Macro Monday 8th March 2021
As volatility increases, your time frame for decision making should shrink not lengthen. Many people on a drawdown think "I am OK with this I am in this for the longterm". No! Your view should become shorter and you should take small loses before they become big losses.
This has been the same across most asset classes, most will focus on the equity market $SPX500 etc because that is what most people own. Even more so $NSDQ100 and the big names $AAPL (Apple)$AMZN (Amazon)$TSLA (Tesla Motors, Inc.) almost everyone owns these because they have gone up the most.
What we have seen in the last week is a rotation. Mainly because other things are going up more. Small caps are beating large caps. XLE is beating XLK . There are more places to put capital to work.
This is the same in FX space "safety" is being sold. Is it not interesting that USD is strong against Yen USDJPY and Swiss francs USDCHF people are leaving safety. You can see that also in GOLD weakness. USD weakness against Candian Dollars USDCAD Aussie Dollars AUDUSD Sterling GBPUSD based on reflation. The better trades have been outside of direct USD crosses and played deflation FX against reflation FX directly CADCHF CADJPY done well this week with a strong Oil price. GBPJPY GBPCHF and AUDJPY AUDCHF also had good weeks and continue to be strong over 1M and 3M timeframe.
I do want to highlight China50 and AUS200 . China was the first country to enter expansion/opening up so it makes sense that the positives will slow before everyone else as well, we saw that this week with Chinese PMI and Inflation levels falling. As Australia is a big raw materials exporter to China this could impact them and is something to watch closely.
I want to thank my new copiers, February was a great month but an outlier. It will be very difficult to replicate.
I hope everyone has a great week.... Show More