Expectations for 2020

30 dic 2019

Caution is required from the thin market perspective also we expect an increased likelihood of volatility explosions on the market.

As we turn to 2020, the year promises to be extremely difficult and eventful. Whether this year will be a year of crisis, we will see, actually we would bet on a crisis. In this regard, we expect massive sales on world stock markets, which will be accompanied by an increase in demand for safe-haven assets. So purchases of gold and the Japanese yen in 2020 will continue to remain relevant.

"Deal of the Year" for us will be sales in the US stock market. But on this occasion, we have another review, where we describe in as much detail as possible why 2020 should be the year of the collapse of the US stock market (well, or at least, the time for a full correction on it).

As for the foreign exchange market, a lot of trades will depend on the actual development of events: what the Fed will want?, whether a full-fledged crisis or recession will occur in the world?, how the elections in the USA will end?, etc. Therefore, for now, we will not make any guesses, but we will note one deal that has, in our opinion, the maximum chances to get profit. It's about buying the British pound. 2020 should be the year when Brexit “ends”. And according to the “soft” scenario. Accordingly, the growth potential of the pound is measured in hundreds of points, and according to our estimates, pared with the dollar, it may well exceed 1.40. That is, from current prices it is about 1000 pips.

Another promising trade in the foreign exchange market, the sale of the Russian ruble. Its current strengthening of the ruble should not be intimidating or perplexing. On the contrary, this is just a great opportunity for sales. Yes, probably you will need to hold the position for more than one week or even a month. But we have practically no doubts about its positive outcome.

And a few words about oil. Its growth potential due to the new OPEC + deal is not fully exhausted. But in general, we tend to begin to build a medium-term short position, starting the first round of sales already at current prices. Why? the expectation of serious problems in the global economy. Recession or toward recession will be a serious blow to demand in the oil market, which will invariably provoke a drop in quotations. Also, on the supply side, 2020 could be a watershed. Russia is talking about a possible exit from OPEC + due to the need to fight for market share. If this happens, then sales on the oil market can not be avoided. Therefore, those who are ready to be in a position for several months can join us and start selling oil.