When I get a trade idea my first question is, “How much of this idea is already in the market?” For instance, if I consider that the “virus news” could get worse next week I ask myself, “To what degree have the people who move markets already taken this idea into account?
Latest Trading Desk Notes
Leverage is being punished these days...as recently as last month it was being celebrated. During a decade of low interest rates and easy money folks levered up and reached for yield.
Volatility surged higher across markets this week...prices changed with astonishing speed...bid/offer spreads were ridiculous...credit spreads widened with a vengeance and depth-of-markets got scary thin. Global stock market cap tumbled >$16 Trillion in 3 weeks...more than China’s annual GDP.