Market On Open, Monday 19 May
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Does Anything Matter?
by Alex King, CEO, Cestrian Capital Research, Inc
The Moody’s rating cut on Friday after the close could mean (i) doom for equities because doom for bonds or (ii) nothingwhatsoever because nothing matters or (iii) somewhere in between. I myself suspect a modest pullback before a resumption of the bull. Less clear to me is whether the pullback is already complete in late Friday / early Monday trading, or whether the New York equity close today will have witnessed bulls stampede towards the door.
Peak to trough so far is less than a 2% drop in NQ futures, not much really.
And the move up you see there from the lows at around 0330/0400 Eastern - that’s a worthwhile climb of the stairs. So it’s possible the lows are in. Personally I took profits in premarket in SOXS and SQQQ hedges and used the gains to add to index long positions. We’ll see if that’s wise - if not I can always re-hedge. I have some index puts that should open in the money, helping to offset any further red on the long side.
But rather than guess, let’s get to work and look at how markets stand.
But first, this:
Bitcoin
Quant services continue to do well here at Cestrian. Yimin Xu’s Bitcoin Signal Service model portfolio is +23% since inception in April. And to quote the model-creator himself, “the model has held firm - correctly - when technical analysis said to sell”.
Do not miss the opportunity to sign up at the low launch price. This is a special subset of his excellent YX Insights macro work. Read more here.
Alex King