It’s been 3 weeks from my last blog. A lot of stuff happened in both economic arena and political but nothing game changing yet. The major issue that has really changed was gold prices. Gold went up 6% during the past 3 weeks and Yen has strengthened after weakening consequently from 9 November 2016.
I have written before that I opened my real account ( this is a simulated account, however, with all seriousness for each trade I do. ) therefore, I could not fully concentrate on the macro environment. Despite that, I have done quite some trades for the past week. I am spending my time looking for stocks for my personal account with no luck so far.
Rally to gold was basically driven by running to safe heaven as always. The market is moving up or down but not serious change has occurred yet.
Trump gave first news conference speech two days ago, which did not leave the market happy. He did not touch any real fiscal issues, how he is going to do tax cuts, fiscal spending. I see that market optimism around Trump is fading and it won’t take long before the market corrects itself. I will move in small steps to start shorting healthcare sector for now.
The same applied to OPEC. 1.8 mln barrel cuts been “promised” together with OPEC and non-OPEC dealers. Saudi Arabia and few others have started to lower production but I am not that sure how much will that stick. Cheating among the members is common through history. I am currently long with 5% of my portfolio exposed. However, price moves have not made me happy. Unless we see a major real cut, oil prices will not spike. I am thinking to short oil as well for the near future.
I have shorted some healthcare stocks but based only on Trump speech. I was late to the trade but despite that has made few bucks but nothing extraordinary. Trump’s clear negative message for pharma industry will be alarming.
Dollar rise since the election is coming to a halt it seems as Trump is not delivering positive news that will move the dollar, even more, higher. For the past 2 days dollar is getting weaker. I am becoming uncertain on the dollar or any other currency move. All the previous events are becoming obsolete. What will matter soon, will be Trump actions in White House. However, FED likely rate rise and QE in EU and Japan should not be ignored.Maybe market participants are taking a break from being bullish on the dollar and waiting for major news that will shift everything. I am one of them.
For now, I am bullish on gold. Despite being jumping on the train quite late, I think for a long term gold has the potential to rally if recognized by participants. Any negative news can push investors to safe heaven and gold looks like leading the market.
Trump is still in talking page. It will take some time he really starts doing something about tax issues, fiscal spending, trade deals. Therefore, I will be bullish on gold, short sectors of healthcare, go long on Oil E&P as Trump is thinking to give rights to companies to explore federal lands. Oil and currencies trades will be subject to near events analysis.