect more pressure to the downside. The biggest next support level is @ 212 area which means there is room of a 18 % decline. I will hold my longs if fundamentals do not change in the underlying securities and will close some hedges by taking the profit. We do not know if the market will drop that heavily but there are a lot of concerns like trade war, currency war (Turkey is under heavy pressure) and it can spread to other emerging market countries. Libor / OIS is signalling credit risk within the banking sector and Deutsche Bank’s CDS @ very high levels. We do live in a time of epochal changes, at least it feels so. Time will tell the complete story.