QuantumLogicTrading
Long

UK EU REFERENDUM/ BREXIT: BUY EQUITY RISK AND GOLD DISCOUNTED

FX:NAS100   NASDAQ 100 index of US listed shares
The UK EU Referendum has presented significant discounted buying opportunities, with many blue chip names anywhere from 5-15% down in the last 2wks.

The uncertainty regarding the UK position in the European Union has pushed investors to see Gold             , Treasuries and JPY, whilst fleeing risk equities .

- IMO the next week or two will form a trend of oscillating risk-on/ risk-off asset price swings as the markets reflect the volatile investor sentiment - this opens up significant arbitrage opportunities within the equity markets and Gold             - by owning both on pullbacks you then TP as the investor sentiment switches into the favour of each - as it is bound to do.

- Essentially this strategy is a volatility play (ATM volatility for Gold             almost double since last month), you naturally own both "sides" of the market (risk-on and risk off), thus taking profit when the sentiment swings in the way of each of the assets.

1. My personal Favourite GOOG             and FB             are currently trading at an average of apprx 10% down - I advise buying GOOG             and FB             at these levels, in a pyramid (increase lots if further downside occurs).

- Long GOOG             and FB             can be used as an event scalp as I expect their values to climb 2-5% back within the week, or you can hold longer for the full 10%. GOOG             and FB             discounted 5-10% are high alpha and low beta trades since IMO fundamentally they operate monopoly's over the Online Marketing Market and have significant Top and bottom line figures.

- Alternatively you could pick up Nasdaq 100 Index             at a 5% discount, and own the market which in the long run will pay off - although I do not advise this trade so much (3/10) as I believe equities are due a correction - especially coming into earnings .

2. Long Gold             on any 2-5% pullback, which i think we will see by Tuesday is a good trade: 1) as Gold             will rally on Wednesday/ Thursday as global Macro risk is hedged for the vote day. 2) In the longer run, Risk assets (spx)             are due a correction, thus Gold             is due to outperform and have a bull run. 3) By holding Gold             on pullbacks you can benefit from the tail risk of the UK actually REALISING BREXIT where IMO Gold             would rally 10% as the Global Macro environment flees to safety.

3. By playing both the long Gold             and Equity on pull backs you benefit from: 1) the natural hedge of owning long risk and Risk-off assets, thus your portfolio is diversified to perform in the short run for any outcome but also in the long run. 2) you own both assets at a discount so probability is on your portfolios side.
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