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Trading the Bounce

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Wait, big as in big gain or big as in big crash?

Got a cliff notes summary?
 
Cross-post:

Here we go, we've had a record spike in virus cases and futures are in the toilet with the tech heavy nasdaq once again having an overwhelmingly better time of things:



and with all the banks deep in the red:



wall street is starting to now actively call for the already planned 2nd stimulus package to be brought forward:



I reckon the jobs data out next friday will be the big decider. If that's bad (and everything I've read says it's going to be) then more stimulus is a virtual certainty. That'll be the straw (or log) that breaks the camel's back. I'm now thinking about some put options.

Despite all of this, all of the european indexes are actually up significantly at the moment (which could just be a follow-on from yesterday's U.S bounce), but europe doesn't have anything near the virus problem that the united states does. We'll see what it closes at however.
 
Another cross-post

The one screencap which really says everything at the moment:



I know I keep saying this but tech and stay-at-home tech have had very different results and it's the stay-at-home tech that's driving the gains in tech overall.
 
Credit spreads are also way up, and I know that's a metric ducati would be thinking about.
 
This thing has powered along without a blip to make a new all time high. I never thought of such a speedy V-shaped recovery... unbelievable !
 
Thing is, once you factor in the exchange rate difference, things look VERY different. The exchange rate has pulled HARD against it. If you'd picked 23 march to the day, you'd "only" be +27%, not the +60% that the nasdaq (QQQ) would suggest (NDQ is an asx listed nasdaq tracking etf that obviously lists in AUD and so tracks it with the exchange rate factored in). If you'd just bought asx200 tech (ATEC), you'd be almost +100%:




Over a 6 month period, the dow is now flat in USD and in AUD is obviously down almost 8% once the exchange rate is factored in:



Let's not kid ourselves, this is not exactly organic growth we're talking about, and what growth does exist has gone almost entirely into tech.


The two things to hold lately have been AUD & tech. Combine them both into an etf (ATEC), and you have something MILES ahead of everything else
 
Well it's just choppy AF since the stimulus ended - even the small cap tech has largely done very little. And, a lot of stuff is priced in now. Now, things are a mess.

The really funny part is that whilst a lot of stimulus was spent on stay-at-home stuff (furniture, videogames etc) we've seen very little inflation because so much other stuff has had such negative pressure. The two have basically balanced each other out.

More stimulus looks increasingly unlikely now, especially with election coming up and the democrats undoubtedly trying to torpedo the economy to get trump ousted, so I've basically just gone back to where stimulus ended, seen what's pulled vs what hasn't (news flash, a lot of the stay-at-home stuff like docusign have just been a total clusterfuck) and rotated. On the NYSE, nvidia & pez are my two golden children at the moment.

It's the exchange rate that I'm watching like a hawk. I have a fair bit of (my remaining) cash here ready to deploy but we just seem to be bouncing between 71 & 73 US cents. If it busts 70 or 74, it's showtime.
 
over9k said:
I have a fair bit of (my remaining) cash here ready to deploy but we just seem to be bouncing between 71 & 73 US cents. If it busts 70 or 74, it's showtime.
Click to expand...
I think AUD was cracking higher lately until the interest rates expected to be held for the next few years was announced.
 
aus_trader said:
I think AUD was cracking higher lately until the interest rates expected to be held for the next few years was announced.
Click to expand...
Here's my post from another thread:



It broke trend as soon as the payments stopped, but it didn't bust low, it just went choppy. Is this just more and then less and then more and then less anticipation of some kind of stimulus *soon*?

If so, we can expect a break the moment the market really thinks more stimulus isn't coming.
 
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