In today’s briefing:
- Buy to the Sound of Cannons
- Trading the Panic
Buy to the Sound of Cannons
- If a hot war were to break out, wars are intermediate-term bullish owing to an accommodative fiscal and probable monetary responses. Remember Rothchild’s words: “Buy to the sound of cannons…”
- If war fears fade, investors face the more conventional challenges of central banks tightening monetary policy during a mid-cycle expansion – a choppy market after an initial relief rally.
- In all cases, investors and traders should fade the war fears and take advantage of any price weakness to buy risky assets.
Trading the Panic
- The U.S. equity market is undergoing the classic signs of a panic bottom and it is poised for a relief rally.
- Not only is the market oversold, but also extreme fear is showing up in sentiment readings.
- While it’s difficult to pinpoint the exact point of a bottom, the ability of the S&P 500 to hold above support on the 30-minute chart is constructive.
Before it’s here, it’s on Smartkarma
