Fed action further distanced SP500 from 3000
This is a follow up to GAMS' first post.
The Fed's 25bps cut, coupled with hawkish verbiage, added more weight to the already dwindling American corporate earnings and further confirmed GAMS's bearish view towards the rest of 2019.
Strong USD will create strong headwind to heavy-weight components in SP500 like MSFT, AAPL, etc who rely heavily on foreign revenues. As corporate earnings start to take a nose dive as it is about to now, the Fed wouldn't have any ammunition to turn the tide any more.
GAMS is extremely bearish with USD and SPX, in the medium to long term. We see GLD, JPY and long UST duration as safe havens in this environment.
To express above views, GAMS had entered below strategies.
1. Bull put spread on GLD, 132/152, Dec2019 exp. This creates upfront credit
2. Credit from leg 1 to buy TLT
3. Monthly TLT Covered Call
4. ITM put on SPY, Dec2019 exp.
The Fed's 25bps cut, coupled with hawkish verbiage, added more weight to the already dwindling American corporate earnings and further confirmed GAMS's bearish view towards the rest of 2019.
Strong USD will create strong headwind to heavy-weight components in SP500 like MSFT, AAPL, etc who rely heavily on foreign revenues. As corporate earnings start to take a nose dive as it is about to now, the Fed wouldn't have any ammunition to turn the tide any more.
GAMS is extremely bearish with USD and SPX, in the medium to long term. We see GLD, JPY and long UST duration as safe havens in this environment.
To express above views, GAMS had entered below strategies.
1. Bull put spread on GLD, 132/152, Dec2019 exp. This creates upfront credit
2. Credit from leg 1 to buy TLT
3. Monthly TLT Covered Call
4. ITM put on SPY, Dec2019 exp.
Trade attivo:
President Trump announced a further 10% tariff on the remaining 300b of Chinese goods, effective 1st of Sept. This is a bad move that will hurt both China and the US. But this bodes well with GMAS’ recommended strategy of longing GLD and shorting SPY. Trade talk won’t conclude any time soon. Stay risk averse, look for safe havens!